Global Economy Watch

Global Economy Watch

Economic projections: May 2016

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. Finally, our monthly updated Global Consumer Index provides an early steer on consumer spending and the growth prospects in the world’s 20 largest economies.

Share of 2015 world GDP Real GDP growth Inflation
PPP MER 2015e 2016p 2017p 2018-
2022p
2015e 2016p 2017p 2018-
2022p
Global (Market Exchange Rates) 100% 2.8 2.7 2.9 3.0 1.7 2.1 2.6 2.7
Global (PPP rates) 100% 3.2 3.1 3.4 3.4
G7 31.5% 46.6% 1.8 1.7 1.9 1.9 0.2 0.8 1.8 1.8
E7 36.1% 25.8% 4.7 4.7 4.9 5.0 0.4 1.4 3.2 3.3
United States 15.8% 24.5% 2.4 2.0 2.3 2.3 0.1 1.0 2.1 2.0
China 17.1% 15.0% 6.8 6.5 6.0 5.7 1.5 1.8 1.8 2.8
Japan 4.3% 5.6% 0.5 1.0 0.8 0.8 0.8 0.4 1.4 1.5
United Kingdom 2.4% 3.9% 2.3 2.0 2.3 2.3 0.0 0.6 1.6 2.0
Eurozone 11.9% 15.8% 1.6 1.6 1.7 1.5 0.0 0.5 1.3 1.4
France 2.3% 3.3% 1.2 1.4 1.6 1.6 0.1 0.4 1.2 1.2
Germany 3.4% 4.6% 1.4 1.5 1.6 1.4 0.1 0.7 1.5 1.7
Greece 0.3% 0.3% -0.3 -0.8 0.8 2.0 -1.1 0.0 2.0 1.3
Ireland 0.2% 0.3% 7.8 5.0 3.9 2.5 -0.0 0.8 1.4 1.7
Italy 1.9% 2.5% 0.6 1.1 1.2 1.2 0.1 0.3 1.0 1.4
Netherlands 0.7% 1.0% 2.0 1.7 1.8 1.8 0.2 0.8 1.5 1.3
Portugal 0.3% 0.3% 1.5 1.3 1.2 1.2 0.5 0.8 1.1 1.5
Spain 1.4% 1.6% 3.2 2.6 2.3 2.0 -0.6 -0.0 1.3 1.2
Poland 0.9% 0.6% 3.6 3.7 3.7 3.5 -0.9 0.0 1.2 2.4
Russia 3.3% 1.8% -3.8 -1.9 0.9 1.5 15.5 7.5 7.1 4.0
Turkey 1.4% 1.0% 4.0 3.5 3.6 3.5 7.7 8.5 7.5 7.0
Australia 1.0% 1.7% 2.2 2.4 2.5 2.7 1.5 2.3 2.5 2.5
India 7.0% 2.9% 7.1 7.7 7.7 6.5 4.9 4.1 4.3 5.0
Indonesia 2.5% 1.2% 5.2 4.8 4.8 5.4 6.8 6.1 6.1 5.1
South Korea 1.6% 1.9% 2.6 2.6 2.7 3.1 0.7 1.5 1.8 3.3
Argentina 0.9% 0.8% 1.5 0.0 2.3 2.5 17.0 25.0 25.0 20.0
Brazil 2.8% 2.4% -3.8 -3.8 -0.0 3.0 9.0 9.0 6.5 5.0
Canada 1.4% 2.1% 1.2 1.4 1.8 2.2 1.1 1.4 1.8 2.0
Mexico 2.0% 1.6% 2.5 2.7 3.0 3.3 2.7 3.2 3.1 3.0
South Africa 0.6% 0.4% 1.3 0.8 1.8 2.5 4.6 6.2 5.8 5.5
Nigeria 1.0% 0.7% 2.7 3.3 3.8 4.5 9.0 10.5 10.0 8.5
Saudi Arabia 1.5% 0.9% 3.4 1.3 1.5 2.5 2.2 3.0 3.2 2.5

Sources: PwC analysis, National statistical authorities, Datastream and IMF. All inflation indicators relate to the Consumer Price Index (CPI). Argentina has declared a national statistical emergency, and as such, GDP and inflation data releases have been suspended. Therefore our projections are based on the latest available data from 2015. Also 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 0.25-0.5% (December 2015) Next rate rise may be delayed until later in 2016 14-15 June
European Central Bank 0.0% (March 2016) No rise until after March 2017 02 June
Bank of England 0.5% (March 2009) No immediate rate rise likely 12 May

Chart of the month

The global inflation rate in the final quarter of 2015 was 1.7% year-on-year, holding steady from the preceding two quarters of the year. Inflation in the BRIC economies remained steady while inflation in the UK and Eurozone remained relatively flat. A small increase in US inflation offset the dip seen in other nations.