The global economy is booming, but not for everyone
Optimism about the future path of the global economy is at record levels among the chief executives of the world’s largest companies, according to PricewaterhouseCoopers (PwC).
Its 2018 survey of the world’s business elite found a large majority of chief executives believe global economic growth will “improve” over the next year. In fact, the number of chief executives expressing confidence in the prospects for global growth has doubled compared with a year ago.
It doesn’t matter which part of the world those chief executives came from. Almost all gave the same response: Sentiment is positive, confidence has made a comeback, the global economy is booming and it will continue to do so throughout 2018 and probably into 2019.
Meanwhile, the International Monetary Fund’s (IMF) has upped its global growth forecasts for 2018 and 2019 by 0.2 per cent to 3.9 per cent, although the UK saw its own economic growth forecast downgraded.
So, everything is great. Well yes and no. There are still risks on the horizon. President Trump remains an unpredictable character and his America First policy hardly suggests he is a fan of global free trade.
Meanwhile, the British government remains intent on leaving the largest free trade market in the world because – so Hard Brexiteers would have us believe – the European Union impedes Britain’s ability to trade freely with the rest of the world.
Separately on Monday, Oxfam published research that suggested too few people are likely to benefit from the global economic boom.
The charity suggested 82 per cent of money generated last year went to the richest 1 per cent of the global population, while the poorest half saw no change in their circumstances.
Oxfam came under attack for pointing this out pretty quickly by self-styled defenders of capitalism and free trade.
Whether you agree with Oxfam or not, if more people do not feel the benefits of globalisation we will see more political unrest and an increasing erosion of trust in institutions.
Worryingly, research from US consultancy firm Edelman released on Tuesday showed exactly that. It’s annual Trust Barometer showed faith in four key institutions — business, government, Non-Governmental Organisations (NGOS), and the media — has declined broadly around the world, a phenomenon not seen since the annual survey launched six years ago.
Global trade needs to benefit all, not just a small elite. If it doesn’t, eventually, people will revolt. Having bailed out the banks after the financial crisis the public expected wealth to be shared more equally. It hasn’t been.
This current economic boom is an opportunity to redress some of the global wealth imbalance. Yet President Trump’s America First policies suggest it could be an opportunity that is missed.
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