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Research: Worldwide political uncertainty = unpredictable economies

February 24, 2017

The wildly fluctuating and uncertain political climate in both the U.S. and Europe may cause some real problems for the economy this year for both areas, while the cumulative effects of over-indebtedness and bad loans could be leading up to a banking crisis in China. Those are just two of the findings of Euromonitor International's latest research on the world's economies and consumers in the year ahead.

In the analysis, the organization's data experts anticipated that developed markets would see slowing growth as consumers pull back on spending, according to a news release about the new White Paper. The research showss that factors like too much debt, slowing productivity and an increasing aging population are contributing to economic stagnation this year.

"In emerging and developing markets, real consumer spending growth is expected to strengthen in 2017, driven by markets such as China, India and the ASEAN," Euromonitor Global Lead of Economies and Consumers Sarah Boumphrey, said in the release. "Brazil and Russia are expected to return to growth next year, albeit weak growth. India should continue to perform well, with the strongest growth in all major markets, although downside risks stem from demonetisation."

The report identified three key trends in 2017:

Global uncertainty triggered by U.S. election results: Obstacles presented by the world's adjustment to the Trump administration and other political changes, include higher trade tariffs and more immigration restrictions, which Euromonitor expects to trigger a decline in GDP growth to 0.9 percent this year.

Economic effects of Europe's move to the right: As an increasing number of Right-wing parties gain footing in Europe, and concern over the game-changing "Brexit" decision, both continue to upset stability in those economies.

Chinese over-indebtedness and bad loans could worsen:The Chinese corporate sector poses ever-increasing pressure on Asian economies, along with a continuation of high credit growth

The organization's research also provided insight into which cities worldwide will grow most, along with what the most significant business challenges will be fore each.