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Global GDP growth forecast at 2.8 percent in 2017

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Staff Writer | Thursday November 17, 2016 9:56AM ET
Global economy
Global economy   The Conference Board:

The global GDP is forecast to grow at 2.8 percent in 2017, a very modest improvement from 2.5 percent in 2016.


Although a projected stabilization in energy and commodity prices may lift resource-rich economies up a little next year, the medium-term trend continues to be dominated by weaker growth in key inputs, notably investment and labor supply, the Conference Board said in its Global Economic Outlook 2017.

In the short term, geopolitical tensions, policy uncertainty, financial market volatility, and rapid changes in technology will pin the world economy to a slow-growth path, the report said.

As for the downside risks to the U.S. 2017 growth outlook, the report said a new administration will "face the challenge of managing a dual-speed economy which is largely driven on the plus side by consumer spending, fueled by stronger household balance sheets, and on the minus side by weak business investment."

Asked whether Donald Trump's victory in the U.S. presidential election will significantly change global economic outlook, the group's chief economist for North America, Gad Levanon, said it increases uncertainty but does not alter the bottom-line growth picture as of now.

He said fiscal policy measures such as tax cuts and infrastructure investments may provide some growth upside for the United States in the short term.

"But they're likely to have only a minor impact on an economy that is beginning to reach full capacity and facing the prospect of impending interest rate increases, which may reduce the appetite to invest," he added.

 

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