I have not been very positive about 2017, because of the uncertainties created by the long term quantitative easing programme, and the increasing populism and the Trump's presidency which may cause a wider wealth gap in the US, the high leverage ratios of many large global companies. However, there are some positive factors signalling that 2017 could be very positive.
The customer confidence reaches 20 month high in Europe, and the mortgage applications in the US increase despite the Fed increases the interest rates. The stock markets generally perform well, especially many US banks have relatively strong performances after Trump won the presidential election. These factors imply the market has been very confident about the global economy in 2017, especially the economies in Europe and the US. In addition, the UK Prime Minister agrees that the treaties about Brexit has to be approved by the UK parliament and the UK parliament is relatively "pro-EU" and the free trade may become one of the necessities in the Britain's agreement with the European Union. Therefore, the British companies may still enjoy free trading with the rest of Europe and they will not decide to move to the European continent.
With these factors, the world economy could continue to grow. However, these factors may be too narrow and too specific in a certain region without connecting with other parts of the world. Nowadays, the economies around the world have very tight connections with each other that although there is a process of deglobalisation, the deglobalisation could damage many people's interests, not only global cooperation, but individual workers could act against an extreme process of deglobalisation. Therefore, the globalised economy will still exists in a weaker form, but as long as it exists, only focusing on a certain region could leave out many other risks and uncertainties from other regions and sectors, which could influence the region as well in a damaging way.
No comments:
Post a Comment