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Global GDP growth forecast at 2.8 pct in 2017 amid uncertainties, disruptions

Xinhua, November 17, 2016 Adjust font size:

The global GDP is forecast to grow at 2.8 percent in 2017, a very modest improvement from 2.5 percent in 2016, a research group said Wednesday.

Although a projected stabilization in energy and commodity prices may lift resource-rich economies up a little next year, the medium-term trend continues to be dominated by weaker growth in key inputs, notably investment and labor supply, the Conference Board said in its Global Economic Outlook 2017.

In the short term, geopolitical tensions, policy uncertainty, financial market volatility, and rapid changes in technology will pin the world economy to a slow-growth path, the report said.

As for the downside risks to the U.S. 2017 growth outlook, the report said a new administration will "face the challenge of managing a dual-speed economy which is largely driven on the plus side by consumer spending, fueled by stronger household balance sheets, and on the minus side by weak business investment."

Asked whether Donald Trump's victory in the U.S. presidential election will significantly change global economic outlook, the group's chief economist for North America, Gad Levanon, said it increases uncertainty but does not alter the bottom-line growth picture as of now.

He said fiscal policy measures such as tax cuts and infrastructure investments may provide some growth upside for the United States in the short term.

"But they're likely to have only a minor impact on an economy that is beginning to reach full capacity and facing the prospect of impending interest rate increases, which may reduce the appetite to invest," he added.

The group believed the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership are almost certainly dead, but new approaches to trade agreements and negotiations might need to evolve.

For other parts of the world, the Euro Area GDP is projected to dip further to 1.4 percent in 2017, down from 1.5 percent in 2016.

The UK GDP is forecast to grow only 0.8 percent in 2017, down from 1.7 percent this year. For Japan, the figure is estimated to fall to 0.6 percent next year, from 0.9 percent in 2016, according to the report. Enditem