Global Economy Watch

Global Economy Watch

Economic projections: August 2015

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 2014 2015p 2016p 2017-
2021p
2014 2015p 2016p 2017-
2021p
Global (Market Exchange Rates) 100% 2.8 2.8 3.2 3.1 2.3 1.9 2.6 2.5
Global (PPP rates) 100% 3.4 3.3 3.8 3.6
United States 16.1% 22.5% 2.4 2.4 2.7 2.5 1.6 0.3 1.8 1.9
China 16.3% 13.4% 7.6 7.0 7.0 5.7 2.1 1.9 1.8 3.0
Japan 4.4% 6.0% -0.1 1.1 1.7 1.3 2.7 1.4 1.5 1.9
United Kingdom 2.4% 3.8% 3.0 2.6 2.4 2.3 1.5 0.3 1.7 2.0
Eurozone 12.2% 17.4% 0.8 1.5 1.7 1.8 0.5 0.1 1.4 1.4
France 2.4% 3.7% 0.4 1.3 1.4 1.9 0.6 0.1 1.1 1.2
Germany 3.4% 5.0% 1.6 1.7 1.9 1.6 0.8 0.2 1.8 1.7
Greece 0.3% 0.3% 0.7 -1.5 0.7 2.5 -1.4 -0.8 0.3 1.4
Ireland 0.2% 0.3% 5.2 3.9 4.0 2.5 0.3 0.3 1.4 1.5
Italy 2.0% 2.8% -0.4 0.6 1.2 1.3 0.2 -0.1 1.8 1.4
Netherlands 0.7% 1.1% 0.8 1.4 1.6 1.9 1.0 1.2 1.1 1.3
Portugal 0.3% 0.3% 0.9 1.6 1.8 1.8 -0.2 0.4 1.1 1.5
Spain 1.5% 1.8% 0.7 3.0 2.5 2.2 -0.2 -0.5 1.1 1.2
Poland 0.9% 0.7% 3.5 3.5 3.4 3.2 0.2 -0.6 1.4 2.5
Russia 3.3% 2.4% 0.6 -5.0 -0.5 1.9 7.8 15.0 8.0 4.3
Turkey 1.4% 1.0% 2.9 2.8 3.5 3.7 8.9 7.7 6.8 6.2
Australia 1.0% 1.9% 0.7 2.6 2.0 2.9 2.6 2.5 2.6 2.5
India 6.8% 2.7% 7.0 7.5 7.9 6.1 3.8 -1.5 4.3 6.0
Indonesia 2.5% 1.1% 1.2 4.9 5.0 5.4 6.4 6.8 5.8 5.1
South Korea 1.6% 1.8% 3.3 3.1 3.5 3.5 1.3 1.0 2.0 2.9
Argentina 0.9% 0.7% 0.5 0.8 1.8 2.1 - 20.0 25.0 -
Brazil 3.0% 3.0% 0.1 -0.9 0.7 3.1 6.3 8.0 6.0 4.8
Canada 1.5% 2.3% 2.4 1.3 2.1 2.2 1.9 1.1 1.9 2.1
Mexico 2.0% 1.7% 2.1 2.7 3.3 3.9 4.0 3.0 3.3 3.1
South Africa 0.7% 0.5% 1.5 1.8 2.0 3.2 6.1 4.8 5.6 5.3
Nigeria 1.0% 0.7% 6.2 4.0 4.5 6.0 8.1 10.5 10.0 7.3
Saudi Arabia 1.5% 1.0% 3.5 2.6 3.0 4.4 2.7 2.3 3.0 3.4

Sources: PwC analysis, National statistical authorities, Datastream and IMF. All inflation indicators relate to the Consumer Price Index (CPI), with the exception of the Indian indicator which refers to the Wholesale Price Index (WPI). Argentina's inflation projections use the IPCNu Index. We will provide a 2017-2021 inflation projection once a longer time series of data is available. There is not a complete series of year-on-year price growth data available for 2014 so we have not provided an estimate for annual inflation in this year. 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 0-0.25% (December 2008) Rate to start to
rise later in 2015
16-17 September
European Central Bank 0.05% (September 2014) Rate on hold
until at least
late 2016
3 September
Bank of England 0.5% (March 2009) First rise
expected in early 2016
6 August

PwC’s Global Consumer Index

Growth in consumer spending stabilised in July, albeit remaining below its long-term growth rate. Global equity markets rallied in response to more positive news in the Eurozone as the possibility of a Greek exit lessens. Consumer and business confidence edged up slightly, combined with stronger industrial production in Europe and China. These point to a possible improvement in consumer spending in the coming months.