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US policies critical to 2017 global economic prospects

Participants in the the World Economic Forum tell Euronews what Donald Trump does is critical for the US and the, by extension, the global economy.

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US policies critical to 2017 global economic prospects

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WITH DAVOS REPORTING BY SARAH CHAPPELL

Point of view

If we have protectionist populism, that could be a disaster for the US, China and many parts of the world

Nariman Behravesh Chief Economist, IHS Consulting

“Too slow for too long” was the International Monetary Fund’s verdict on the global economy in mid-2016.

Modest gains in both advanced economies and emerging markets have kept growth at around three percent for several years.

Euronews business correspondent Sarah Chappell reports from the World Economic Forum in Davos: “There is hope that 2017 will be the year th at the global economy comes out of the doldrums and also an understanding that policy making in the United States will be critical.”

The new man in the White House Donald Trump has vowed to cut taxes and slash regulation.

Jeff Schumacher, CEO of investment firm BCG Digital Ventures, says he’s not a fan of some of Trump’s principles, but he is optimistic about what the new presidency is likely to mean for business.

Schumacher told Euronews: “He could end up being the entrepreneur’s entrepreneur and create a lot of growth in the US. If you see corporate tax getting reduced and less regulation, I think you’ll see a lot of capital flow into the US. That kind of capital flow and that kind of growth then the US, just by the size of its market and the size of its economy, will bring the global economy with it.”

But just as the US can be the engine for global growth, it could also put the brakes on it.

And some of Donald Trump’s protectionist rhetoric – if put into action – could spell serious trouble, as Nariman Behravesh, Chief Economist at IHS Consulting, explained: “If we have pro-growth populism it’s great – which we think is really what’s going to happen in the end, that’s more likely. But if we have protectionist populism, that could be a disaster for the US, China and many parts of the world. That’s a recession scenario.”

So 2017 looks certain to be a year of major policy changes in the US with knock-on effects around the globe.