Global Economy Watch - Projections

Economic projections: January 2017

Our monthly economic projections table summarises our main scenario GDP and inflation projections. We also assess the interest rate outlook for the US, the UK and the Eurozone.

 

 

Share of 2016 world GDP Real GDP growth Inflation 
  PPP MER 2016e 2017p 2018p 2019-2023p 2016e 2017p 2018p 2019-2023p
Global (Market Exchange Rates)   100% 2.5 2.9 2.1 3.0 2.2 2.4 2.0 2.5
Global (PPP rates) 100%   2.9 3.4 2.2 3.5 2.8 2.9 2.1 2.9
G7 31.5% 46.4% 1.4 1.7 1.3 1.9 0.9 2.0 1.6 1.8
E7 36.2% 25.9% 4.6 5.2 3.9 5.0 1.5 3.5 2.8 3.3
                     
United States 15.8% 24.5% 1.6 2.2 2.2 2.3 1.3 2.3 2.4 2.0
China 17.3% 15.2% 6.5 6.5 6.1 5.7 2.0 1.8 2.5 2.8
Japan 4.2% 5.6% 0.6 0.5 0.7 0.8 0.1 1.3 1.5 1.5
United Kingdom 2.4% 3.9% 2.0 1.2 1.6 2.1 0.6 2.3 2.7 2.3
Eurozone 12.0% 15.8% 1.6 1.5 1.7 1.5 0.2 1.3 1.2 1.4
France 2.3% 3.3% 1.4 1.5 1.6 1.6 0.3 1.2 1.1 1.2
Germany 3.4% 4.6% 1.6 1.4 1.4 1.4 0.3 1.5 1.6 1.7
Greece 0.3% 0.3% -1.0 0.5 1.3 1.6 -0.3 0.5 0.8 1.1
Ireland 0.3% 0.4% 4.0 3.3 3.0 2.6 -0.1 0.8 1.3 1.5
Italy 1.9% 2.5% 0.9 1.0 1.1 1.2 0.2 1.1 1.2 1.4
Netherlands 0.7% 1.0% 1.6 1.6 1.8 1.8 0.8 1.5 1.2 1.3
Portugal 0.3% 0.3% 1.2 1.2 1.1 1.1 0.6 1.0 1.2 1.4
Spain 1.4% 1.6% 2.6 2.3 1.9 2.0 -0.4 1.3 1.1 1.2
Poland 0.9% 0.6% 3.6 3.4 3.2 3.5 -0.3 1.2 1.7 2.4
Russia 3.3% 1.8% -1.6 0.9 1.0 1.5 7.3 6.3 5.1 4.0
Turkey 1.4% 1.0% 3.1 3.2 3.2 3.4 8.0 7.8 7.2 7.0
Australia 1.0% 1.7% 3.1 2.7 2.8 2.7 1.5 2.5 2.4 2.5
India 7.0% 2.8% 7.3 7.3 7.0 6.5 5.1 5.0 5.1 5.0
Indonesia 2.5% 1.2% 5.0 5.1 5.5 5.4 3.6 4.5 4.4 5.1
South Korea 1.6% 1.9% 2.7 2.6 2.8 3.3 1.0 1.6 2.8 3.3
Argentina 0.8% 0.9% -2.2 1.9 2.4 2.5 30.0 - - -
Brazil 2.8% 2.4% -3.6 0.1 1.5 3.0 9.0 5.0 5.0 5.0
Canada 1.4% 2.1% 1.3 1.9 2.1 2.2 1.5 1.9 2.0 2.0
Mexico 2.0% 1.6% 1.9 2.1 2.3 3.0 2.8 3.4 3.1 3.0
South Africa 0.6% 0.4% 0.7 1.4 1.6 3.0 6.3 6.0 5.7 5.5
Nigeria 1.0% 0.7% -1.0 1.0 2.3 4.2 15.2 16.5 15.0 12.0
Saudi Arabia 1.5% 0.9% 1.2 1.7 2.3 3.5 4.0 3.2 3.0 2.5

Sources: PwC analysis, National statistical authorities, Datastream and IMF. All inflation indicators relate to the Consumer Price Index (CPI). Argentina has recently launched a new CPI measure, which only contains data from April 2016. We therefore do not report an inflation measure for 2015, and will provide 2017 and 2018-2022 projections once a longer series is available. Ireland’s GDP growth in 2015 was boosted by some very high investment figures by subsidiaries in Ireland. Note that the tables above form our main scenario projections and are therefore subject to considerable uncertainties. We recommend that our clients look at a range of alternative scenarios. 

 

Interest rate outlook of major economies 

  Current rate (Last change)          Expectation Next meeting
Federal Reserve 0.5-0.75% (December 2016)      Further gradual lightening over the next year 31 January - 1 february
European Central Bank 0.0% (March 2016)      No rate rise for the foreseeable future 19 January
Bank of England 0.25% (August 2016)      No change in rates expected in the short-term 2 February

 

 

 

Chart of the month

Before the financial crisis, we were used to seeing global trade grow 1.5-2 times faster than world GDP growth. Since 2008 this pattern has reversed.

Cyclical factors have contributed, but structural factors are also at play. China’s transition away from an export-led economy, increasing automation and difficulties in achieving new global trade deals are key factors which explain this pattern.

 



 

 

 

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Barret Kupelian
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