* Reuters Global Economic Outlook results http://tmsnrt.rs/2e7JFpt
By Rahul Karunakar
April 20 (Reuters) - The global economy is in a broad-based
upturn with core inflation at last on the rise, according to a
majority of economists polled by Reuters, but the worldwide
gains remain under threat from trade protectionism.
Those findings come as the semi-annual gathering of finance
officials from the International Monetary Fund, the World Bank
and the Group of 20 major economies kicks off in Washington,
where the case against protectionist trade policies is expected
to be a major theme.
Recent optimism on the global economy found in the Reuters
poll is based on manufacturing and trade gains in some major
economies and is in line with the IMF's upgraded projections in
its latest quarterly World Economic Outlook.
"For the first time in five years, all the major economies
seem to be growing in sync," noted Ajay Rajadhyaksha, head of
macro research at Barclays.
"The global trade recession is over, fears of deflation have
faded even as inflation pressures seem muted and the worst fears
on global trade -- such as the U.S. immediately imposing tariffs
on major trading partners -- have not come to pass."
The Reuters polls of over 500 economists across Asia, Europe
and the Americas, however, suggested that concern remains about
But on the economy as a whole, it revealed upgrades, or no
change to growth forecasts compared with previous months, as
well as a slightly stronger inflation outlook across most
Global growth is forecast to rise to 3.4 percent this year,
followed by 3.5 percent next -- back above the pace it was
expanding at before the financial crisis struck almost a decade
While the latest consensus was slightly lower than the IMF's
projection of 3.5 percent global growth in 2017, the range of
forecasts in the poll pointed to a slightly more optimistic
outlook this time around, with higher highs.
Global trade is on track to expand 2.4 percent this year
after growing at the slowest pace since the financial crisis,
just 1.3 percent, in 2016, according to the World Trade
PLENTY OF RISKS
WTO director-general Roberto Azevedo said last week there
was "deep uncertainty" about economic and policy developments,
particularly in the United States and clarity was needed on U.S.
President Donald Trump's "America First" trade policies.
Similar concerns were voiced by an overwhelming majority of
economists who answered an additional question in the Reuters
poll, suggesting broad agreement among economists on the need to
While U.S. Commerce Secretary Wilbur Ross said such warnings
were "rubbish," because the United States was less protectionist
than its trading partners, Trump has made reducing trade
deficits a key focus of his economic agenda to try to grow U.S.
Doubts have risen, however, not only about Trump's ability
to push through reflationary policies, but also around his other
promises as confidence has eroded after the U.S.
administration's failed attempt to overhaul healthcare.
"A rise in trade protectionism is still one of the major
threats, even though it would appear that the likelihood of this
taking place having subsided a bit," said Elwin de Groot, senior
market economist at Rabobank.
Protectionism, though, is not restricted just to Washintgon.
There is a rise in nationalist sentiment worldwide, starting
with Britain's vote last year to leave the European Union and
including various candidates in France's presidential election.
Euro zone economic growth is forecast to be steady despite
the potential disruptions.
"While most of the attention in Europe has been on national
elections, the economy has been improving steadily, helped by a
rebound in business investment and contributions from household
consumption and public spending," said Barclays' Rajadhyaksha.
"Meanwhile, the effect of the Brexit vote on both the UK and
the euro area so far has been less significant than most
Indeed, previous Reuters polls showed a hard Brexit would
cause the most damage to Britain's economy, but the latest
survey showed growth forecasts were upgraded for the UK from
"Plenty of political, geopolitical and policy uncertainties
persist... and changes in the world order will no doubt unfold
in the coming years. But for now there is no denying that the
data globally have been better than expected," Janet Henry,
chief economist at HSBC, wrote in a note.
"Inevitably there is a sense that things are finally
returning to a 'more normal' environment whereby the
extraordinary world of near-zero rates and frequent doses of
quantitative easing may no longer be required to sustain even a
(For other stories from the poll)
(Polling, analysis and additional reporting by Reuters Polls
Bengaluru and bureaus in Jakarta, Seoul, Beijing, Bangkok, Kuala
Lampur, Sydney, Shanghai, Tokyo, Hanoi, London, Milan, Paris,
Stockholm, Istanbul, Dubai, Cairo, Johannesburg, Toronto,
Brasilia, Mexico City, Lima, Buenos Aires, Bogota, Caracas and
Santiago; Editing by Ross Finley/Jeremy Gaunt)
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