The outlook for global growth looks more and more bleak, warned a number of experts in recent weeks. In addition to the most impending most identifiable possible factor of destabilization that is the upcoming US presidential election, the threat of a weaker growth than expected in 2017 could mainly come from Europe.
According the European Central Bank (ECB), the unknown consequences of the United Kingdom (UK)’s exit from the European Union (EU) – the “Brexit” voted on June 23, 2016 – will be the main reason behind a major bearish risk. The euro area is projected to grow at a 1.4% rate while the UK is projected to grow by just 1.0% in 2017. Summing up, the worst has yet to happen as regards the Brexit.
If the OECD counted Europe as a weak spot as well, it stressed on the risk posed by exceptionally low if not negative interest rates that “are distorting financial markets and raising risks across the financial system” as a whole. The two institutions also cited China as a main threat to emerging economies’ growth next year although a growing number of analysts are wondering whether China can be still counted among emerging markets.