Global economic growth dipped a bit in 2016, due mainly to weaker growth in the U.S., but has picked up again this year. As a baseline forecast, we expect moderate global growth to continue for the foreseeable future, penciling in 3.6% growth this year and next, after last year's 3.1% (1)

Overview

• We expect the global economy to grow at around three and a half percent this year and next, helped by still very supportive monetary policy in the developed world. That's the baseline, but what to look out for?
  
• Watch for any signs that the Trump Administration, after a rocky start, begins to find its feet. The learning curve that every new administration goes up, recent White House personnel changes, and the political incentives ahead of the 2018 midterms offer some hope of that. Watch also for whether President Trump uses the historic opportunity he has to put his stamp on the Federal Reserve.
  
• With the French and German elections over, watch for signs that political efforts to move forward on EU integration gather momentum.
  
• Watch for signs that, after consolidating his leadership position at the upcoming National Party Congress, Chinese president Xi Jinping moves to accelerate reforms that are needed to sustain longer-term growth, even at the expense of lower short-term growth.
  
• With the Bank of Japan (BOJ) continuing with its no-holds-barred monetary policy and the labor market continuing to tighten, watch for signs of wage pressures picking up and Japan finally reflating.