It’s looking like boom time in the world economy again.
As more economists publish their 2018 outlooks, those from Goldman Sachs Group Inc. and Barclays Plc are proving the most bullish in predicting global growth will reach 4 percent next year. That would be the strongest since 2011 and up from the 3.7 percent that Goldman Sachs estimates for this year.
“The ongoing economic expansion has substantial momentum,’’ Barclays economists Ajay Rajadhyaksha and Michael Gavin wrote in a Nov. 16 report. “It is not overly reliant on any single geographical region, industry, or source of demand. It does not seem to have generated economic or financial excesses that pose an immediate threat.’’
At Goldman Sachs, economists led by Jan Hatzius suggest the outlook is as “good as it gets” after a year in which growth in the Group of Seven economies is poised to beat that projected by the Bloomberg survey of forecasters for the first time since 2010. Most major economies are even running ahead of their pre-financial crisis average, Hatzius’s team said in a Nov. 5 report.
Despite the acceleration in growth, few economists see a surge in inflation, preferring instead to predict a gradual acceleration in price pressures that would be welcomed by central bankers. Goldman Sachs is more aggressive than most in forecasting the Federal Reserve will raise its key interest rate four times next year.
Here’s what other major banks are saying about the world economic outlook and their forecasts for global growth in 2018:
JPMorgan Chase & Co. (3.7 percent)
“A traditional global business cycle dynamic is taking hold. A positive feedback loop linking growth to supportive financial conditions and rising sentiment provide fuel for a second year of synchronized above-trend global growth in 2018. Alongside strong growth, we expect inflation will rise and central bank normalization will gather steam.’’
Morgan Stanley (3.7 percent)
“The global recovery is likely to gain momentum and breadth in 2018, supported by still accommodative monetary policy and more fiscal stimulus. With major economies at different stages of the business cycle, the risk of the global economy running too hot is limited though.’’