The global economy is on its way out of recession, QNB Group said on its weekly economic analysis, noting that the trend of growth in 2016 has important implications for 2017. 
Growth in advanced economies finally seems to have momentum after years of support from ultra-loose monetary policy, QNB weekly financial analysis stressed, adding that the era of deflationary dominance appears to be ending and early survey indicators for Q1 2017 point to growth and inflation strengthening across advanced economies. 
Emerging market growth, on the other hand, is likely to remain fragile, said the report, noting that EM growth will at least benefit from higher commodity prices, greater confidence of an orderly China slowdown and a rebound following India’s demonetisation. All in all, it appears global growth may well be out of the doldrums. 
2016 was an eventful year. China kicked off the year with a devaluation of the yuan, then British and American voters defied expectations, OPEC agreed to its first supply cut in eight years and India demonetised nearly 90.0% of its currency in circulation, the analysis explained. 
Now that most countries have released Q4 2016 GDP numbers, growth faltered to 3.1% in 2016 from 3.4% in 2015, marking the slowest pace of growth since the global financial crisis. But this masks an acceleration in growth towards the end of year. The final quarter of 2016 showed the first quarterly pickup in global growth in two years and was led by both advanced economies and emerging markets (EMs). 
The bottom line is that while overall growth slipped in 2016, strong momentum from the second half, particularly from advanced economies, bodes well for growth in 2017. 
In advanced economies, the growth story reflects a strong cyclical upturn after weak first half growth primarily in the US and Japan. In the US, capital expenditure cuts in the energy sector, a sharper-than-expected inventory drawdown and the drag of a stronger dollar on exports explained the depressed first half growth.

Source: QNA