Reuters polls show the global economy is on a ‘steady course’ and that China is a worry

Reuters reporting overnight on the results of multiple polls – in summary “the world economy can expect steady growth at best over the coming year, but any rapid slowdown in China as it tries to rebalance its economy could upset the still-unsteady progress”.

• Growth in the United States looks set to outpace its peers
• Japan and the euro zone still lagging
• Emerging markets – particularly Latin America – in for a challenging year
• The poll results suggest that exuberance in financial markets, especially stock markets, may have been overdone in the past few years on expectations for a robust pick-up in global growth
• With a few notable exceptions like Britain, developed economies are also showing scant evidence of an imminent and significant improvement in hiring, particularly so in the euro zone and the United States

“It is important to stress that the pace of expansion in the advanced world will remain modest, keeping inflation low and disinflationary risks high in countries with considerable economic slack,” Craig Alexander, chief economist at TD Securities, wrote in a note to investors.

• Overall, the world economy is expected to grow 3.4 percent this year (below the 3.6 percent projected by the IMF and the January Reuters poll). That is still better than the 2.9 percent clocked last year.

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