For the last five years the global economy has been in a low-growth trap, with growth disappointingly low and stuck at around 3%. Persistent growth shortfalls have weighed on future output expectations and thereby reduced current spending and potential output growth. Global trade and investment have been weak, limiting the advances in labour productivity and wages that are required to support sustainable consumption growth. However, fiscal policies, both implemented and proposed, could, if effective, catalyse private economic activity and push the global economy to a modestly higher growth rate of around 3½ per cent by 2018. Exiting the low-growth trap depends on policy choices, as well as on concerted and effective implementation. If, as assumed in the projections, the incoming US Administration implements a significant and effective fiscal initiative that boosts domestic investment and consumption, global growth could increase by 0.1 percentage point in 2017 and 0.3 percentage point in 2018. If the fiscal stimulus underway in China continues to support demand, this could also bolster global growth by 0.2 percentage points per annum on average over 2017-18. A more robust fiscal easing than currently projected in many other advanced economies, including in the EU, would further support domestic and global activity. OECD analysis of fiscal space indicates that the EU has room for more concerted action.