FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 08 August 2015

Global Economic Outlook Declines

Written by

Given the drop in many commodity prices across the world, developing countries are seeing lower growth, especially for oil exporters. For oil importers, however, these reduced prices have provided an opportunity for growth. Oil prices have more than halved since September of last year, which has allowed importers to cut costs by a large amount. Nonfuel commodities dropped 4% according to the IMF, and they are expecting this trend to continue through 2015, resulting in a projected 15.6% decrease in 2016. Due to lower commodity prices the IMF has dropped emerging markets' projected growth from 4.6% to 4.2% in 2015.

There are a number of other factors that are accounted for in this projection including political unrest in the Middle East and Russia, as well as a rebalancing in China. The IMF believes these factors to become smaller in 2016 as projected growth in emerging markets is expected to be a liitle stronger, reaching 4.7%. There is some uncertainty in regards to this projected growth as there is a fairly large amount of volatility in markets at the moment, especially China.

The Institute of International Finance projects that capital flows to emerging markets could see a further decrease throughout the year as the Fed looks to raise rates in September and possibly again in December. This is coupled with the lackluster growth we have seen in these markets recently, as well as the political unrest in Russia and Middle East. While the IMF and IIF (Institute of International Finance) both predict a pickup in capital flows to emerging markets in 2016, they also state a clear downside risk due to the Fed tightening and slowing global growth.

Though uncertainty is present, there is confidence in the continued growth within advanced economies. In the US there is a strengthening in the housing market, lower fuel prices, and increases in consumption and investment, which suggest continued growth, as these remain intact. While this could be hindered by an increase in interest rate the IMF does not believe this will cause a large setback. While predictions for Europe remain generally consistent with that of other advanced economies, much uncertainty lies with Greece.

According to the IMF, Japan has also seen an increase in capital investment though consumption has remained stagnant as well as real wages.

The general outlook is favorable for advanced economies though much uncertainty exists due to political unrest as well as volatile markets, mentioned above. Developing economies will see slowed growth due to a poor commodity market, though if the Middle East, Russia, and Greece sort out the current political unrest these 2015 hot spots should have a decreasing impact next year.

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
The Surprising Pevalence of Surprises in Export Specialisation
The Destruction of the Existing Workforce
News Blog
A New Order Of The Ages
How Bond Investors Were Fooled Twice
Infographic Of The Day: Crowdfunding
Early Headlines: Asia Stocks Mixed, Dollar Down, Oil Up, China May Replace US In TPP, Trump Freezes Feds' Hiring, Trump Files 'Secret' Transfer Papers, May To Visit China And More
January 23, 2017 Weather and Climate Report - NOAA Continues ENSO Neutral Denial
Documentary Of The Week: China's Wealth, Collapse, And Environmental Nightmare
Where Trump Stands On Twitter
Is This Really The Final Word On Whether Calorie-restricted Diets Make You Live Longer?
Electric Mobility Has A Long Way To Go
Average Gasoline Prices for Week Ending 23 January 2017 Fell Over 3 cents
What We Read Today 23 January 2017
Badass Grandpa Tokyo Drift!
Hurricane Matthew Clocks Top Wind Speed For 2016 At 101 MPH
Investing Blog
Netflix And Co. Surpass DVD And Blu-ray Sales
The Future Of Online Sales
Opinion Blog
Bill Maher 2017 Season Premier
Trumping World Trade
Precious Metals Blog
A Slow Start For The Week Would Be Constructive For Gold
Live Markets
24Jan2017 Pre-Market Commentary: Wall Street Quiet, Flat, As Investors Await Corporate Earnings, Crude Prices Recovering And US Dollar Slipping Again
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved