A Goldman Sachs analyst has predicted that 2018 will be another year of strong growth for the worldwide economy.
‘2017 is shaping up to be the first year of the expansion in which growth surprises to the upside,’ Goldman co-chief markets economist Charles Himmelberg said in a note to clients on Thursday, reported CNBC.
‘We expect 2018 to deliver more of the same,’ said Himmelberg.
Himmelberg and his team expect the global economy to grow 4 per cent next year.
Goldman Sachs predicts that the global economy will grow 4 per cent in 2018 (file photo)
US growth in GDP on an annualized basis is shown for each quarter of the past four years
The latter half of 2017 has shown strong growth for the US economy, which posted annualized real Gross Domestic Product growth of 3 per cent for the third quarter.
Germany, Europe’s larges economy, showed strong GDP growth of 3.3 per cent in the third quarter, while growth in the UK remained sluggish but slightly better than expected at 1.6 per cent.
Australia’s economy is expected to accelerate at a ‘modest’ pace as stagnant wages weigh on consumption, the International Monetary Fund said on Monday.
Stock markets have surged in response to the strong growth, with the S&P 500 index up 14 per cent for the year in the US, and Germany’s Dax up more than 13 per cent.
Stock markets have surged in response to the strong growth, with the S&P 500 index up 14 per cent for the year in the US
‘Heading into 2018, one of the top policy risks in focus for investors is the passage of US tax reform,’ wrote Himmelberg.
Goldman predicts an 80 per cent chance that tax reform gets done in early 2018, Himmelberg said, predicting corporate tax cuts could stimulate growth.
‘A second policy risk which has fallen off of radar screens, but which is still active, in our opinion, is US trade policy,’ Himmelberg said.
Wall Street mavens are fearful that trade restrictions could put a damper on stock growths.