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Macroeconomic
Outlook 2017
Global Growth
 
Russia
1.2
-0.4
2016 2017
 
UK
2.1
1.4
2016 2017
 
1.6
1.5
2016 2017
EUROZONE
U.S.
2.3
1.5
2016 2017
Japan
1.0
0.9
2016 2017
6.7
6.4
2016 2017
China
7.1
7.4
2016 2017
India
Brazil
0.5
-3.5
2016 2017
Key GDP figures
3.6%
World GDP Growth
4.7%
2%
 
Developed Markets
Emerging Markets
Contribution to
World GDP Growth
DM
41%
EM
59%
US Economic
Acceleration
 
Sound economic conditions
(labour market strength, confi-
dence pick up) and fiscal boost …
 
…are consistent with the Fed
raising rates
three times in 2017
Strong US Dollar,
Fed policy mistake
Risks
Emerging
Markets
Resilience
could be Tested
 
Foundations for EMs have
strengthened, helped by a more
favourable commodity cycle…
 
...but winners will be
those ones with more fiscal
and monetary room
Protectionism, Fed,
strong US Dollar
Risks
New Stimulus Ahead
A new wave of fiscal and
monetary policy measures
are under way…
…to support the inflation
outlook, profits and exports

Slow reforms,
strong Yen
Risks
Modest,
but Persistent Growth
Fiscal policy is expected to be
more stimulative in response to
social discontent…
…and the ECB* remains
supportive in order to improve
inflation expectations and
stimulate growth
Elections,
ECB tapering
Risks
Economy to Slow
(With No Drama)
Overcapacity cut, rebalanced
towards domestic sectors
leading to softer growth…
…counterbalanced by more
infrastructure spending


US policy,
trade war
Risks
Key Global Themes
TRUMPONOMICS
GEOPOLITICAL EQUILIBRIUM
Middle East,
Russia, China and EMs
US FISCAL BOOST
$3-6tn tax cut/$1tn
infrastructure spending ¹
POPULISM IN EUROZONE
72% of GDP
voting in 2017 ²
Reflation
Inflation 2017 Forecast
0.5
1.3
2.2
2.8
-0.3
0.3
1.2
0.8
JAPAN
EUROZONE
U.S.
UK
2016 Inflation Data
2017 Inflation Forecast
Main Inflation Drivers
 
 
 
REFLATION
More pro-growth fiscal policies
leading to higher inflation
COMMODITY CYCLE
Rebound in commodity cycle with oil prices
expected at $57 per barrel by the end of 2017 ³
MONETARY POLICY
Central Banks in Japan and Eurozone
continue to act to achieve inflation targets
Global Triggers and Risks
Fiscal boost
Structural reforms
Supportive Central Banks
Global
Catalysts
Fed policy mistakes
Trump disappointment
Voting EU elections
Global
Risks

Source: Pioneer Investments, as of December 31, 2016.
* ECB means European Central Bank.
¹ Source: Fiscal boost data are estimates based on President-elect campaign by 2026.
² Source: IMF estimates on 2016 Eurozone GDP data.
³ Source: WTI prices (West Texas Intermediate).


Important Information

Unless otherwise stated, all information contained in this document is from Pioneer Investments and is as of December 31, 2016. The views expressed regarding market and economic trends are those of the author and not necessarily Pioneer Investments, and are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading on behalf of any Pioneer Investments product. There is no guarantee that market forecasts discussed will be realized or that these trends will continue. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. This material does not constitute an offer to buy or a solicitation to sell any units of any investment fund or any services.


Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies.


Date of First Use: January 9, 2017.

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Macroeconomic Outlook for 2017