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How Trump needs to manage his growing brand of populism

The only way Prediction-elect Donald Trump can deal with populism is to strike a balance between delivering its message and ensuring solid economic growth, according to Daniel Gros, head of research at the Center for European Policy Studies.

Trump wants to appear "not to be moderate, but in the substance, especially in the economic sense, (he needs) to remain moderate because he knows that's the only way he can deliver on growth," Gros told CNBC Tuesday.

"So the (U.S.) economic policy could remain ultimately rather prudent, but if the president makes it (grow fast) from time to time saying 'now we look after you', that might be enough," he added.

The increasing support for populism has been evident throughout 2016, not only in major events such as Brexit and the election of Donald Trump, but also in smaller state elections across Europe where such political parties have gathered a higher number of votes.

"Everything contributed a little bit (to populism)," Gros added.

"We had of course globalization which was overhyped; then we had the financial crisis and we dealt with it but not perfectly; and all throughout, there was this continuous rise of giving more and more attention to the minorities and at a certain time the majority says 'Hey, we would like to come to the picture as well'."

Populism has become a reality in global politics and thus spurred concerns over how it will impact the global economy. The election of Donald Trump in the U.S., for example, has made investors contemplate the resilience of the economy with his pledges of fiscal stimulus. However, on the whole traders have been buoyed by his message of expansion with the Dow Jones seeing six straight days of gains since the election.

The majority groups need to feel that politicians are looking after their interests and want to see proof that this is growth and expansion is happening, Gros later added.

"That is the art of the politicians now: To deliver the symbolism without damaging the economy," Gros told CNBC on the sidelines of a UBS conference in London.

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