Fidelity: Secular Outlook for Global Growth: 2017–2036

Fidelity: Secular Outlook for Global Growth: 2017–2036

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Secular Outlook for Global Growth: 2017–2036

Slower growth is expected to result in a lower-than-historical-average interest-rate climate and be less of a tailwind to equities.

by Irina Tytell, PhD | Senior Research Analyst, Asset Allocation Research,
Lisa Emsbo-Mattingly | Director of Asset Allocation Research,
Dirk Hofschire, CFA | Senior Vice President, Asset Allocation Research

Key Takeaways

• With the economy providing the backdrop for asset markets, our secular gross domestic product (GDP) growth forecasts are the foundation for developing long-term capital market assumptions.

• Our forward-looking, global approach emphasizes the key components of GDP growth—population and productivity—and calculates the critical drivers that have been most predictive.

• Over the next 20 years, global growth is expected to be somewhat slower, primarily due to deteriorating demographics in most countries, with developing economies likely to register the highest growth rates.

• Peaking globalization trends and rising anti-globalization political pressures could affect the outlook, with potentially negative impact on growth via more restricted trade flows and immigration policies.

• Slower world growth would lead to low-er-than-historical-average interest rates and provide less of a boost to equity returns than in recent decades.

 

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