Upturn in global growth probably sustainable, says Wells Fargo

In a monthly economic outlook, Wells Fargo Economics Group said they expect that global economic growth may be starting to awaken from its year-long slumber.

Recent data has shown that GDP growth in the United States in Q4 2016 was more or less in line with consensus forecasts, while growth rates in China, the Eurozone and the United Kingdom were all stronger than expected, albeit modestly.

In addition, collapse in commodity prices may have largely run its course and the uptick could start to support  income growth in many commodity-producing economies. Consequently, growth rates in these economies are starting to stabilize. Brazil and Russia are slowly emerging from deep recessions. Hard landing fears in China have eased, however, China will not likely return to double-digit rates of economic growth anytime soon.

"We do not envision making any changes to our GDP growth forecasts for Mexico, Canada and China, nor to our forecast for U.S. export growth, at least not at this time, based on assumed U.S. policy changes. We really need to wait and see what type of trade policy the new administration may adopt." said Wells Fargo in a report.