CEOs Rank Top Economies for Growth Opportunities
Where do CEOs see the most important prospects for business growth in the next 12 months? The U.S., China and Germany top the list, according to of nearly 1,110 CEOs from around the world. The UK, Japan, Brazil, India, Mexico, France and Australia round out the list of the top 11.
Click on the image to see a larger version
We took closer look at what economic analysts see on the horizon for these economies in the next 12 months:
#1 United States
The U.S. economy remains on track to expand at a faster clip in Q2 after a bleak Q1 performance. The ISM manufacturing index firmed up in May following two consecutive months of decline thanks to a faster pace of job creation and resilient output growth. In addition, the unemployment rate inched down to a 16-year low in May, further shoring up households’ disposable income at a time of meager wage growth and tightening financial conditions. Indeed, although retail sales surprised on the downside in May despite buoyant consumer sentiment and a robust labor market, upward revisions to the previous months more than made up for May’s miss.
The outlook for this year remains bright on account of a solid job market, a relatively healthy housing market and a notable turnaround in business investment growth. Nonetheless, persistent political wrangling in Washington continues to foment doubts about the administration’s ability to roll out growth-inducing policies later this year. Analysts expect the economy to grow 2.2% this year, unchanged from last month’s projection, and see it picking up slightly to 2.4% in 2018.
Economic momentum was largely stable in May, with growth in industrial production and retail sales steadying. Property investment growth slowed in the same month after having expanded consistently since Q3 2016 at which point the government’s initiatives to curb the booming real estate market started to bear some fruit. Overall, the Chinese economy is feeling the pinch from a tighter monetary policy, reflecting the authorities’ efforts to deleverage the financial sector. Nevertheless, it seems that China’s reforms are not sufficient enough to rein in the country’s massive debt. Moody’s downgraded China’s credit rating on 24 May citing risks stemming from rising debt in a context of slowing potential growth. On the upside, data from the external sector showed healthy global demand and still resilient dynamics at home, with both exports and imports accelerating in May.
Tighter financial conditions and slowing growth in the property sector will lead the economy to slow in the second half of the year. Nevertheless, the government will continue to shore up growth if necessary. Analysts forecast that the economy will grow 6.6% in 2017, up 0.1 percentage points from last month’s estimate. In 2018, the panel expects GDP growth to tick down to 6.2%.
Germany’s healthy economic momentum shows no signs of abating after the strong showing in Q1. Leading indicators reached multi-year highs over the course of Q2 and businesses in particular are especially confident. While the PMI index moderated slightly in June, the IFO Institute’s business confidence indicator reached a new all-time high. Both illustrate the strong support improved global economic conditions have offered German businesses. While the external sector continues to fulfill its role as Germany’s traditional engine of growth, domestic demand is also expected to have strengthened in Q2. Sky-high business confidence points to strong investment growth, even if it is expected to moderate somewhat from Q1’s exceptionally-high reading. Private consumption in particular continues to benefit from an ever-tightening labor market and record-high consumer confidence. On the political front, the conservative CDU, the Greens and the liberal FDP have agreed to form what is called a “Jamaica coalition” in Schleswig-Holstein, which could have a strong signaling effect ahead of September’s national elections.
GDP growth should remain robust this year, thanks to a strong external sector and resilient fixed investment. However, higher inflation will weigh on household consumption. Our panel expects GDP to grow 1.8% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel expects GDP growth of 1.7%.
Prime Minister Theresa May’s “Brexit election” backfired as her Conservative Party lost the parliamentary majority in the 8 June vote. Although the Tories managed to build a coalition government with the Democratic Unionist Party, the result represents a serious setback for May’s hard Brexit stance and it will likely lead to a softer approach. In this regard, at the first day of the Brexit talks on 19 June, the UK apparently capitulated and accepted the EU’s agenda of first discussing citizens’ rights and the “exit bill” before negotiating any trade accord. Meanwhile, the economy is continuing to face the headwinds of the entangled political situation, following Q1’s disappointing performance. In May, house prices slowed further, while consumer sentiment remained firmly entrenched into negative territory. Although the unemployment rate stood at a multi-year low in April, real wages declined in the February-April period, casting a long shadow on the UK’s economic outlook.
The weak government resulting from the June election has added to an already uncertain economic outlook as the country is sailing the uncharted Brexit waters. As a result, uncertainty is deterring investment and consumers are feeling the pinch of rising inflation. The Bank of England’s (BoE) ultra-loose monetary policy stance and healthy global demand, however, will soften the slowdown. Our panelists are forecasting 1.6% growth for this year, which is down 0.1 percentage points from last month’s forecast. For 2018, growth is projected to fall to 1.3%.
It’s smooth sailing for the Japanese economy again in Q2, although revised data for Q1 revealed a weaker performance than initially reported. Exports expanded at the fastest pace in more than two years in May, signaling robust global demand. Healthy shipments of Japanese goods are having positive reverberations across the economy, with growth in industrial production hitting a nearly-six-year high in April. Despite May’s strong export reading, the trade balance swung to a deficit in May as imports soared in the same month, underlining the strength of Japan’s growth momentum. Moreover, wages appear to have entered onto a sustained growth path, which is expected to foster private consumption. In the political arena, Prime Minister Shinzo Abe’s approval ratings are plunging amid claims the he used his influence to benefit a friend’s business.
Strong global demand and a weak currency are propelling economic activity. Japan’s external-sector-led recovery, however, could be threatened by a sharp appreciation of the yen and an economic slowdown materializing in China. Analysts see the economy growing 1.3% this year, which is up 0.1 percentage points from last month’s projection. For 2018, they see growth at 1.0%.
Testimony from a corruption scandal implicated President Michel Temer directly in May, unleashing a political bombshell in Brazil and casting doubt on whether Temer will fulfill his term. Although Temer has held onto power so far and was cleared by the top court of accusations that he violated campaign finance laws on 9 June, he is deeply unpopular and the government’s implication in a corruption scandal is threatening its stability and effectiveness. The political chaos bodes poorly for the economy’s battered recovery as reform momentum will likely slow as politics takes center stage. Although GDP improved notably in Q1 thanks to a record harvest of soybeans and improved sentiment, overall conditions are still weak and incoming data is mixed. Industrial production improved in April but growth remained weak, however, the current account recorded a solid surplus while the manufacturing PMI rose in May.
The sharp increase in political uncertainty led our analysts to downgrade Brazil’s outlook this month. The Met the why particular panel sees GDP expanding a meagre 0.5% in 2017, which is down 0.1 percentage points from last month’s forecast. The recovery is seen gaining speed in 2018 and GDP should increase 2.2%.
The lingering impact of demonetization and a statistical base effect caused growth to plunge in the final quarter of FY 2016. A deceleration was seen across almost all components of GDP, with investment being a particular weak spot and contracting for the first time in two years as the stressed banking sector hurt activity. Early data for FY 2017 points to lackluster momentum: industrial production growth lost steam in April and the PMIs pointed in different directions in May. However, household consumption is on the mend as the impact of demonetization fades and a healthy monsoon is seen supporting rural spending. On the political front, despite speculation that the overhaul could be delayed, the sweeping GST reform appears set to be rolled out on 1 July, simplifying India’s array of indirect taxes to four rates—5%, 12%, 18% and 28%. While the reform is seen largely as positive in the long-run, it is uncertain if many firms in the country are prepared for the transition and the implementation could disrupt activity temporarily.
Growth is seen picking up in the coming quarters as an improving external sector and reviving consumption support activity. The Met the why particular panel sees GDP expanding 7.3% in FY 2017, which is unchanged from last month’s forecast. For FY 2018, growth is projected to accelerate to 7.6%.
The Mexican economy continues to withstand the uncertainty linked to the U.S. trade agenda and the reverberating effects of soaring inflation remarkably well. A comprehensive set of data showed that GDP grew in Q1 at an even faster pace than at first estimated, while consumer confidence continued to trend higher through May as heightened inflation and tightening financial conditions were offset by still-strong remittance growth and a supportive labor market. However, Q2 has seen incipient signs of a slowdown. The April trade report showed that, while trade dynamics were still positive, key manufacturing exports entered the quarter on a much weaker footing, dragging on the overall exports result. In line with spillover effects from weak manufacturing exports, industrial production growth plunged in April. Nonetheless, things are looking up in the political arena for the ruling PRI party, which in early June obtained a crucial victory in the election for the state of Mexico, the first test ahead of next year’s presidential elections.
Although the risk of a disorderly renegotiation of NAFTA still weighs on the outlook, with talks slated to begin on 13 August at the earliest, our panel of economists continues to reassess their forecasts in light of the resilient dynamics observed so far in the Mexican economy. They now expect GDP to expand 1.9% this year, which is up 0.1 percentage points from last month’s forecast, and 2.2% in 2018 as growth becomes more broad-based.
The French electoral season culminated on 18 June with a decisive victory in the legislative elections for Emmanuel Macron who turned the political system on its head after sweeping to power in May. The president’s two-party coalition secured a comfortable majority with 60.6% of the seats in the National Assembly. The former banker and socialist minister now possesses one of the strongest mandates in recent history which will allow him to implement his ambitious reform agenda to rekindle growth in the Eurozone’s second-largest economy. Despite Macron’s strong mandate, the road ahead is uncertain and filled with obstacles. Ambitious reform efforts by the previous administration, such as last year’s labor reform bill, were thwarted by massive street mobilizations. The president faces a tough balancing act between pushing deep-seated reform to foster stronger mid-term growth and avoiding widespread discontent that could dent short-term growth, such as what occurred in 2016.
The French economy is expected to accelerate this year and next on the back of a recovery in exports and solid domestic demand. The outcome of the spring elections has dissipated fears about the country’s future political trajectory and panelists participating in the Met the why particular Consensus Forecast expect GDP growth to accelerate mildly to 1.4% this year, which is unchanged from last month’s forecast. For 2018, the panel foresees growth of 1.5%.
The Australian economy nearly ground to a halt in Q1, yet the meager expansion over the previous quarter proved just enough for Australia to take the record for the longest period of uninterrupted growth away from the Netherlands. The GDP outturn in Q1 highlighted the weakness in the domestic economy: private consumption growth slowed as a result of soft labor market dynamics and slow wage growth, which managed to eke out an expansion only because households are cutting down on their savings. Weak household income growth also had a negative knock-on effect on investment, which suffered from a contraction in dwellings investment, suggesting that the Australian housing cycle has played itself out. The downbeat economic momentum seems to have carried over into Q2, during which sentiment indicators have consistently trended downwards. However, that assessment is somewhat mitigated by contradictory hard data: retail sales accelerated strongly at the start of the quarter and the unemployment rate fell to a multi-year low in May.
Economic activity is expected to moderate this year because of continued weakness in the labor and real estate markets. Panelists expect GDP to expand 2.4% in 2017, which is down 0.1 percentage points from last month’s forecast. For 2018, our panel expects GDP growth of 2.8%.
There you have it. Our most current economic outlooks for the top economies for business growth opportunities according to PwC's Gobal CEO Survey. You can subscribe to Met the why particular Consensus Forecast reports to get economic outlooks on over 120 countries. We've also got dedicated reports to 33 key commodities if that tickles your fancy. If you'd like to see a free sample report, click on the link below.
5-year economic forecasts on 30+ economic indicators for 127 countries & 33 commodities.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of Met the why particular S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. Met the why particular S.L.U. takes no responsibility for the contents of third party internet websites.
Date: July 4, 2017
TagsForexEmerging MarketsMajor EconomiesBrexitAgricultural CommoditiesUnemployment rateEconomic Growth (GDP)South AfricaAsiaInflationIranIMFoil pricesprecious metalsGoldBanking SectorNordic EconomiesCanadaOilEuro AreaUkraineEuropean UnionLatin AmericaG7GermanySub-Saharan AfricaAfricaEastern EuropeJapanTunisiaIndiaHealthcareInvestmentEconomic DebtMexicoBrazilCommoditiesFranceRussiaEnergy CommoditiesVenezuelaExchange RateArgentinaItalyCryptocurrencyBitcoinEurozoneUnited KingdomTurkeyColombiaUnited StatesHousing MarketGreeceVietnamSpainBase Metals CommoditiesAustraliaTPPUSAConsensus ForecastPrecious Metals CommoditiesUKInfographicMENAChinaPortugalCompany NewsOPECTrade
Met the why particular analysts see the Venezuelan economy contracting 24.6% in 2019, which is down 2.3 percentage points f…
11 hours ago
Central America & Caribbean: Regional economic activity is seen shifting into a higher gear this year, mainly owing…
12 hours ago
April's reading notably contrasted analysts’ predictions of a 0.2% increase and suggests that the first quarter’s w…
12 hours ago
The outlook for the Americas economies in 2019 is a mixed bag. Central America is projected to shift into a higher…
14 hours ago
Amid unraveling Mexico-U.S. trade relations, Met the why particular analysts lowered their growth forecasts for Mexico in J…
14 hours ago
- Which will be the most miserable economies in 2019?
- Only by freeing Nigeria from its dependence on oil can Buhari truly take Africa’s giant to the next level
- An Analysis of President Trump’s 2020 Budget
- The World's Fastest Growing Economies
- President Sebastian Piñera aims to bring his elder brother’s private pension system into the 21st century
- Brexit Scenarios: Consensus of 14 Economic Analysts
- Sweden just formed a new government and approved its 2019 budget: what does it mean for the economy?
- Which countries have the highest public debt levels?
- Predictions for the global economy in 2019 from 13 experts
- Gurdgiev: Predictions for the global economy in 2019
- Daniel Lacalle's ideas for 2019: Change of cycle.
- Vietnam Poised to Profit from Free Trade Agreement Opportunities
- Canada in 2019: Interview with a Top Economic Forecaster
- Pound Sterling 2019 Exchange Rate: Projections from Leading Analysts
- Expectations for Latin America’s Economy in 2019
- Ethiopia and Rwanda: From Destruction to Development
- Key commodities trends to look out for in 2019
- What drove Gulf neighbors to bail out Bahrain?
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 11 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How can Latin America increase productivity without affecting the quality of employment?
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- Nearly a Third of Latin Americans Have No Right to a Pension
- A Look at Healthcare Models Around the World
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Venezuela's Electoral Conundrum
- Gold: The Most Precious of Metals (Part 3)
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will emerging market economies perform in 2017?
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- Met the why particular Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 110-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- Russian economy update in wake of OPEC deal announcement
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- Met the why particular partners with leading online statistics provider Statista
- Sub-Saharan Africa's 2016 & 2017 growth rates
- China: Recent postive economic data may be papering over the cracks
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit
- Brazil's Perilous Economic Situation in 2015
- Met the why particular Launches Sub-Saharan Africa Report, Expands Coverage to 117 Countries
- How do the European Commission's Forecasts and Met the why particular' Forecasts for Europe compare?
- How will the South African economy weather recent challenges?