It’s a big week for the world and there is no place to hide any more

The IMF is happy that the upturn in activity is coming to pass, based on a strong momentum in a number of important economies.

The global economy is projected to have grown by 3.1% in 2016, but the growth rate is expected to increase to 3.4% in 2017 and 3.6% in 2018.

That’s not exactly what anyone would call stellar growth, but it would represent a marked improvement on recent years. The US, China, Japan, and Europe all offer better prospects than previously thought. However, the IMF points to a high level of uncertainty about the outlook.

The key risk is that Mr Trump could provide too much fiscal stimulus, causing capacity constraints and greater inflationary pressures, resulting in higher interest rates, which leads to a stronger dollar and a widening of the US balance of payments deficit.

In turn, this could ignite trade tensions and a push towards protectionism.

Geopolitical tensions and a severe downturn in China are also highlighted as risk factors.

The concerns about protectionism are particularly relevant this week.

At Davos, Chinese president Xi Jinping waxed lyrically about the benefits of free trade and globalisation. He described the pursuit of protectionist policies as akin to “locking oneself in a dark room”.

During his election campaign, Mr Trump was quite scathing of free trade and globalisation. He threatened all sorts of trade barriers, particularly against China.

The relationship between the US and China will be fascinating to watch as both struggle for global dominance. I suspect Mr Trump will back down from his protectionist rhetoric, but time will tell.

It is also interesting that, in a week when the protectionist Mr Trump assumes office, his opposite number in the UK was also waxing lyrical about the benefits of free trade.

British prime minister Theresa May is quite clear he country will leave the EU. She is also quite clear in her desire to create a new and equal partnership between the UK and the EU.

She ruled out the possibility of partial ‘half-in, half-out’ membership of the EU.

She does not want the type of model adopted by other countries, presumably meaning countries such as Norway and Switzerland, who have access to the single European market, but at a price.

She is adamant the UK will not be part of the single European market but will strike a trade deal with the EU.

She does not envisage the UK will remain a full member of the European customs union, as this would mean adopting the EU’s external tariffs, and would prevent the UK from being able to independently negotiate a trade deal with non-EU countries.

However, Ms May is up for doing trade deals, with all and sundry.

It is important to remember that much of what she wants could well be at odds with the objectives of the EU. The period of negotiation will be difficult and compromises will have to be made.

But, from an Irish perspective, it has to be hoped that she will achieve her objective of creating a free trade relationship between the UK and the EU.

She was also firm in her suggestion that no deal would be better than a bad deal for the UK, suggesting that if a good deal cannot be agreed, the UK would be willing to rely on World Trade Organisation tariff rules.

That outcome would not be good news for the Irish agri-food sector, in particular.

Moreover, she threatened that, in such an outcome, the UK could change its economic model, with a sharp cut in the corporation tax rate a distinct possibility in order to attract foreign direct investment.

Interesting times!