Market research firm Euromonitor International has released a new white paper, Global Economies and Consumers in 2017, that suggests economic sluggishness ahead.
According to Euromonitor, consumer expenditure will slow in developed markets as 2017 proceeds. With many developed countries struggling to raise productivity, weighed down by debt and confronting an ageing population, stagnation represents a threat, Euromonitor cautioned. The Eurozone will continue to experience anemic growth, with a slowdown in all major economies threatening for next year.
Factors impacting the Euromonitor outlook include the aftermath of elections in the United States, which has prompted global political and economic uncertainty. Possible trade tariffs and immigration restrictions could generate a downturn in the U.S. economy, with gross domestic product growth falling to 0.9% in 2017. At the same time, political risks threaten to obstruct economic growth in Europe as right-wing parties gain ground across the continent. Concern surrounding the Brexit withdraw of Britain from the European Union could lower demand in the United Kingdom and add to vulnerability of European economies.
In Asia, the over-indebted Chinese corporate sector will put increasing pressure on the national economy. High credit growth is anticipated to carry on in China, so bad loans are a cause for concern as is a potential banking crisis, which could emerge sometime before 2020.
However, Euromonitor did see some potential in the global economy. Sarah Boumphrey, Euromonitor global lead of economies and consumers, said, “In emerging and developing markets, real consumer spending growth is expected to strengthen in 2017, driven by markets such as China, India and the ASEAN. Brazil and Russia are expected to return to growth next year, albeit weak growth. India should continue to perform well, with the strongest growth in all major markets, although downside risks stem from demonetisation.”