Global economic confidence improved in the first quarter of 2017 and is now at its highest level since Q2 2015.

While the improved prospects fed through into companies expecting to create new jobs and invest in capital projects, the biggest concerns were focused on increased costs which is consistent with increasing inflationary pressures.

Other concerns are decreased incomes and the negative impact of foreign-exchange movements.

Economic confidence and government spending, graph showing an upturn in Q1 2017
Confidence and government spending index graph, showing a rise in both in Q1, 2017. Reaching the highest point since Q2 2015

Global trade improvement

Global trade appears to be picking up for the first time since 2013. Trade across the world should grow at a decent rate in 2017 especially as the new US administration edges back from the more protectionist threats. 

According to data from CPB Netherlands Bureau for Economic Policy Analysis, global trade in the three months to January 2017 grew by 3.4% year-on-year. This is the fastest rate in nearly two years. 

Why is the picture improving?

Economic confidence is on the up around the world for different reasons:

  • In the US investors are hopeful that a boost from a Trump stimulus would offset any damage from moves to protectionism
  • Eurozone economic data – including decent growth, an increase in export demand and low core inflation – is encouraging despite uncertain political outlook as French and German elections loom
  • India is rebounding after last year’s short-lived slowdown linked to the government’s demonetisation campaign
  • Russia and Brazil were hit hard by collapsing oil process and currencies but now prospects are improving.
  • ‘Bellwethers’ of the global economy South Korea and Taiwan – both heavily integrated into global supply chains – are seeing exports grow at their fastest rate since 2012.

About Faye Chua, lead author, ACCA

About Faye Chua, lead author, ACCA
About Faye Chua, lead author, ACCA
About Faye Chua, lead author, ACCA

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