Global: View from the Top
Goldman Sachs’ Chief Economist Jan Hatzius expects global growth will accelerate to the top end of the 3%-3.5% range that’s prevailed for the past five years, largely driven by a positive impulse from financial conditions in the US and parts of the emerging world.
US: Under New Management
With the US economy already at full employment, Goldman Sachs Research’s Jan Hatzius sees above-trend growth and potential fiscal stimulus causing a modest overheating in 2017 and 2018, putting upward pressure on inflation, interest rates and the dollar.
Europe: Fiscal Policy at the Helm
European economies will continue “muddling through” in 2017, with 1.4% growth driven almost entirely by fiscal stimulus. GS Research’s chief European economist Huw Pill says these modest gains won’t be sufficient to address the institutional and structural weaknesses that have kept Europe locked in a low-growth range.
China: A Balancing Act
Goldman Sachs Research’s Andrew Tilton expects continued fiscal and credit stimulus in support of a 6.5% GDP growth target, adding to the tension between China’s near-term growth goals and longer-term financial imbalances and risks.
Asia: Deceleration Meets New Domestic Growth Stories
China will remain the growth engine for emerging Asia in 2017 albeit growing at a slower rate, says Goldman Sachs Research’s Chief Asia-Pacific Economist Andrew Tilton, with potential for additional gains from productivity improvements in India, Indonesia and the Philippines.
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