20th February 2017
Hugues Chevalier, Economist
The latest indicators suggest an acceleration of worldwide growth. In the OECD countries domestic demand strengthens, thanks to improved labour markets (US and Europe). However this scenario is threatened by increased geopolitical risks. In the USA indeed the planed tax cuts for companies and households will support growth in the short term. But in the medium term, the announcement of strengthened protectionism for imported goods from emerging markets (Mexico, China,…) will impact as much these countries as the US households. The risk is to see retaliatory measures put in place, which will negatively impact global trade, in a context where this has not yet come back from the 2008 crisis. For emerging countries, the rebound in raw material prices allows several countries (Russia, Brazil) to leave recession this year. Furthermore the support measures for growth in China helps the activity in the whole Asian region. In total, worldwide growth should accelerate this year to 3.4% and to 3.6% in 2018. We therefore make the assumption that activity will accelerate in Europe and Switzerland as well.