Good Times at Last?
Despite today's unprecedented political risks and large-scale geopolitical realignments, key economic indicators from around the world are looking better than they have in years. But whether global economic growth exceeds 4% this year will depend on central bankers' ability to strike the right monetary-policy balance.
LONDON – In February 2017, I wrote an optimistic commentary called “The Global Economy’s Surprising Resilience.” The piece came as a surprise to those who saw only bleak prospects for Western countries, not least the United States, where US President Donald Trump had just been inaugurated.
Now, nearly a year later, my three decades of experience in global financial markets leads me to believe that the economic situation is not quite as straightforward.
On the positive side, the half-dozen cyclical indicators I listed last February remain strong, and some have even strengthened further. One key indicator is South Korea’s monthly trade data. The country’s exports grew by 15.8% in 2017, the largest increase since 1956, when it began reporting these data. Moreover, export growth occurred even as Trump threatened to withdraw from the US-Korea Free Trade Agreement and stoked tensions with North Korea – a powerful rebuke to those who have predicted retrenchment of global trade.