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GLOBAL ECONOMY
Alan Levenson
Chief U.S. Economist
November 17, 2016
2017 Global Market Outlook Press Briefing

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2
48
50
52
54
56
58
2011 2012 2013 2014 2015 2016
NetPercentIncreasing
MANUFACTURING AND SERVICES
Manufacturing
Services
Global Purchasing Managers’ Indexes
As of September 30, 2016
Past performance cannot guarantee future results.
Sources: IHS Markit, J.P. Morgan, and Haver Analytics.
Global Growth Quickened at Midyear…
48
50
52
54
56
58
2011 2012 2013 2014 2015 2016
NetPercentIncreasing
REGIONAL TRENDS
Global
Developed Market (DM) Economies
Emerging Market (EM)/Developing Economies
Composite Purchasing Managers’ Indexes

3.
3
…But Postcrisis Headwinds Could Limit
the Recovery
0
1
2
3
4
5
6
7
8
9
2004‒2007 2012‒2015 2016 2017 E 2018‒2020 E
AnnualPercentChange
REAL GROSS DOMESTIC PRODUCT (GDP)
World GDP
Developed Market (DM) Economies
Emerging Market (EM)/Developing Economies
As of October 4, 2016
Sources: International Monetary Fund October 2016 World Economic Outlook Database and Haver Analytics.

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4
U.S. Expansion Has Room to Run;
Near-Term Recession Risk Low
As of August 31, 2016
Sources: Federal Reserve Board, National Bureau for Economic Research, U.S. Government Statistical Agencies, Haver Analytics, and T. Rowe Price.
0
1
1
2
3
4
5
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Discrete Cycle Stage
Continuous Inter-Cycle Distance Measure
RecessionEarlyMid-Late
U.S. EXPANSION IN TRANSITION FROM MID-STAGE TO LATE STAGE

5.
5
As of March 31, 2016
Sources: Bank for International Settlements, Haver Analytics, and T. Rowe Price.
Rolling Deleveraging Cycles
60
70
80
90
100
110
120
130
140
150
145
150
155
160
165
170
175
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
PercentofGDP
PercentofGDP
DEBT OF PRIVATE NONFINANCIAL SECTORS
Developed Market (DM) Economies (Left Axis)
Emerging Market (EM)/Developing Economies (Right Axis)
EM ex China (Right Axis)

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6
As of March 31, 2016
Sources: Bank for International Settlements, Haver Analytics, and T. Rowe Price.
Deleveraging Details: Private
Nonfinancial Sectors
130
140
150
160
170
180
190
200
210
220
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
PercentofGDP
WITHIN DM, DIVERGENT
DELEVERAGING TRENDS
U.S.
Euro Area
UK
Rest of DM ex Japan
0
25
50
75
100
125
150
175
200
225
China
SouthKorea
Chile
Malaysia
Thailand
Turkey
Brazil
PercentofGDP
CHINA NOT ALONE AMONG EM
WITH POSTCRISIS DEBT SURGE
Debt Stock
32-Quarter Change

7.
7
0
2
4
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016
PercentChange,YearAgo
EM DISINFLATION BROADENS AS
CURRENCIES STABILIZE
EM/Developing Economies
Asia
Latin America
Central and Eastern Europe
Commonwealth of Independent States
Consumer Price Index
As of August 31, 2016
PCE: Personal Consumption Expenditures Price Index. CPI: Consumer Price Index.
Sources: International Monetary Fund, National Statistical Agencies, and Haver Analytics.
Global Inflation: Emerging Markets
Following Developed Markets Lower
-2
-1
0
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 2015 2016
PercentChange,YearAgo
DM INFLATION: BROADLY BELOW
CENTRAL BANK TARGETS
U.S. (PCE)
Euro Area (CPI)
Japan (CPI)
UK (CPI)
Canada (CPI)
Core Consumer Inflation

8.
8
As of August 31, 2016
Sources: National Central Banks and Statistical Agencies, and Haver Analytics.
Monetary Policy
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Australia Canada Euro Area Israel New Zealand Norway Sweden Switzerland United
Kingdom
United States
DM REAL POLICY RATES: RUN OUT OF ROAD
All Items CPI
Core CPI

9.
9
As of August 31, 2016
Sources: National Central Banks and Statistical Agencies, and Haver Analytics. Details available on request.
Monetary Policy
-2%
0%
2%
4%
6%
8%
EM REAL POLICY RATES: EASING OPPORTUNITIES
All Items CPI
Core CPI

10.
10
As of October 4, 2016
Sources: International Monetary Fund October 2016 World Economic Outlook Database, Haver Analytics, and T. Rowe Price.
Fiscal Expansion in 2017?
More Wish Than Forecast
-2
-1
0
1
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
StructuralBudgetBalance,PercentofPotentialGDP
GENERAL GOVT. STRUCTURAL BUDGET BALANCES
Countries weighted by nominal GDP shares
Developed Market (DM) Economies
Emerging Market (EM)/Developing Economies
World

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Politics
 ITALY: Constitutional referendum, December 4, 2016
 U.S.: Continuing budget resolution expires December 9, 2016;
debt limit reinstated March 16, 2017
 FRANCE: National elections, April‒May 2017
 GERMANY: Federal elections, September 2017
 CHINA: Communist Party Congress, autumn 2017
As of October 28, 2016

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Global Outlook Summary
As of October 28, 2016
 Growth improving in second half of 2016 as impact of commodity
price plunge fades
 Slight improvement in 2017 on rebound in U.S., Canada, Brazil,
and Russia, but deleveraging and restructuring headwinds persist,
particularly in EM
 Relative stability in currencies after 2014‒2015 rout fosters
disinflation in EM, contributes to modest U.S. inflation lift
 Fed normalization creep to continue, while European Central
Bank (ECB) and Bank of Japan (BoJ) rethink quantitative
easing (QE); EM central bank outlooks mixed, though easing
predominates as inflation falls

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