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AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 127
Global Outlook and Regional Developments
Slow but gradual rebound in advanced economies…
Global growth is projected at 3.1% in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a
slowdown in emerging market and developing economies, according to the IMF. The sudden increase in financial market volatility
globally in August 2015 triggered by the sharp stock market decline in China and concerns about the sustainability of its growth
engine did not have long-lasting effects: financial conditions have remained favourable in advanced economies.
Global output forecasts for 2016 are expected to be lower than predicted in mid-2015 but could nevertheless strengthen to 3.6%.
Recovery has been more entrenched in the United States and the United Kingdom and this is projected to increase moderately
in 2016, despite fears of monetary tightening. The mild but sustained recovery in the euro area in 2015 and the return of Japan in
positive growth territory are set to continue in 2016 but, according to the IMF, medium-term prospects remain subdued.
Inflation has remained on a declining trend in 2015 in advanced economies. This is expected to rise in 2016 but it is generally
believed that the rates will remain below central banks’ targets. In the UK in September 2015, for instance, for only the second time
since 1960, the inflation rate has turned negative, reflecting a weak price backdrop. The Bank of England has warned that this could
persist in 2016, thus remaining far below its target rate of 2%.
Year over
Year
Projections
2014
2015
2016
World Output
3.4
3.3
3.8
Advanced Economies
1.8
2.1
2.4
United States
2.4
2.5
3.0
Euro Area
0.8
1.5
1.7
Germany
1.6
1.6
1.7
France
0.2
1.2
1.5
Italy
-0.4
0.7
1.2
Spain
1.4
3.1
2.5
Japan
-0.1
0.8
1.2
United Kingdom
2.9
2.4
2.2
Canada
2.4
1.5
2.1
Other Advanced Economies
2.8
2.7
3.1
Emerging Market and Developing Economies
4.6
4.2
4.7
Commonwealth of Independent States
1.0
-2.2
1.2
Russia
0.6
-3.4
0.2
Excluding Russia
1.9
0.7
3.3
Emerging and Developing Asia
6.8
6.6
6.4
China
7.4
6.8
6.3
India
7.3
7.5
7.5
ASEAN-5
4.6
4.7
5.1
Emerging and Developing Europe
2.8
2.9
2.9
Latin America and the Caribbean
1.3
0.5
1.7
Brazil
0.1
-1.5
0.7
Mexico
2.1
2.4
3.0
Middle East, North Africa, Afghanistan and Pakistan
2.7
2.6
3.8
Saudi Arabia
3.5
2.8
2.4
Sub-Saharan Africa
5.0
4.4
5.1
Nigeria
6.3
4.5
5.0
South Africa
1.5
2.0
2.1
Mauritius
3.6
3.2
3.8
Growth forecasts of the World Economic Outlook
Source: “World Economic Outlook: Adjusting to lower commodity prices,” IMF, October 2015