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Konstantinos Pappas

Alexandros Pappas

2015 Global Economic Outlook:


Better Than 2014 but Not By
Much

The I.M.F. called global


growth mediocre in
October in its latest
outlook
Secular stagnation in
Advanced Economies
remains a concern

Emerging Markets
cant grow as fast as
they used to without
inflation.

Is the U.S. recovery durable


enough to keep federal funds
rate near zero in 2015?

Putins diplomatic
approach to Crimea raises
many questions for the
export-dependent
economy which battles
through low oil prices
China faces construction
debt crisis if the already
declining growth rate
doesnt meet its
expectations

Germanys currently worlds largest


surplus likely to shrink in 2015

Japans second increase in consumption


taxes may be postponed as its first
Phase backfired in April

The new government has to face slow growth


and high inflation while dealing with the
highest operational costs in Latin America

Can the U.K. shrink the real estate


bubble without deflating the economy?

The global economy is taking longer than


expected to recuperate from the bursting of the
debt bubble during the last decade.
3 years ago, the IMF projected that the world
economy would be back on track by 2015,
growing at 4.8 percent.

You need all four wheels to be moving, or it


isnt going to be a good ride
So the IMF reduced its forecast for 2015 global
growth to 3.2 percent.
While the U.S. met the expectations the BRIC
nationsBrazil, Russia, India, and Chinaas well
as parts of the Middle East, Europe, and Japan
disappoint.

Growth Rate 2015


8
6
4
2
0

Growth Rate
2015

Expect continued dissonance among economic


policymakers in 2015.
Next year, the European Central Bank may embark
on its own quantitative easing over the objections
of Bundesbank.
Fights over taxing and spending will probably heat
up next year, especially in the euro zone
Germanys insistence on austerity makes it hard
for euro nations to spark economic growth

Keep an eye on things that are


unknown and important
Will Russias and Chinas clashes with
their neighbors escalate into armed
conflict?
Will the Ebola epidemic break out of
West Africa on a large scale?
Will China snuff out Hong Kongs
democracy movement?
Will British elections in May increase
pressure on the United Kingdom to
drop out of the European Union?
Any
Willone
one of
of those
the conflicts
the Middle
could in
make
East a
boil
over?
2015
very
ugly year.

Then again, there could be happy


surprises.
The oil boom is a victory
for drilling technology
U.S raised domestic
crude oil production
more than 50% in just 4
years.
Business is in a better
position to lead the
recovery
Companies are sitting on
record amounts of cash
because of the weak
demand so new

Capital
spending is the
most volatile
sector of the
economy and
often what turns

Will 2015 be the year the


Federal Reserve finally raise the
federal funds rate?
Federal Open Market
Committee expects funds rate
to reach 1.25% to 1.5%
Traders in the futures market
are skeptical, betting that the
funds rate will be only about
0.5% by then.
Devaluing is a mechanism to
push deflation abroad

the straitjacket of a single currency


prevents weaker economies from
depreciating their currencies, a way
for a nation with high labor costs to
boost its exports and juice its
economy

A sharp increase in
consumption taxes walloped
its economy this spring. A
second one is scheduled for
2015, but may seek to delay
it if the economy remains
China
weak is suffering its own
deflation
Great spending on plants and
equipment leads to excess
production capacity, which
encourages price slashing that
destroys profitability
The downward pressure on the

The world economy in


2015 could be slower
than it once was but is
moving FORWARD.

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