Donald Trump’s policies are likely to deliver a “sugar rush” to the global economy but the protectionist approach he endorses risks causing greater longer-term pain, prominent economists attending the World Economic Forum in Davos this week will tell delegates.
Financial markets across the world have risen sharply since the US election result, on hopes that the president-elect’s planned fiscal stimulus — made up of tax cuts and infrastructure spending — will deliver higher growth.
The economists contacted by the Financial Times, including three Nobel Prize winners, generally concur that Mr Trump’s plans will initially be positive for the economy. Many argue the uplift for global growth will be higher than expected by the International Monetary Fund, which forecast yesterday that the world economy would pick up in 2017 and 2018 after a trough last year.