The year of 2017 will be better than you think, with Asia leading the way, international accounting firm Deloitte said on Monday.
Despite protectionist rhetoric from the United States and gloomy forecasts from the IMF, three factors suggest global growth is about to "surprise on the upside," it said in the first edition of their Voice of Asia series.
Chris Richardson, Deloitte Australia economist, explained that first, the global economy is finally normalizing after a decade of shocks, and a natural healing process is underpinning a more resilient recovery.
Second, world trade is already lifting and the benefits of this are spilling into Asia, and third, Asia's mega-economies of India and China, are increasingly being powered by consumer booms, acting as a stabilizing force in their economies and for the region, he noted.
Deloitte belives the global economy is stabilising. Following a series of shocks that began with the global financial crisis and then, in quick succession, the eurozone debt crisis and the geopolitical shocks in the Middle East, Europe and Asia, the global economy is finally normalizing, it said.
Deloitte predicts that global growth could in fact accelerate in 2017, with leading indicators already pointing to a lift in world trade. Global growth will trigger an upsurge in trade which, in turn, will fuel stronger growth. Asia's major markets of China and India are also powering ahead and growth in most other countries in the region are strengthening, aided by a buoyant U.S. economy.
The accounting firm believes trade is picking up. World trade volumes were damaged by successive crises and shocks in recent years, but leading indicators suggest volumes are ready to lift.
Deloitte highlights that while U.S. President-elect Trump is still largely an unknown quantity, his influence on global trade may be overstated. Indicators point to Asian and global trade strengthening, despite the rise of nationalistic and protectionist voices globally.
Deloitte China economist Xu Sitao said a new and optimistic generation is taking the lead in driving the direction of their economies: one that is technologically savvy, comfortable with the borderless consumerism of the global middle class, and yet imbued with the consumption-smoothing instincts of its parents and grandparents.
The new generation of consumer in Asia will be a stabilizing force in their economies, meaning they are likely to play an anchor role for 2017, regardless of other developments, Xu said.
