A Cushman & Wakefield Research Publication - 2017 Global Forecast

GLOBAL

AMERICAS

APAC

APPENDIX

EUROPE

Global

ECONOMIC DRIVERS After several years of mostly disappointing growth, the global economy is finally showing clear signs of momentum. Although the growth spurts vary greatly from one country/city to the next, the economic upswing in mid-2017 is more ubiquitous than at any other point in the current cycle. From the U.S. to Continental Europe to Asia Pacific, in mature markets as well as emerging ones, from Tier-1 to Tier-2 cities, from commodity- producing to commodity-consuming nations—a multitude of signs indicate that the world economy is set to grow faster. World GDP growth is projected to rise from 3.1% in 2016—the nadir of the current cycle—to 3.5% in 2017 and 3.6% in 2018. If these developments come to fruition, those would be the strongest back-to-back years for global growth since the initial rebound years of 2010 and 2011. Moreover, there are still significant tailwinds and scenarios that may push growth rates even higher in the near term; fiscal policy-easing in the U.S.,

soaring equity prices and rebounds in confidence may translate into higher consumption and business investment than is currently assumed. A number of developments could still derail the momentum. Global equity markets have been riding the euphoria wave of a still very hypothetical fiscal stimulus scenario in the U.S. If policymakers don’t deliver, a negative wealth effect could very well ensue, ultimately dragging economic and real estate conditions down. Another downside risk to the expansion comes from protectionist movements. A policy shift towards more isolationism and greater trade warfare would certainly impact capital and trade flows, and thus harm economic growth. Another threat comes from diverging global monetary policy conditions at a time when many central banks are in uncharted territory: e.g., negative interest rates, asset purchase

SYNCHRONIZED GROWTH REAL GDP, Yr/Yr%

0 2 4 6 8

The economic momentum is more ubiquitous now, inmid- 2017, than it has been at any other point in the current cycle.

China

World Eurozone United Kingdom

United States

Canada Japan

2016Q1

2017Q1

6 / Cushman & Wakefield

Source: U.S. BEA, Oxford Economics, Cushman & Wakefield Research