Global Economy Watch - Projections

Global Economy Watch

Economic projections: October 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 2015 2016p 2017p 2018-2022p 2015 2016p 2017p 2018-2022p
Global (Market Exchange Rates)   100% 3.0 2.5 2.9 2.9 1.6 2.1 2.4 2.5
Global (PPP rates) 100%   3.4 3.0 3.4 3.4        
G7 31.5% 46.4% 1.9 1.4 1.7 1.9 0.2 0.8 1.9 1.8
E7 36.2% 25.9% 4.8 4.7 5.3 5.0 0.4 1.4 3.3 3.3
                     
United States 15.8% 24.5% 2.6 1.5 2.2 2.3 0.1 1.2 2.2 2.0
China 17.3% 15.2% 7.1 6.5 6.5 5.7 1.5 1.8 1.8 2.8
Japan 4.2% 5.6% 0.6 0.6 0.5 0.8 0.8 0.1 1.3 1.5
United Kingdom 2.4% 3.9% 2.2 1.8 0.9 2.1 0.0 0.6 1.8 2.1
Eurozone 12.0% 15.8% 2.1 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% -0.3 -1.3 0.3 1.5 -1.1 -0.3 0.5 1.3
Ireland 0.3% 0.4% 26.3 4.2 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 3.2 3.5 3.0 7.7 8.2 7.8 7.0
Australia 1.0% 1.7% 2.5 2.6 2.8 2.7 1.5 1.8 2.5 2.5
India 7.0% 2.8% 7.1 7.7 7.7 6.5 4.9 4.1 4.3 5.0
Indonesia 2.5% 1.2% 4.8 4.8 5.2 5.4 6.5 5.7 6.1 5.1
South Korea 1.6% 1.9% 2.6 2.7 2.6 3.3 0.7 1.0 1.6 3.3
Argentina 0.8% 0.9% 2.4 -0.8 2.1 2.5 - 30.0 - -
Brazil 2.8% 2.4% -3.8 -3.0 1.0 3.0 9.0 9.0 6.5 5.0
Canada 1.4% 2.1% 1.1 1.0 1.9 2.2 1.1 1.5 1.9 2.0
Mexico 2.0% 1.6% 2.5 1.9 2.5 3.3 2.7 2.7 3.1 3.0
South Africa 0.6% 0.4% 1.3 0.3 1.0 2.0 4.6 6.0 5.5 5.5
Nigeria 1.0% 0.7% 2.7 -1.0 1.0 3.0 9.0 14.5 13.5 11.0
Saudi Arabia 1.5% 0.9% 3.5 1.0 1.5 2.5 2.2 4.0 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 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 0.25-0.5% (December 2015)        Rate rise delayed until December 2016 or later 1-2 November
European Central Bank 0.0% (March 2016)        No rate rise for the foreseeable future 20 October
Bank of England 0.25% (August 2016)        Further small rate cut possible but not certain 3 November

 

 

 

Chart of the month

Global year-on-year (Y-o-Y) GDP growth in the second quarter of 2016 fell to 2.4%, its lowest rate since the first quarter of 2013.

The contribution of the US economy fell for the fifth quarter in succession to 0.4 percentage points (pp) but the UK’s contribution remained around 0.1pp, despite the run up to the EU referendum. 



 

 

 

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