President Trump’s trade and other policies might cause turbulence over the next few years, but they are unlikely to derail the megatrends which will shape the global economy in the long run. We still expect AI to drive a revival in productivity growth among advanced economies and the US seems in the strongest position to benefit. Technological progress in China will not prevent a major slowdown as demographics worsen, geopolitical tensions intensify, and high investment rates become harder to sustain. While there is a risk that the US will adopt a damaging isolationist stance, we still find it most likely that the world will fracture into US and China-led blocs in future. In that case, some economic links will be strengthened while others are severed and we would expect the economies of South East Asia to benefit most from re-worked trade flows.
Drop-in: We will be hosting an online briefing about the Long Run Economic Outlook and answering your questions on Tuesday 11th March at 15.00 GMT. Register here.
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