Goldman Sachs Says These 3 Things Could Wreck the Economy in 2017

That’s according to Goldman Sachs’ chief economist, Jan Hatzius, in a Monday report and presentation in London that looked at the state of the global economy for 2017. Hatzius focused on three trends that could derail the economy:

1. A Hard Turn Toward Protectionism

Goldman Sachs, like the majority of Wall Street banks, has dismissed the possibility of Trump enacting the bulk of his anti-free trade policies. But if Trump manages the unexpected, investors and the global economy could be in for a rude awakening.

“That’s definitely something that we’ve got our eye on that I think is a downside risk to the global economy,” Hatzius said in a Monday speech, as reported by Business Insider.

2. Southern Europe Continues to Flail

Europe could be in for a messy year, with the rise of populist movements threatening to destabilize political institutions. Additionally, European labor markets could remain weak in the new year.

But there are signs that the European labor market is picking up. Unemployment in the 19-nation region known as the euro area fell to its lowest point in more than seven years: 9.8% according to Eurostat, the statistical office of the European Union. In November 2015, unemployment for the area clocked in at 20.9%.

3. The Chinese Debt Boom

In recent years, economists have warned about China’s growing corporate debt pile. From 2009 to 2015, credit in China grew an average of 20% each year—far exceeding its GDP growth, according to the International Monetary Fund.

Now, experts are worried that with a slowing Chinese economy, many companies may not be able to pay back their debt.

The chief economist at Goldman Sachs reiterated that fear. Hatzius noted that the bank was watching for an increase in Chinese investors moving assets abroad as a signal of further weakness in the country’s economy.

Hatzius is expecting Chinese GDP to reach 6.5% in 2017.

Overall, the economist expects global GDP to rebound to 3.5% in 2017.