In spite of “substantial” geopolitical uncertainty, Scotiabank Economics Global Outlook predicts the global economy will perform its best since 2014. Recent economic data suggests growth prospects globally have mostly been getting stronger.
However, there are still significant risks to the global economy. According to Jean-François Perrault, senior vice president and chief economist at Scotiabank, “The incoming Trump Administration’s approach to trade policy, which has not yet been fully articulated, represents a significant risk to the global recovery. While it may appear we are entering a stronger, more sustained phase of the global recovery, it is too early to put on our sunglasses.”
Economic growth in Canada
Some of Scotiabank’s Global Outlook predictions include economic growth in Canada, the United States, Latin America, as well as in Asia. Growth in the Eurozone is re-accelerating and an unexpected increase in external demand could benefit their economy. The U.K.’s economy is currently expanding, but is expected to slow progressively throughout the year.
As for the Capital Markets, Scotiabank’s Global Outlook says the Federal Reserve is likely to raise rates three times in 2017 and twice more in 2018, while the Bank of Canada is not expected to raise rates until mid-2018. The strength of the US Dollar is expected to persist. It is unclear how the Trump administration will affect this, although it is expected its initiatives may support the USD even more.