Anders Borg, Sweden’s former Finance Minister, gives his perspective on what to look out for in the economic year ahead, from reforms in China to the threat of Brexit.
2016 will be a challenging and difficult year for the global economy.
Global growth is picking up somewhat after a number of weak years. A global GDP growth rate of 3.5%, the latest IMF forecast, is lower than the 4.5% average that preceded the decade before the great recession, but it is better than the average over the past five years.
The US and UK recoveries are self-sustained, but weaker than during a normal post-crisis period. In the Eurozone, expansionary policy is still called for and further steps to support growth could be expected. In the US and Europe alike, investments levels are low, productivity growth is very weak and the export sector is only providing a small contribution to the recovery. At the same time growth is slowing in Asia and world trade is likely to grow at a slower rate than GDP. It is a recovery without a real upturn in the business cycle, threatened by a range of factors.
To learn more about World Economic Forum 2016 global economy forecasts: Act Now