The global growth outlook for 2015

Focusing on the divergent opportunities, the global economy will grow by between 2.8 to 3.8 percent this year about one percent lower than last year’s consensus forecast. The growth is expected to come from divergence in growth rates among regions, countries and sectors. This gives birth to an essential element of strategic and financial planning raking into light the critical regional trends and risks, with sensitivity to key economical indicators and government policy responses. Most forecasters expect a robust US economy to continue to lead the way and the euro zone’s new program of quantitative easing is a sign that the region is ready for expansion. And while falling oil prices weigh heavily on growth prospects for commodities. Dependent Brazil and Russia, China and India are benefiting from easing inflationary pressures.

Region by region

US economy– The US economy has overcome a number of hurdles to see its way clear to a deeper and stronger recovery. The range of growth forecasts exceeds 3 percent this year on account of better consumer sentiment, trade activity, and fall in unemployment rate upbeat investor sentiment.

Euro zone– If the negotiations with the Greece are effectively managed, the euro zone will be in a better position to benefit from Europe’s looser monetary policy. GDP forecast for this year for euro zone’s is slightly above one percent.

China and India– Both the nations have experienced broad improvements in macroeconomic conditions especially as low energy prices, easing inflationary pressure and import bills. The GDP growth for the two is expected to be in between 6.3 to 6.5 percent.

Brazil– The country is struggling trade and fiscal deficit, though inflation has eased in near future. The GDP growth is expected to be lower the 1 percent.

Russia– Rubble has lost nearly 50 percent of its value in the past 12 months, consumer sentiment has hit 5 year low and inflation rate has hit 11.4 percent. Most GDP forecasts for Russia have been cut sharply, ranging from 0 growths to contraction of 0.7 percent.

The lowered global growth estimates of more than 3 percent in 2015 and 2016 remain well above the historical average of 1.8 percent annual growth during the past 50 years. Even then shady clouds of oil and gas volatility, country conflicts, foreign exchange policy etc haze the global growth path.

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