Short-Term Gains, Long-Term Hazards
The year 2017 appears to be ending on a high note, with GDP growth in much of the world continuing to rise, marking the broadest cyclical upswing since the start of the decade. But unless policymakers seize the current opportunity and reform while they still can, the inevitable future slowdown may be closer than we think.
WASHINGTON, DC – The year 2017 appears to be ending on a high note, with GDP growth in much of the world continuing to rise, marking the broadest cyclical upswing since the start of the decade. Throughout Europe and Asia, and in the United States and Canada, growth expectations have risen, while some important emerging economies that until recently were shrinking – for example, Brazil and Russia – have resumed growth.
Several countries continue to struggle, including many fuel exporters and low-income economies suffering from civil strife or natural disasters, especially drought. But faster recovery is benefiting roughly two-thirds of the world’s population.
These developments follow years of geographically uneven, stop-and-go growth following the global crisis of 2008-2009 and the subsequent 2010-2011 rebound. As recently as early 2016, the world economy sputtered, driving the price of oil to near $25 per barrel (it is now around $60) and yielding the weakest global growth rate since the outright contraction of 2009. Thus, heading into 2018, the sense of relief among many economic policymakers is palpable.