Global Economy Watch

Global Economy Watch

Economic projections: January 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 2014 world GDP Real GDP growth Inflation
PPP MER 2015e 2016p 2017p 2018-
2022p
2015e 2016p 2017p 2018-
2022p
Global (Market Exchange Rates) 100% 2.7 3.0 3.0 2.9 1.9 2.4 2.3 2.6
Global (PPP rates) 100% 3.2 3.5 3.6 3.5
G7 32.0% 46.0% 1.9 2.2 2.1 1.9 0.3 1.2 1.5 1.8
E7 35.6% 25.4% 4.2 4.5 4.8 4.8 0.5 2.3 2.8 3.2
United States 15.9% 22.5% 2.6 2.8 2.6 2.3 0.1 1.4 1.9 2.0
China 16.6% 13.4% 6.9 6.5 6.0 5.7 1.5 1.8 1.8 2.8
Japan 4.4% 6.0% 0.7 1.3 1.3 1.0 0.8 0.9 1.1 1.4
United Kingdom 2.4% 3.8% 2.2 2.2 2.3 2.3 0.0 1.2 1.9 2.0
Eurozone 12.2% 17.4% 1.5 1.6 1.7 1.6 0.1 1.1 0.9 1.4
France 2.4% 3.7% 1.2 1.3 1.6 1.6 0.1 1.2 0.0 1.2
Germany 3.4% 5.0% 1.5 1.7 1.6 1.4 0.2 1.3 1.5 1.7
Greece 0.3% 0.3% -2.2 -1.4 2.7 2.5 -0.4 0.1 -1.4 1.4
Ireland 0.2% 0.3% 6.7 5.5 4.3 2.5 -0.0 1.0 1.5 1.7
Italy 2.0% 2.8% 0.7 1.3 1.2 1.2 0.2 0.7 1.0 1.4
Netherlands 0.7% 1.1% 2.0 1.8 2.2 1.8 0.3 1.2 1.5 1.3
Portugal 0.3% 0.3% 1.5 1.6 1.7 1.2 0.5 0.8 1.4 1.6
Spain 1.4% 1.8% 3.1 2.6 2.3 2.0 -0.6 0.8 1.0 1.2
Poland 0.9% 0.7% 3.5 3.4 3.4 3.6 -0.9 0.9 1.3 2.5
Russia 3.3% 2.4% -3.8 -0.5 1.0 1.5 15.6 8.9 7.3 4.0
Turkey 1.4% 1.0% 3.2 3.0 3.2 3.5 7.6 7.2 6.7 6.5
Australia 1.0% 1.9% 1.7 2.7 2.9 2.9 1.7 2.5 0.0 2.5
India 6.8% 2.7% 7.3 7.7 7.7 6.5 5.0 5.2 4.3 5.0
Indonesia 2.5% 1.2% 5.2 3.6 4.6 5.4 6.8 6.1 0.0 5.1
South Korea 1.6% 1.8% 2.6 3.1 3.6 3.5 0.8 1.5 1.8 3.3
Argentina 0.9% 0.7% 2.0 1.7 2.3 2.5 17.0 25.0 25.0 20.0
Brazil 3.0% 3.0% -2.9 -0.9 1.4 3.0 9.0 7.5 5.0 5.0
Canada 1.5% 2.3% 1.3 2.0 2.3 2.2 1.1 1.7 1.9 2.0
Mexico 2.0% 1.7% 2.4 2.6 3.0 3.3 2.7 3.1 3.0 3.0
South Africa 0.7% 0.5% 1.5 1.6 2.0 2.5 4.6 5.6 5.4 5.3
Nigeria 1.0% 0.7% 3.2 4.8 5.0 5.5 9.1 10.0 9.2 7.5
Saudi Arabia 1.5% 1.0% 2.8 2.3 2.9 3.3 2.2 2.5 3.0 3.2

Sources:PwC analysis, National statistical authorities, Datastream and IMF. All inflation indicators relate to the Consumer Price Index (CPI). Argentina's inflation projections use the IPCNu Index. 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) Rate to rise gradually in 2016 26-27 January
European Central Bank 0.05% (September 2014) Rate on hold until at least 2017 21 January
Bank of England 0.5% (March 2009) Rate rise expected at some point during 2016 14 January

Chart of the month

Global year-on-year (Y-o-Y) GDP growth in the second quarter of 2015 was slightly lower than 3%, which it last exceeded in the first quarter of 2014. The contribution of the BRIC economies has fallen, but this has been somewhat offset by the Eurozone, which has swung from being a drag on growth at the start of 2013 to contributing around 11% of global growth in 2015 Q2.