Volatility in equities, commodities and energy markets – coupled with continuing speculation over monetary tightening in the U.S. and UK, a strong U.S. dollar, continued quantitative easing (QE) in the Eurozone and Japan and a slowdown in global trade – have all conspired to shape the global economic environment over the last 12 months.
The world economy is expected to expand by 2.5% in 2015 (Fig 1), consistent with annual performances since 2012; however, the contribution to growth from emerging markets continues to decline as major economies such as China, Brazil and Russia slowdown or even contract. Improvements in advanced economies, principally the U.S. and UK, have propelled growth to an estimated 2% per annum in 2015, up from just 1% in 2012-13, helping to balance out this muted performance in emerging markets. Overall, while emerging markets remain the main contributors to economic growth, over the remainder of 2015 and in 2016 they are likely to face the greater headwinds. Indeed, emerging market performance has been the principal reason why the global economic growth outlook has been revised down over recent quarters and, more importantly, is a key explanation why the downside risks now appear more prominent than they did just a few months ago.
Source : Cushman & Wakefield