Improved general climate for business and recovery of the worldwide economy

21st July 2017

Hugues Chevalier, Economist

Growth should accelerate this year, supported by the continued restart of international trade, which is a strong support for countries exporting manufactured goods. The growth should be between 3.5% and 3.8%, which is about 0.5 points above the level of 2006. In Europe and Japan the acceleration phase continues, supported by exports and renewed investments. In the US to the contrary, with the absence of any economic policy, indicators suggest stagnation, maybe even a decrease in activity. For the emerging countries, the acceleration of international trade is supported by the important activity, especially in Asia and central Europe. Furthermore, the week inflation allows central banks to reduce their leading rates (with the exception of China), which should also support activity. Petrol exporting countries on the contrary should see a slowdown following falling oil prices during the last few weeks. This is also the case for Russia. Finally, risks for the world wide economy have not totally disappeared: the credit bubble in China or the absence of an economic policy in the USA remain two factors to be monitored closely.