The recovery in global activity remains intact while inflation appears to have peaked following the stabilisation in energy costs. We continue to forecast global growth at 3.0% this year after 2.6% in 2016, but have trimmed our inflation forecast to 2.3% from 2.4%. The combination of steady growth and low inflation means we remain in a goldilocks environment where activity is neither too hot nor too cold to cause a significant acceleration in inflation.
On the growth side, the US forecast is unchanged for 2017 while an upgrade to the Eurozone is accompanied by a stronger forecast for China and the wider emerging markets. In this respect, Europe is picking up the baton from a cooling US. On inflation we have reduced our forecasts across the board to reflect a lower oil price profile and subdued core readings. Looking into 2018, global growth is expected to remain stable at 3% with modest downgrades to the US, offset by upgrades to the Eurozone and emerging markets.
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