Nominal GDP growth in advanced economies has picked up over the past twelve months or so and is likely to remain fairly rapid during the coming two years. This should help households, firms and governments cut their debt burdens, and this in turn will reduce the risk of debt deflation. The recovery in both real GDP growth and inflation means that output in advanced economies expanded by 4% in nominal, annualised terms in Q4 2016. As the chart shows, this is well above its average pace in recent years, although it still falls short of pre-crisis rates. And we expect nominal GDP growth to be faster during 2017-2018 than it was last year in most of the major advanced economies. ooking further ahead, nominal GDP growth should continue to be higher than it was in the immediate post-crisis years. With few exceptions, such as Japan and perhaps Italy, this should help to keep debt burdens under control.
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