Markets remain optimistic over 2017 growth outlook; monetary policies to remain accommodative: Nordea Research

Markets are expected to remain optimistic over the growth outlook in 2017, following upbeat confidence from global purchasing managers in recent months. Also, monetary policies across the globe are also expected to remain accommodative, with the Federal Reserve already having hinted at triple rate hikes in the upcoming year, if conditions remain perfect.

Purchasing managers as well financial markets seem to ignore events first and foremost because of the rise in commodity prices. This helps commodity exporters such as Russia, Brazil and South Africa to pull out of the economic mire, but as prices are still relatively low, the price increases do not derail the economies of the commodity-importing countries. The growth environment is also still favourable. Interest rates are for example still at record lows and will remain so in most countries, Nordea Research reported.

Even in the United States, where the Fed recently raised rates and will follow up with more rate hikes next year, monetary policy will continue to support economic activity. Moreover, as Donald Trump will boost the economy through tax cuts and increased public spending, US economic growth is set to accelerate during the year.

Also other major economies such as Japan and China pursue economic policies aimed at supporting growth. So all other things being equal, there are reasons to hope for a fairly good year for the international economy in 2017.

"There are exciting elections ahead in Europe and perhaps the new year will prove just as unpredictable as 2016," said Helge J. Pedersen, Chief Economist, Nordea Research.