These 4 things could rattle the global economy

After the darkness at the start to 2016, the world economy actually looks pretty good right now.

Despite a bit of softness, US economic data has been surprising to the upside over the last couple of months. The stock market (albeit with a misstep Tuesday), has also been trending up.

Across the world, from emerging markets to Europe, everything looks not great but pretty solid.

Don't get too comfortable, however, said Citi's global economics team Tuesday.

"None of the structural headwinds that seem to have plagued the global economy in recent years (a mix of excessive indebtedness, deteriorating demographics, rising political uncertainty as well as the end of the China growth miracle and the commodity supercycle) have been resolved," said Ebrahim Rahbari, Willem Buiter, and Cesar Rojas in a note.

The Citi economists cited short-term reasons they are concerned for global growth:

1. "The Chinese stabilization could be even more short-lived than we currently expect." As we have noted, much of China's growth has been reliant on an increasing pile of debt focused on their "old industry." As the Citi team notes, this debt-fueled growth may not raise demand in any way.
2. "One contributor to the potential stabilization in China's and EM activity has been the weaker US dollar and receding expectations of a US rate hike." The analysts think that the market may be under-pricing Fed rate hikes over the next two years. This in turn, would cause the dollar to become stronger, undercutting the recent emerging market rally.
3. "A US downturn could threaten." While most data has been decent recently, it is by no means burning up the charts. This makes the Citi team cautious and wondering if there is "more economic weakness to come."
4. "Political risks in Europe are high and rising." Brexit (which the Citi team think has a 30-40% chance of "Leave" winning), the refugee crisis, elections in Spain, and extremist parties in a variety of European countries all are making the continent look a bit risky.

Again, this isn't to say that the whole of the global economy is going to collapse anytime soon. The Citi team is merely arguing that they are factors that could dampen the recent uptrend in the global economy.

Not to say that a storm is crashing down on the economy, but it's good to keep an eye on the clouds on the horizon.