Macro insights

What happened at the 2018 World Economic Forum?

The 2018 World Economic Forum in Davos, Switzerland got off to an upbeat start this year. On Monday 22 January - the first day of the five-day conference - the International Monetary Fund announced that it had upgraded its global growth forecast.

On the back of increased momentum, the crisis lender now expects growth of 3.9% in both 2018 and 2019, up 0.2% from its previous estimates.

The IMF pointed out that the world was witnessing the broadest synchronised growth surge since 2010, highlighting in particular the improvement seen in both Europe and Asia.

However, while it was positive on the short term outlook, it was more circumspect over the medium term. The increase in growth, when married to the loose monetary policy conditions that largely remain in place, could be mutually reinforcing, it said. On the downside, it added that valuations are already high which raises the possibility of correction and that high levels of inequality continue to persist. This latter point was underlined by a new report by Oxfam International that showed that the global economy minted a new billionaire every two days of the past year.

A similar blend of tentative optimism ran through the annual meet up of heads of state, company executives, economists and celebrities of all stripes whose stated aim is to “improve the state of the world”.

US President Donald Trump and what he might say during his speech on the final day of the conference dominated many conversations in the intervening days. The first US president to attend the conference since Bill Clinton’s appearance in 2000, Trump reiterated his America First talking points, calling for an international system of trade that was both fair and reciprocal.

Like the rest of the world, Davos was not immune to bitcoin fever. According to reports, there were more than a few cryptocurrency evangelists at the event and there were many conversations about the potential of the block chain technology underpinning it. Although bitcoin wasn’t the only reason that technology was in the spotlight – public trust in big tech was also being questioned. In sessions such as In technology we trust? questions about the power of big data and the responsibility of the companies that control it were interrogated.

The groundswell of stories and incidents that have given rise to the #metoo movement was the other key talking point at the conference. Gender Power and Stemming Sexual Harassment was on the agenda, but, while there was a clear recognition that some things have changed for the better, notably for the very first time, the seven co-chairs of the event were all women.

This document is for professional clients only and must not be circulated or distributed to retail clients.

This communication does not constitute an offer to buy or sell any AXA Investment Managers group of companies’ (‘the Group’) product or service and should not be regarded as a solicitation, invitation or recommendation to enter into any investment transaction or any other form of planning. It is provided to you for information purposes only. The views expressed do not constitute investment advice, do not necessarily represent the views of any company within the Group and may be subject to change without notice. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein.

Issued by AXA Investment Managers UK Ltd registered in England No. 0143 1068. The registered office address is 7 Newgate Street London EC1A7NX. AXA Investment Managers UK Ltd (119368) is authorised and regulated by the Financial Conduct Authority under the account shown. Telephone calls may be recorded for quality assurance purposes. 21178 01/2018