Less fiscal drag in the U.S., a return to modest growth in Europe, and a stabilizing Chinese growth rate all point to a notable pick-up in global GDP in 2014, which should also give a small boost to Canada’s outlook, says Douglas Porter, chief economist at BMO. In the article ‘Global Economic Outlook 2014: Brave Old World,’ he says 2013 saw major equity markets thrive even as the global economy and many other financial markets muddled through another sub-par year. Those roles may reverse in 2014 as conditions appear to be falling neatly into place for a marked improvement in global growth in the year ahead, with the U.S. in the lead. U.S. GDP growth is expected to find a higher gear in 2014, accelerating from 1.9 per cent last year to 2.9 per cent. European economic growth is also expected to improve. After two years of recession, the Eurozone has returned to growth and is putting the worst of its crisis into the rear-view mirror. For financial markets, 2014 may prove to be more challenging with the Fed tapering, bond yields expected to rise another 50 to 75 bps, and stocks having skated through the past two years without a full-blown correction.
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