The past year has been tumultuous for Latin American politics, characterised by a shift to the right in election results and away from populism in policy, and numerous corruption scandals. Current risk levels are likely to linger in the coming year.

We expect that UK’s vote to leave the EU will negatively affect economic growth in the eurozone. We believe that the impact in 2016 is rather small, but we lower our growth forecast for 2017 for both the eurozone and the Netherlands by ¼%-point.

European growth is expected to remain subdued in the coming years, due to fading tailwind gains and structural weakness. Negative risk to the outlook have risen; the refugee crisis and a Brexit being the most prominent ones.

The success of anti-establishmentcandidate statistically explained by stagnant median wages and declining manufacturing employment. When these trends persist, Trump and his successors are here to stay.

Italian banking shares dropped 30% in the first months of 2016. Policy makers have recently taken measures to revive the banking sector, but also to improve governability of the country. Measures will be partly effective in reviving the economy.