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全文主要观点:

2017年世界经济整体呈现稳健复苏的态势。在距2008年金融危机九年之后,全球经济终于基本摆脱了危机的阴影,开始接近甚至超越潜在增长水平(IMF预计2017年全球经济将同比增长3.6%,而潜在增长水平在3.5%左右)。可以说,全球经济形势将在2018年迎来“提速换挡”。

而就中国而言,2017年,中国经济呈现出“稳中向好”势头,增强了政府对中国经济“韧性好、潜力足、回旋余地大”的信心,也在资本市场上掀起了中国经济“新周期”的激辩。2018年作为十九大开局之年,党中央将经济工作的重点转向围绕“高质量发展”,打好“三大攻坚战”,在“切实加强地方政府债务管理、保持房地产调控政策连续性、管住货币供给总闸门、重点防控金融风险”等要求下,中国经济能在何种程度上延续2017年的良好势头是宏观研判的焦点。

纵观全球,了解自身。本文将通过易麟对2018年经济形势的看法,结合UBS、AXA、JPMORGAN等各家的报告进行客观阐述。

EELION View:

Global economy is expected to be solid in 2018. Major investment banks’ research expected GDP growth could be in the range of 3% to 4% globally. The more conservative forecast is by World Bank (3.1%) while Goldman Sachs are the most bullish giving a base case of 4% for global GDP growth in 2018.

In general, it is perceived that global economy will benefit from a broad based sustainable growth. In particular, US has delivered a solid employment environment while inflation remains low. US also benefited from the lower corporate tax rate which in return corporates with free cash are expected to invest further into its domestic market and further boost the employment. Inflation should be climbing up on a more solid trend with better salary number as a result of higher employment and a weaker dollar. All these would promote a more decisive action from the Central Bank for tightening its monetary policy and tampering the QE.

While for China, economic growth is expected to be solid, as benefited from stronger global industrial demand and domestic consumption. We see a lower involvement of the state in investment and a less loose monetary policy, considered the debt that has been piled up in the previous decade. Despite of its high government and corporate leverage, a broad base credit crunch is not eminent but in certain areas/ sectors, phasing out of those non-competitive corporates with outdated technology is possible. Compared to the high speed growth in the last decade, China now focus more on quality GDP growth; in light of this, industrial upgrade, technology/ internet and “One belt one road” are the key themes that will support the relative high growth for China.

Europe will benefit from a solid growth from 2017 under a relatively stable political situation with the leadership of a tight coalition between Germany’s Angela Merkel and France’s Emmanuel Macron. Europe’s sustainable GDP growth will still largely depend on its political relationship with other economies and its currency EURO. A too strong EURO against USD is going to have an negative impact on its recovery road.

The global economy is believed to have a more solid growth on a broad base situation, 10 years after the GFC in 2008. Some risks needed to be conscious of is geopolitical tensions, protectionism that inhibit global trade, and a faster than expected strong economy which makes central bank policy maker tighten the monetary policy and tampering QE faster than expected, afterall asset price are at a peak level and any abrupt change to the interest rate will bring impact on the financial and lending market and the broader economy in corporate investment and consumption.

UBS View:

Global economic performance in 2017 looks to have been the best since 2011. Growth accelerated in the US, the Eurozone, China, Japan, Russia, and Brazil, pushing GDP worldwide up to 3.8% from 3.1% in 2016, on our estimates. The expansion has been particularly impressive for its synchronicity. Only six other times in the past 30 years has every economy in the G20 grown. As we look ahead, we forecast little change in the positive economic backdrop. Both the US and Japan are benefiting from strong labor markets and solid corporate profitability. Growth could moderate in Europe, weighed on by a stronger euro and Brexit uncertainty, and in China, where property construction is likely to slow in response to falling prices. But flourishing economies in Brazil, whose recovery from the 2015–16 recession continues, and in India, where the economic reforms of the past 12 months should start taking effect, should provide a positive offset. Overall, we expect growth of 3.8% in the coming year, a repeat of the healthy current rate of expansion.

Periods of high economic growth often sow the seeds of their own demise. But there is little evidence today of an impending recession. Historically, recessions have been caused by one or more of: oil price shocks, too-tight monetary policy, contractions in government spending, and financial/credit crises. None of these look likely to materialize in 2018.

· Asia

Economic growth in Asia expected to be 6.1% with innovation as a rising force in the medium term. China to maintain its policy direction, balancing reform and growth. Particularly like Chinese equities and Asian high yield bonds, also favour companies set to benefit from the tightening labour market in Japan.

· Europe

A stronger Euro and Brexit certainly are likely to weigh on Europe’s economy, whose growth expected to slow from 2.2% to 1.9%. Positive on Euro-zone equities, tough for euro credit investors. Optimistic on EURO.

· U.S.

US growth should remain solid in 2018. Expected a repeat growth of 2017’s 2.2% rise in GDP, and two Fed rate hikes. The US economic expansion has now spanned 101 months, making it the third longest of the postwar era. Meanwhile, the 350% cumulative total return for the S&P 500 generated thus far during this bull market represents the third highest in history. There are many who now openly question just how much longer each can endure. Within equities favour financial sector due to rising rate and the technology sector due to secular growth.

While there is no shortage of factors that will likely affect the outcome, both the durability of the US expansion and the sustainability of the current bull market will depend, to a large degree, on the three themes that loom large in this edition of the Year Ahead: politics, policy, and profits.

Two of these three P’s – politics and policy – could threaten the economic expansion and bull market in 2018, but the profit picture remains a formidable obstacle to that happening. What’s likelier is that financial markets will experience greater turbulence and perhaps more corrections than their tranquil journey in 2017. Politics and policy may not have acted as market tailwinds this past year, but they wound up being benign sources of risk. But even though the year ahead may prove more eventful amid policy shifts and political realignment, we retain our positive view on risk assets overall – at least for a while longer.

· China

China’s high growth rate, powerful state apparatus, low external debt, and closed capital account make it less susceptible to debt crises, and our base case is for its economy to continue expanding at a robust, albeit slower, pace. But debt is rising rapidly.

· Risks

The changing context brings risks that could weigh on global markets in 2018. While there are many known unknowns, and unknown unknowns, that could affect investors next year, we see three risks as the most prominent: sharply higher inflation might force central banks to tighten policy aggressively, hurting growth; geopolitical shocks could emerge from North Korea’s nuclear weapons testing and from political instability in the Middle East; and China could mismanage its rising debt, leading to a greater-than-expected economic slowdown.

Credit Suisse View:

Global growth should remain robust, with both advanced and emerging markets enjoying a more synchronized recovery. This is generally supportive of risk assets.

A key growth driver is likely to be higher capex. Companies and national markets with a focus on capex goods and services should benefit.

Inflation is likely to remain quite moderate due to structural factors, but cyclical factors suggest the low point is behind us. An unexpected upturn in inflation would signal heightened risks of faster monetary tightening, which could put pressure on asset markets.

Our base case is for only moderate monetary policy tightening in the advanced economies while in selected emerging countries, interest rates may still fall. Their markets should in general outperform.

The specific market reactions to central bank balance sheet reduction are difficult to predict. As this trend gathers pace, possible new reaction patterns should be carefully assessed.

The evolution of global trade policy should be watched carefully. If contrary to our expectations, protectionist actions become more prevalent, a more defensive investment stance would be advised.

· Asia

Growth prospects are strong across most of Asia. In India the slowdown due to the policy “shocks” of 2016 and 2017 should give way to better growth in 2018.

Elsewhere, the picture is also quite solid. Indonesia is expected to grow slightly above 5%, driven mostly by private consumption, but the current account may worsen and put pressure on the currency and inflation. The major export-oriented economies of South Korea and Taiwan should continue to benefit from the global upswing and the recovery in consumer as well as corporate capital goods expenditures.

· Europe

2017 will be remembered as the year in which growth finally reached all of continental Europe and political risks diminished, as the pro-European Emmanuel Macron was elected president in France and Chancellor Angela Merkel won a fourth term in Germany. In 2018 growth should remain robust, while a reinvigorated German- French alliance could lead to enhanced cooperation in the European Union (EU) and the Eurozone. While Brexit negotiations are unlikely to be completed, eco- nomic pressure on the UK, as well as its political fractures, suggests a move toward a soft and delayed Brexit. In Italy, the constitutional structure suggests that a centrist coalition will continue to govern after the elections in the spring, even though euroskeptic parties are stronger than elsewhere and economic fundamentals still weaker. The risk of a political crisis or euro exit of Italy thus remains limited, in our view.

· U.S.

At the end of 2017, the US economy was on a solid footing, with employment expanding, private consumption growing, corporate investment picking up but the housing expansion a bit more subdued. Monetary policy was accommodative, despite the Federal Reserve’s interest rate hikes and balance sheet reduction program. Financial conditions in general eased throughout the year on the back of a weaker USD, rising equity markets and tightening credit spreads. The view of an economy in “secular stagnation” seemed ever harder to sustain. The key questions for 2018 are how strong any fiscal policy impulse may be; whether investment growth will stay robust, and whether that translates into a productivity recovery; and whether and by how much inflation will rise.

· China

After a remarkable credit expansion over the past decade, China’s high corporate debt levels are set to remain a lingering concern in 2018. Any downturn in Chinese growth would be a risk to the global economy and markets. An apparent policy bias toward stability and credit restraint in China are encouraging, but not without risks for asset prices, the economy and the Chinese renminbi. A growth scare as we saw in 2016 cannot be ruled out, but our base case calls for a steady adjustment process with currency stability.

· Risks

Political stress in the USA

Failure of US tax reform and deeper political tensions domestically could be very negative for global equities and the USD.

Credit bubble bursts in China

Escalating corporate debt levels in China or a liquidity shock could lead to a growth slowdown or vice versa, with a severe negative impact on equities and credit.

Escalation of US/North Korea conflict

A severe escalation of North Korea tensions or an armed conflict would be highly negative for risk assets.

JP Morgan View:

The long, dark shadow cast by the global financial crisis has receded and a traditional global business cycle dynamic is taking hold. Supportive financial conditions and rising sentiment provide fuel for a second year of synchronized above-trend global growth in 2018 – at 3.3% or faster.

The J.P. Morgan forecast envisions upside to growth across developed and emerging markets.Global real GDP will grow at 3.0% in 2018 and global CPI inflation should rise toward 2.5%.The demand engine and business equipment spending are the key drivers sustaining global growth in 2018.

Not expect a turbulent political backdrop to determine the contours of the global business cycle this year and continue to place political change in the background of the 2018 outlook.

· Asia

Although the rest of Asia should slow from its recent boomy pace, the benefits of a global capex upturn should allow the regional cycle to sustain much of its strength.

· Europe

Europe has become a growth engine. The Euro area experienced back-to-back recessions in 2008/09 and 2011/12. Although the region returned to growth in 2013, the pace was very slow. The intensity of fiscal tightening eventually waned while the ECB gradually got more traction as it ex- panded its efforts from rates to LTROs to QE. The Euro area economy gained speed each year since 2012 culminat- ing in solid 2.5% GDP growth over the latest four quarters. Moreover, to varying degrees, the acceleration in Euro area GDP has pulled the rest of Europe along with it. Confi- dence has recovered, credit is flowing more freely, and low inflation has prompted the central bank.

· U.S.

We see growth close to 2% in 2018; while that is somewhat below what we expect will be realized for 2017, it is still about 0.5%-point above our estimate of sustainable trend growth. With tax reform approved, we see a modest boost to 2018 US GDP growth of only 0.25%-pts.

Inflation has been mysteriously absent this year, but historically it has not been long before unemployment below 4% began to generate firmer wage and price pressures. We forecast the Fed will hike four times in 2018.

· China

Our forecast looks for modest growth slowdown to 6.5% in 2018. We take a constructive view on the economic slowdown which is mainly due to policy efforts to reduce overcapacity, contain leverage and reduce housing inventory which will add resilience to the China economy in the long run.

· Risks

We did not expect a turbulent political backdrop to determine the contours of the global business cycle this year and continue to place political change in the background of the 2018 outlook. We look for only modest US fiscal ease and do not see NAFTA or Brexit negotiations or important 2018 elections in Europe and Latin America impinging on the outlook.

Goldman Sachs View:

For the first time since 2010, the world economy is outperforming most predictions — a trend that Goldman Sachs Research economists Jan Hatzius and Jari Stehn see not only continuing but amplifying in 2018.

Their global outlook (available below) predicts 4% GDP growth next year, a forecast notably above consensus expectations and supported by still-easy financial conditions and fiscal policy. Stubbornly low core inflation should also tick up in advanced economies as their labor markets continue to strengthen and the drag from low commodity and import prices unwinds. They look for the Fed to lean against this strength by tightening considerably more than what’s priced by the market, attempting to prevent a bigger economic overheating and recession down the road.

· Asia

Chief Asia Pacific Economist Andrew Tilton sees another year of strong growth ahead for the region, bringing with it increased inflationary pressure. He expects a broad shift toward monetary policy tightening in response, with some notable exceptions like continued dovishness from the Bank of Japan.

· Europe

Goldman Sachs Research’s Huw Pill expects Euro-area growth to show continued momentum, driven by stronger consumer and business sentiment, lower-than-expected unemployment, as well as the strength of the global economy. In the U.K., he sees some moderation in growth, as Brexit continues to affect the long-term outlook.

· U.S.

The US economy heads into 2018 with strong growth momentum and an unemployment rate already below levels that Federal Reserve officials view as sustainable. Chief Economist Jan Hatzius expects the Fed to lean against this strength with four rate hikes next year, despite a still-firming inflation backdrop.

· China

China appears to be slowing modestly, with our CAI down from a peak of 7.5% in June to 6.6% in October. While some of the most recent softness may be due to special factors (including the conclusion of the Party Congress), we also expect a drag on growth from reforms aimed at curbing the negative externalities of past expansion, including measures to contain financial risk, and improve the environment. We therefore expect Chinese growth to slow gradually from 6.8% in 2017 to 6.1% in 2019.

· Risks

The bigger risks to our global outlook are likely political. NAFTA negotiations continue to struggle and we believe that the Trump Administration could announce its intent to withdraw if the talks do not result in a revised agreement by early 2018. While the overall implications for the US economy would likely be modest, US-Mexico trade could be substantially affected and some industries could face disruptions (especially the auto sector). In Europe, the impact of a populist win in the Italian election in 2018 could be profound. But while opinion polls point to a strong showing from the Five Star Movement, our base case is that the election will deliver a broad coalition which will not bring Italian membership of the EU or participation in the Euro into question. Moreover, escalating tensions around North Korea’s nuclear ambitions and ongoing instability in the Middle East pose geopolitical risks with highly uncertain but potentially important consequences for the global economy.

AXA IM View:

A decade after the financial crisis, one of the worst the world has ever endured, we now appear to be entering something of a euphoric phase. We are witnessing strong global growth, which could peak in 2018, coupled with a very favourable policy mix as the global stock of QE potentially reaches its peak and fiscal policy is neutral to supportive. In addition inflation looks like it is recovering, unemployment is falling sharply, most currencies are trading within a narrow band while volatility is at record lows and liquidity looks ample.

· Asia

Emerging Asia should continue to benefit from the global manufacturing recovery and the IT capex cycle.

· Europe

We see sequential GDP growth peaking in the coming quarters and therefore expect a slowdown in 2019 (1.8%). Indeed, the strong dynamics of non-residential corporate investment in 2017 were supported by several tailwinds unlikely to be repeated next year, from the easing of financial conditions to the rebound in sentiment and demand expectations. This may be partly o set by the accelerating world demand which will also benefit Eurozone exports.

Meanwhile, Eurozone core inflation should rise but only modestly, reaching 1.3%yoy by end-2018 versus 0.9% in October 2017. We believe Eurozone core inflation remains reactive to growth2 which, thanks to the past and forecast reduction of the output gap, should translate into wage and price acceleration throughout 2018. This should remain modest as past, subdued inflation should still weigh on expectations, as witnessed in the US since 2015.

· U.S.

Beyond this limited fiscal stimulus, we see US growth supported in 2018 by two main factors: household consumption and corporate investment. Consumption will be boosted by solid employment growth (with the U-six broader unemployment measure going below 8% by end-2018 from 8.5% as at the end of 2017Q3), slowly accelerating earnings and a further (but small) decline in savings underpinned by wealth e ects. Thanks to past earnings growth (and tax reform expectations), corporate investment should accelerate (from 4.6% to 5.6% in 2018), reinforced in the shale industry by higher oil prices (US$62 versus US$45 in June). An upside risk to our outlook would see looser implementation of financial rules by agencies, which could stimulate faster mortgage lending.

· China

China was a positive surprise in both macroeconomic and financial market terms in 2017. While a solid rebound in export growth helped, the key surprises came from internal o icial policies. Tangible progress made in reducing overcapacity, housing market de-stocking, financial deleveraging and an environmental clean-up were key drivers of the strong performance in financial markets and the rebalancing of the real economy.

Looking ahead into 2018, we think the economy, which has already passed its cyclical peak, will slow further as reform policies eat into near-term growth. In particular, without the o set from the subsidy-induced boom in lower-tier cities, policy tightening on the housing market will have a more visible impact. Financial deleveraging will also continue, as regulatory tightening makes further inroads into curbing shadow banking growth. Higher funding costs and tighter liquidity will likely reduce credit growth further, hitting the credit-sensitive parts of the economy. Finally, the campaign on environmental protection will curb production and investment in high-pollution industries, which will weigh on China’s demand for commodities.

· Risks

Dealing with the 2017 political legacy: Catalonia, Italian elections, Brexit… Beyond politics, several risks have the potential to derail our positive macroeconomic scenario, especially as this expansion has been already long-lived. The high levels of corporate leverage in the US (in late cycle) and China (in a structural slowdown) are clear worries. A slight contraction as a result of the NAFTA negotiations and the potential for a spill over into global trade openness should also be monitored in 2018.

More fundamentally, this upbeat macroeconomic backdrop (somehow the opposite of stagflation with buoyant growth and modest inflation) could be derailed by inflation surprising on the upside, clearly a growing concern, or if growth disappoints.

However, we see macroeconomic risks as more balanced in 2018. Our scenario does not include much acceleration in productivity despite the promising benefits of the digital revolution. We do not envisage in our baseline a large easing of financial regulations in the US, which could boost mortgage lending and equity withdrawals.

Finally, the Eurozone could surprise on the upside once again from a macroeconomic perspective but also in terms of further European integration and Eurozone resilience.

Further ahead in time, macroeconomic risks remain important: while the massive monetary easing since 2008 avoided to repeat the mistakes made in the early 1930s, exiting these policies is an unprecedented challenge.

Besides, economic policy is now much more constrained. The transfer of leverage from the private to public sector following the global financial crisis implies much heavier constraints on the two key macroeconomic shock absorbers: fiscal and monetary policies. When the next shock hits the global economy, fiscal space (especially seen in a politically acceptable meaning) is likely to still be very limited across major economies.

World Bank View:

The World Bank forecasts global economic growth to edge up to 3.1 percent in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

· Asia

Growth in the region is forecast to slip to 6.2 percent in 2018 from an estimated 6.4 percent in 2017. A structural slowdown in China is seen offsetting a modest cyclical pickup in the rest of the region. South Asia’s growth is forecast to accelerate to 6.9 percent in 2018 from an estimated 6.5 percent in 2017. Consumption is expected to stay strong, exports are anticipated to recover, and investment is on track to revive as a result of policy reforms and infrastructure upgrades.

· Europe

Growth in the region is anticipated to ease to 2.9 percent in 2018 from an estimated 3.7 percent in 2017. Recovery is expected to continue in the east of the region, driven by commodity exporting economies, counterbalanced by a gradual slowdown in the western part as a result of moderating economic activity in the Euro Area.

 · U.S.

Growth picked up in 2017 to an estimated 2.3 percent, supported by strengthening private investment. The recovery reflected a diminished drag from capacity adjustments in the energy sector, rising profits, a weakening dollar, and FIGURE 1.3 Advanced economies Growth in advanced economies strengthened in 2017, helped by a recovery in capital spending and exports. The recovery was markedly stronger than expected in the Euro Area and, to a lesser degree, in the United States and Japan. Advanced-economy growth will gradually slow toward potential over the forecast horizon, as the cyclical upturn moderates. A. GDP and demand components B. Growth growth Source: World Bank. A. B. Green diamonds correspond with the June 2017 edition of the Global Economic Prospects report. Shaded areas indicate forecasts. A. Aggregate growth rates and contributions calculated using constant 2010 U.S. dollar GDP weights. Click here to download data and charts. robust external demand (Figure 1.4). Economic activity was little disrupted by major hurricane landfalls in September, and reconstruction efforts are likely to offset any negative effects over time (Deryugina, Kawano, and Levitt 2014). Private consumption continued to grow at a robust pace despite modest real income gains and moderate wage growth, as the personal savings rate fell further. Households’ income expectations continued to recover following a prolonged period of weakness.

Labor market slack diminished further and employment growth slowed. With the economy moving closer to full employment, and despite inflation running below target, the U.S. Federal Reserve continued to normalize monetary policy in 2017, raising interest rates and starting to gradually reduce the size of its balance sheet (FOMC 2017). Recently legislated corporate and personal income tax cuts are expected to provide a lift to activity over the forecast horizon— particularly to investment, by lowering the statutory corporate tax rate and by allowing full expensing of new equipment. He benefits of fiscal stimulus will likely be constrained because the economy is already operating at near full capacity and the pace of monetary policy normalization might slightly accelerate.

U.S. growth is expected to reach 2.5 percent in 2018, above previous expectations, and then to moderate to an average of 2.1 percent in 2019-20—toward the upper range of potential output growth estimates (Congressional Budget Office 2017; OECD 2017a; Federal Reserve Board 2017). Low labor participation and weak productivity trends remain the most significant drag on U.S. growth over the longer term (Fernald et al. 2017).

· China

Growth in China is estimated to have reached 6.8 percent in 2017—an upward revision from June forecasts, reflecting continued fiscal support and the effects of reforms, as well as a stronger-thanexpected recovery of exports and a slight positive contribution from net trade (World Bank 2017a; Figure 1.7). Domestic rebalancing continued, with drivers of activity shifting away from state-led investment. China’s trade flows recovered markedly in 2017, partly reflecting rising commodity imports amid tightly enforced production cuts as well as strengthening foreign demand.

Consumer price inflation increased steadily throughout the year but remained below target, while producer price inflation was stable, supporting a recovery of industrial profits. House price growth continued to slow, reflecting tighter regulations in larger cities. Despite further monetary and regulatory tightening in 2017, the total stock of non-financial sector debt, at about 260 percent of GDP, continued to expand on a year-on-year basis (BIS 2017; World Bank 2017a).

On the external side, the current account surplus continued to narrow but, with a moderation of net capital outflows, foreign exchange reserves recovered in 2017. In the second half of the year, the renminbi reversed some of its previous nominal appreciation following the removal of reserve requirements for foreign currency trading. Chinese growth is projected to edge down in 2018 to 6.4 percent as policies tighten, and average 6.3 percent in 2019-20. Key downside risks to the outlook stem from financial sector vulnerabilities, the possibility of increased protectionist policies in advanced economies, and rising geopolitical tensions. Long-term fundamental drivers of potential growth point to a further slowdown in China’s growth over the next decade, as population aging is expected to depress labor supply.

· Risks

Risks to the outlook remain tilted to the downside. An abrupt tightening of global financing conditions could derail the expansion. Escalating trade restrictions and rising geopolitical tensions could dampen confidence and activity.

IMF View:

Global economic activity continues to firm up. Global output is estimated to have grown by 3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall and ½ percentage point higher than in 2016. The pickup in growth has been broad based, with notable upside surprises in Europe and Asia. Global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9 percent. The revision reflects increased global growth momentum and the expected impact of the recently approved U.S. tax policy changes.

 · Asia

The growth forecast for 2018 and 2019 has also been revised up for other advanced economies, reflecting in particular stronger growth in advanced Asian economies, which are especially sensitive to the outlook for global trade and investment.

· Europe

Growth rates for many of the euro area economies have been marked up, especially for Germany, Italy, and the Netherlands, reflecting the stronger momentum in domestic demand and higher external demand. Growth in Spain, which has been well above potential, has been marked down slightly for 2018, reflecting the effects of increased political uncertainty on confidence and demand.

· U.S.

The U.S. tax policy changes are expected to stimulate activity, with the short-term impact in the United States mostly driven by the investment response to the corporate income tax cuts. The effect on U.S. growth is estimated to be positive through 2020, cumulating to 1.2 percent through that year, with a range of uncertainty around this central scenario. Due to the temporary nature of some of its provisions, the tax policy package is projected to lower growth for a few years from 2022 onwards. The effects of the package on output in the United States and its trading partners contribute about half of the cumulative revision to global growth over 2018–19.

· China

Growth is expected to moderate gradually in China to 6.6% in 2018 (though with a slight upward revision to the forecast for 2018 and 2019 relative to the fall forecasts, reflecting stronger external demand).

· Risks

Risks to the global growth forecast appear broadly balanced in the near term, but remain skewed to the downside over the medium term. On the upside, the cyclical rebound could prove stronger in the near term as the pickup in activity and easier financial conditions reinforce each other.

On the downside, rich asset valuations and very compressed term premiums raise the possibility of a financial market correction, which could dampen growth and confidence. A possible trigger is a faster-than-expected increase in advanced economy core inflation and interest rates as demand accelerates. If global sentiment remains strong and inflation muted, then financial conditions could remain loose into the medium term, leading to a buildup of financial vulnerabilities in advanced and emerging market economies alike. Inward-looking policies, geopolitical tensions, and political uncertainty in some countries also pose downside risks.