Global growth outlook shaky on trade protectionism fears: Reuters poll

Wed Jan 18, 2017 6:44am EST
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By Rahul Karunakar

(Reuters) - The global economic outlook remains shaky, despite recent pockets of resilience, according to the overwhelming majority of economists polled by Reuters who said a rise in protectionist trade policies would hamper growth.

With elections due in a number of major euro zone countries, political change in the bloc was picked as a close second choice for potential disruptions to the global economic revival.

That uncertainty is heightened by the signs of a rise in nationalist sentiment worldwide, as exemplified by Britain's surprise vote last year to leave the European Union and Donald Trump's shock U.S. election victory.

Three months ago, economists overwhelmingly cited a pickup in international trade as essential for improvement in the world economy. But an expected rise in protectionist policies has dented confidence in those prospects.

This trend is reflected in most other Reuters polls over the past month on major economies, stock prices, bond yields and foreign exchange rates.

"Clearly, the geopolitical, political and economic risks facing the world are many and multifarious, and it is no easy matter to isolate those that seem most apparent to us," wrote Mike Carey, chief economist at CA-CIB in a note.

"While 2017 does not look as if it will be the 'year of living dangerously', 2018 could well be more fraught."

Reuters polls of over 500 economists across Asia, Europe and the Americas reveal downgrades, or at best no change to growth forecasts compared with previous months, as well as a weaker inflation outlook across most countries.   Continued...

An employee of a foreign exchange trading company works near monitors showing U.S. President-elect Donald Trump (top R), and the Japanese yen's exchange rate against the euro in Tokyo, Japan, January 18, 2017.    REUTERS/Toru Hanai