Global Economy Watch - Projections

Global Economy Watch

Economic projections: July/August 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.

 

 

                                   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 2.6 2.8 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 1.6 1.6 1.9 0.2 0.8 1.8 1.8
E7 36.1% 25.8% 4.7 4.6 5.2 5.0 0.4 1.5 3.3 3.3
United States 15.8% 24.5% 2.4 1.9 2.2 2.3 0.1 1.2 2.2 2.0
China 17.1% 15.0% 6.9 6.5 6.5 5.7 1.5 1.8 1.8 2.8
Japan 4.3% 5.6% 0.6 0.7 0.5 0.8 0.8 0.2 1.4 1.5
United Kingdom 2.4% 3.9% 2.2 1.6 0.6 2.1 0.0 0.7 1.8 2.0
Eurozone 11.9% 15.8% 1.6 1.6 1.5 1.5 0.0 0.2 1.3 1.4
France 2.3% 3.3% 1.2 1.4 1.5 1.6 0.1 0.3 1.2 1.2
Germany 3.4% 4.6% 1.4 1.6 1.4 1.4 0.1 0.3 1.5 1.7
Greece 0.3% 0.3% -0.4 -1.4 0.3 1.5 -1.1 -0.3 0.5 1.3
Ireland 0.2% 0.3% 7.8 4.5 3.3 2.5 0.0 0.8 1.8 1.7
Italy 1.9% 2.5% 0.6 0.9 1.0 1.2 0.1 0.2 1.1 1.4
Netherlands 0.7% 1.0% 2.0 1.6 1.6 1.8 0.2 0.8 1.5 1.3
Portugal 0.3% 0.3% 1.5 1.3 1.3 1.2 0.5 0.7 0.9 1.5
Spain 1.4% 1.6% 3.2 2.6 2.3 2.0 -0.6 -0.4 1.3 1.2
Poland 0.9% 0.6% 3.6 3.5 3.4 3.5 -0.9 -0.3 1.0 2.4
Russia 3.3% 1.8% -3.7 -1.7 1.0 1.5 15.5 7.3 6.8 4.0
Turkey 1.4% 1.0% 4.0 3.8 3.7 3.5 7.7 7.7 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 2.7 2.7 3.2 0.7 1.1 1.7 3.3
Argentina 0.9% 0.8% 2.4 -0.8 2.1 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% 1.1 1.6 1.9 2.2 1.1 1.5 1.8 2.0
Mexico 2.0% 1.6% 2.5 2.3 2.7 3.3 2.7 2.9 3.1 3.0
South Africa 0.6% 0.4% 1.3 0.4 1.0 2.0 4.6 6.0 5.5 5.5
Nigeria 1.0% 0.7% 2.7 1.0 2.5 3.5 9.0 14.0 13.5 11.0
Saudi Arabia 1.5% 0.9% 3.5 1.3 1.5 2.5 2.2 3.9 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, inflation data releases have been suspended. Therefore our inflation 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)
Rate rise delayed until December 2016 or later 26-27 July
European Central Bank 0.0% (March 2016) No rate rise for the foreseable future 21 July
Bank of England 0.5% (March 2009) Some monetary loosening likely in response to Brexit vote 4 August

 

 

 

Chart of the month

Following the UK’s vote to leave the EU, we have revised our main scenario projections for real GDP growth.

We are projecting that quarter-on-quarter growth could fall to around zero in the last quarter of this year and the first quarter of 2017, but we would narrowly avoid a recession. Growth would then gradually pick up later in 2017 and beyond.

 

 

 

 

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