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Charting Global GDP Growth: Is Record‑Low Volatility Concealing Risks?

A stable but insecure global economy leaves no room for complacency.


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The past four years have been among the least volatile ever recorded for growth in the 20 major world economies, coinciding with years of accommodative central bank policy. However, as central banks prepare to reduce their extraordinary support, the modest GDP growth we expect globally in 2017 would leave scant cushion to absorb economic setbacks and adjust to the reduction in support.

With optimism largely priced into many markets and the global economy facing significant policy pivots, we think investors should focus on capital preservation and seek active management insights to help guard and grow their capital, by aiming to avoid overvalued sectors and harnessing opportunities when volatility inevitably arises.
The Author

Tony Crescenzi

Portfolio Manager, Market Strategist

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Disclosures

This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2017, PIMCO.