##ing at growth rates above 6 %, emerging economies real gdp is projected to be expanding roughly near to 4. 6 % in 2017 from 4. 3 % in 2016 and to 4. 9 % in 2018. 2 / 8 bis central bankers'speeches 4. potential risks ahead among the major downside risks i would like to focus on the so - called “ trade risk ”, namely how a shift towards protectionism driven mainly by the new us administration could disrupt global supply chains reducing trade and cross - border investment flows harming global growth. the decision to pull the us out of the trans - pacific partnership and threats to leave nafta are signs of a fierce protectionist stance by one of the world ’ s major trading blocks that could have a destabilising effect on the wto and world trade relations in general. at his speech before the united nations general assembly last september, us president trump repeatedly argued in favour of “ strong sovereign nations ”, attacking globalism and putting allegiance to the national state ahead of international institutions. the chinese and us policy appear to converge in this regard against a “ one - size - fits - all universal order ”. this stance also finds followers among the lines of “ international nationalists ” or anti - globalists also include leaders such as vladimir putin, viktor orban in hungary or duterte in the philippines. the argument goes that strong sovereign nations should be the basis of a stable, international order that cuts back on the excesses of globalism, which is seen as elitist. another risk that is not so probable, one that i would like to take a moment to mention nonetheless : a bad revival of reaganomics of the 1980s, for which i will simply remind you that during president reagan ’ s first administration, loose fiscal policy collided with a tight monetary stance by the fed under chairman paul volcker, in an effort to squeeze inflation out. this combination resulted in a seriously overvalued dollar, which for many analysts is the primary cause that sunk a large number of latin american economies into a decade of stagnation. underlying vulnerabilities remain for some large emerging markets still today. high corporate debt, weak balance sheets and thin policy buffers mean that these economies are exposed to tighter global financial conditions and capital flow reversals. a closer look at the numbers may provide some reason to be slightly apprehensive : today we are experiencing a stronger dollar than in the strong dollar period of the eighties. indeed, the us dollar ’

solid economic expansion. indeed, gdp has risen for 18 straight quarters. the increase in growth in 2017 mostly reflects acceleration in exports in the context of the broader pickup in global trade and continued strength in domestic demand growth supported by accommodative financial conditions amid diminished political risk and policy uncertainty. overall, growth is expected to average 2. 2 % in 2017 to the highest level since 2007. the positive momentum will continue going forward mainly because the drivers of growth are increasingly endogenous, rather than exogenous, which used to be falling oil prices and accommodative monetary policy. now, there are indicators that growth is “ feeding on itself ”, that is, spending multipliers and endogenous propagation are once again supporting economic activity. this is most evident in private consumption, which has remained robust even 1 / 8 bis central bankers'speeches as oil prices have risen by about 30 dollars since the start of 2016. consumption is being supported by a virtuous circle between rising labour income and rising employment. employment in the euro area has reached its highest level ever, while unemployment has fallen to its lowest rate since january 2009. as consumption has strengthened and spending multipliers have taken hold, investment has also followed with a lag. since 2016, investment has contributed almost 45 % to annual gdp growth, compared with under 30 % in the two years previously. however, inflation developments across the euro area still remain subdued. indeed, annual hicp inflation decelerated to 1. 4 % in october 2017, down from 1. 5 % in september, while core inflation fell to 0. 9 % in october from 1. 1 % in september. two indicators are important for assessing the durability of inflation. the first is the outlook for growth, since this helps us assess whether inflation will continue to rise. the second is underlying inflation. this assesses whether inflation will stabilise around the ecb ’ s target of 2 % once the effects of volatile factors, such as oil and food price swings fade away. as i already mentioned, the growth outlook is now solidly improved ( 1. 8 % in 2018 ), but the underlying inflation trend remains subdued. a key issue here is wage growth. since the trough in mid - 2016, growth in compensation per employee has risen, recovering around half of the gap towards its historical average. but overall trends still remain subdued and are not broad - based mainly because the effects of past low inflation are continuing to weigh