In the coming years, the moderate recovery of the world economy is expected to continue. However, we project the synchronised recovery will lose some tailwind going forward; hence, we have revised our forecasts for global growth lower.
Furthermore, policy tightening in China has exceeded market expectations and a clear slowdown in activity is seen there this year.
"Our baseline scenario for the global economy is for more of the same, with the US growing around 2 percent and the euro area growing by just below 2 percent. Although sentiment is improving and political risks in Europe have abated, this is mitigated by a bigger drag on global growth from China, where we expect the economy to decelerate in 2017 and 2018 due to policy tightening," Danske Bank commented in its latest research report.
