Global economic growth momentum is strong despite weaker performances from certain countries, says Scotiabank’s Economics Global Outlook released July 6.

After the Federal Reserve tightened interest rates, the Bank of Canada, and potentially the Bank of England and the European Central Bank are likely to do the same. This is indicative of economic recovery, since it is self-reliant instead of depending on policy support.

Uncertainty still a concern

However, global economic uncertainty is still a concern. "It now appears clear that the United States will seek to modernize NAFTA instead of ripping it up," said Jean-François Perrault, senior vice president and chief economist at Scotiabank. "However, the U.S. is now also considering tariffs on imported steel by applying a national security designation to the sector. If enacted, these tariffs would have the potential to trigger significant retaliatory actions that could develop into a trade war."

GDP growth

In Canada, GDP growth is at 3.7 per cent q/q in Q1, and growth is expected to be at 2.7 per cent for the year. Growth is projected to be at 1.8 per cent for 2018. In the United States, growth is expected to be of 2.2 per cent for the years 2017 and 2018. NAFTA renegotiations are expected to disproportionally affect economic development in Mexico.

In the United Kingdom, Q1 growth was at 0.2 per cent q/q, and is not expected to go up for the rest of the year.

Latin America

Latin American countries are expected to have difficult economic times ahead due to political circumstances.

The Chinese economy’s growth is slowing down after a period of stimulus-induced strength. The forecast for output shows an expansion of 6.6 per cent for the year, and the real GDP should expand by 6.1 per cent y/y in 2018.