HSBC’s chief global economist, Janet Henry, considers what the economic landscape looks like a decade after the global financial crisis.
All things considered, Ms Henry is positive about 2018, saying: “On our forecasts, it is expected to be the second year of the strongest global growth since the immediate post-crisis bounce of 2010.
“This is excellent news as far as it goes, but in fact the legacy of the crisis persists in many ways — in the form of continued monetary stimulus virtually everywhere, in the exuberance of property and financial markets (a direct consequence of quantitative easing), in the rise of income inequality and the growth of populism.
“Most of the remaining challenges facing the global economy cannot be addressed by monetary policy. Future growth potential and the risk of a shift to more political extremes will depend on incumbent governments’ ability to address one of the most pressing political issues: how to ensure that the benefits of growth are widely shared and that income inequality within their countries is reduced. In other words, how to deliver more inclusive growth.
“The need for inclusive growth is not just about ‘fairness’ and maintaining social cohesion. Curbing the harmful macroeconomic impact from a lack of inclusion — both in terms of the pace and sustainability of growth — is a medium-term challenge for governments that cannot be addressed solely by redistribution.”