Kenneth Rogoff: global growth will exceed expectations

published 28 April 2017

"Despite a populist-propelled wave of political tumult, global growth is actually set to outperform expectations in 2017," says Kenneth Rogoff, professor of economics at Harvard University. The "deep prolonged recession" and slow recovery after the financial crisis have sown the seeds of "a sustained period of more solid growth".

Nonetheless, "many problems remain". These include "weak banks in Europe, overleveraged local governments in China, and needlessly complicated financial regulation in the United States". There is a risk that "a populist turn in upcoming elections in either France or Italy could still tear apart the European Union, causing massive collateral damage to the rest of the world".

While Marine Le Pen trails in second-round polls, "the unpredictability of an angry electorate, and Russia's proven capacity to manipulate news and social media", means that "it would be folly to think that Macron is a lock".

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The political situation "is even worse" in Italy, where "populist candidate Beppe Grillo is leading polls and is expected to pull in about a third of the popular vote". Even if more moderate candidates win, "it is also hard to know the way forward for Italy, where per capita income has actually fallen slightly during the euro era".

Meanwhile, "many emerging-market countries are dealing with populists of their own, or in the case of Hungary, and Turkey, with populists who have already turned into autocrats". Overall, while "the outlook for global growth is improving", this scenario depends on "sensible policies", while "populism remains a wildcard, and only if growth picks up fast enough is it likely to be kept out of play".

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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