In a note to investors, Principal Global Investors chief global economist Bob Baur said there had been a cyclical economic rebound from the “quagmire” of post-GFC markets, noting that “no cycle lasts forever”.

“A global upturn that has synchronised around the world became firmly established last summer and was finally accepted by the investment consensus after the US election. That recovery is ongoing, improving and likely to last well in 2018,” he said.

“What is now happening is likely much more than just a cyclical bounce from an economically ugly time. It’s probable that the adjustment costs of doubling the world’s labor force are behind us, so the global economy is likely in a long transition to an old normal.”

Mr Baur said economic recovery has two phases, the first being a return to inflation and the second being an improvement in growth.

“Starting early last year, the global economy began to rebound from several years of deflation and a near-recession in 2015,” he said.

“As investment and wages pick up in the United States, core inflation improves in Europe and Japan and growth in China stays the course, this recovery should move to act II: sustainable, above-trend growth.”

Additionally, central banks in the US, Europe, England and Japan are also “feeling better about their respective economies”, Mr Baur said.