Global economic growth improved in the final quarter of 2016 and is expected to pick up pace throughout 2017, according to NAB.
In a note to investors, NAB group chief economist Alan Oster said the outlook for growth was currently “looking brighter”, based on increases seen in major equity markets, bond yields and commodity prices.
Central bank policy settings are also supportive of a higher growth outlook, with the US Federal Reserve last week raising the funds rate for the second time this year, the Bank of England looking unlikely to expand its asset purchase program and the European Central Bank beginning to cut its asset purchase program, Mr Oster said.
“After settling around 3 per cent year-on-year through the first three quarters of 2016, global growth picked up to 3.2 per cent year-on-year in December, mainly because of an upturn in growth in the big advanced economies,” he said.
“The acceleration in growth across the big advanced economies has also been evident in the monthly measures of trade and industry.”
Mr Oster said the pace of growth was also likely quicken over the next two years, from 3 per cent in 2016 to 3.3 per cent in 2017 and 3.5 per cent in 2018.
“Rather than either an overly early tightening in economic policy or pressures in the financial system, the most obvious risk to our forecast comes from major political and policy change,” he said.
“We are still awaiting the details on the policies of the Trump administration, while the eurozone faces a series of elections this year.”