Economic en Strategy Viewpoint

The recovery in global activity remains intact while inflation appears to have peaked following the stabilisation in energy costs. We continue to forecast global growth at 3.0% this year after 2.6% in 2016, but have trimmed our inflation forecast to 2.3% from 2.4%. The combination of steady growth and low inflation means we remain in a goldilocks environment where activity is neither too hot nor too cold to cause a significant acceleration in inflation.

On the growth side, the US forecast is unchanged for 2017 while an upgrade to the Eurozone is accompanied by a stronger forecast for China and the wider emerging markets. In this respect, Europe is picking up the baton from a cooling US. On inflation we have reduced our forecasts across the board to reflect a lower oil price profile and subdued core readings. Looking into 2018, global growth is expected to remain stable at 3% with modest downgrades to the US, offset by upgrades to the Eurozone and emerging markets.