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Nigeria Strategy Report H2 2017 Excerpts - Global Economy on Broad Based Recovery

• ​​Over the next few weeks, we will feature excerpts from our core strategy document – The Nigeria Strategy Report. The report communicates our understanding on key happenings in global and domestic financial markets over H1 2017 and provides our insight on what we believe will be the major themes underpinning investor sentiment for the rest of the year. We begin the series with a look at the major themes that dominated the global economic and financial landscape in H1 2017 as well as our outlook on same for the rest of the year.

• The global economy maintained its steady recovery, printing at a seven-quarter peak of 2.7% YoY in Q1 17, according to World Bank’s estimate. The upbeat economic picture was bolstered by accommodative monetary policies across most developed markets which buoyed output in the group (+2% YoY) despite lingering political worries. Growth across emerging and developing countries (+4% YoY) rose even faster, buoyed by pickup in global commodity prices. Against this backdrop as well as the better-than-expected election outcome across Europe, where populist candidates had threatened to pull their countries out of the Eurozone, global financial markets sustained their positive trend by gaining over the first half of 2017(MSCI World Index: +9.4%).​

• Over the rest of the year, economic conditions across the globe should remain upbeat with both the IMF and the World bank forecasting a 30bps YoY expansion in 2017 global growth. The sanguine projection reflects expectation for sustained recovery across the developed world (+20bps to 1.9%) and improvement in economic activities across emerging and developing markets (+60bps YoY to 4.1%). In the developed region, support should come from sustained momentum in US economy as well as export-induced growth in Japan. While in Europe, the concerns over Brexit negotiations should remain a drag on output, waning political worries, sustained monetary easing and improved labour data are expected to sustain growth in domestic demand, exports, and private investment.