This year has brought disturbing developments that have left many of us worried about what 2017 might have in store. Brexit; the election of unconventional leaders such as Donald Trump and Rodrigo Duterte; a China flexing its muscles; wild swings in equity prices, currencies and bond yields; corruption scandals of various kinds; and the horrors of war in Aleppo and elsewhere have all taken their toll on us. But, as we say good riddance to the year that is ending soon, we should also take stock of all the forces that will shape the coming year, good as well as bad. And, when we do that, the prospects actually appear quite promising.

The main reason to feel upbeat about next year is that the global economy is set to gain more momentum while fears of deflation will ebb. New technologies will start impacting our lives positively. Yes, there will be many things that could go wrong. We do not know exactly how President-elect Trump will conduct the affairs of state, for one. And, for another, while we think China’s leaders are likely to do enough to keep China on a stable growth track, the reality is that no one fully understands the challenges in that economy. But the larger point we must bear in mind is that most of the countries in this region have enough resilience to absorb a few shocks and will still come through in good condition.

Global economy: normalising after years of crises
This resilience will be all the greater if the global economy turns around. In fact, the forward- looking indicators for the world economy are finally looking more promising. The lead indicators of the Organisation for Economic Co-operation and Development — which have been reasonably accurate — show the big three economies of the US, Europe and Japan returning to trend growth rates. A separate measure of new business being received by companies across the world shows a clear pickup. Digging deeper into the data, we see underlying forces which are promising for economic growth.

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