US and China key growth drivers of global economy in 2017

The growth of the US and Chinese economies, along with rising corporate earnings, were seen as the key drivers of the global economy in 2017, according to PWM's Global Asset Tracker (see Fig 1).

“China and the US are the two world's growth engines, in terms of policy initiatives,” says Didier Duret, CIO at ABN Amro Private Banking.

The US should remain the fastest-growing economy in the developed world, while the eurozone will register again above-potential gross domestic product, predicts Alan Mudie, head of strategy at Société Générale Private Banking. “While emerging market economies will be hit by fears of rising protectionism, we believe that healthy domestic demand will help mitigate that risk." 

Market returns will hinge on improved growth/inflation outlook, according to Katie Nixon, CIO, Wealth Management at Northern Trust, which should manifest in better earnings. “Fundamentals will drive equity returns, not multiple expansion, in 2017," she adds. 

Meanwhile, a bursting credit bubble in China is seen as a key risk by Enio Shinohara, head of portfolio solutions at BTG Pactual, pointing to elections that will be held by the Communist Party in October.

PWM's annual Global Asset Tracker survey is based on interviews with chief investment officers, heads of asset allocation and chief investment strategists of 38 selected, mainly global and regional, private banks. Together they manage more than $7.8tn in client assets globally. For the full results click here.