The US, EU and Asian economies have shown an improving growth outlook in recent months that should carry into 2014. It hasbeen a positive development for financial markets to see downside growth risks and volatility receding. Australia’s major tradingpartners look set to have 2014 growth just below their decade average of 4%pa. The Eurozone economic recovery hasstabilised, with a second consecutive quarter of modest growth in Q3. China’s monthly indicators show a shift to firmer growthinto 2014. The US economy looks set to grow at a modest pace, even with its ongoing fiscal headwinds. Our world GDPestimate, using the global PMIs and industrial output, supports a return to near trend 3.4% growth in 2014 from an expected2.8% in 2013. Trend growth, of 3.6%, is forecast for 2015, provided that China can achieve an outcome above 7.5%.
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Commonwealth Bank