2016 in Figures - World Economy

CEIC Gallery/World Trend Database - Hot Topics - January 14, 2016 Summary World economy will improve in 2016 compared to the past year and global growth will increase after the slowdown in 2015. Faster economic growth is expected in the United States, Japan and Euro Area. Output gap in developed economies will shrink due to increase in investment and inflation is expected to be higher than in 2015, tough still far below the central banks’ target levels. Emerging markets will also improve – in 2015 growth in emerging countries has slowed down to less than 4%, while in 2016 the it will reach 4.5%. Prices of crude oil, natural gas and other major commodities will stabilize. However, despite the improvement compared to the past year, global growth in 2016 will remain uneven. The two major factors shaping the world economy, rising interest rate in the US and economic slowdown in China, will bring uncertainty and economic fluctuations worldwide. Federal Reserve is likely to raise interest rates at least one more time in 2016 and the markets expect Bank of England to follow Fed in interest rate hike and tighten its monetary policy. China’s stock market crashed again during the first week in 2016 and the economic growth is expected to slow down for the third consecutive year. Despite the unemployment in developed countries continues to decrease, employment remains far below the pre-crisis levels. Growth in United Kingdom will slow down and despite the slight improvement, Euro Area’s economy is still fragile. Growth in two of the major emerging economies, Brazil and Russia, is expected to remain negative in 2016. The charts below show highlights of the latest International Monetary Fund's forecasts for 2016, including: - Global Growth - Commodity Prices Data series are obtained from CEIC's Global Economic Monitor, Regional and Country Forecast datasets. Global Growth √ Global economy is expected to increase by 3.6% - the fastest pace since 2011, while in 2015 global growth has declined to 3.1% from 3.4% in 2014. Growth in advanced economies will increase for the third consecutive year from 2% in 2015 to 2.2% in 2016. √ Emerging economies will improve after five years of slower growth – in 2016 emerging economies will increase by 4.5% after less than 4% in 2015. Brazil and Russia will remain in recessions in 2016 and are expected to register negative growth for the second consecutive year. √ United States’ real GDP growth will reach 2.8% in 2016 – the highest pace since 2005. √ China’s economy growth will continue to slow down – from 6.8% in 2015 to 6.3% in 2016. Despite the forecasted inflation for 2016 is higher than 2015, the price levels in developed economies will remain below the 2-percent target. Annual inflation in United Kingdom will jump from 0% in 2015 to 1.5% in 2016 and will exceed those in the United States and Euro Area. Inflation in Japan will decrease to 0.4% in 2016 from 0.7% in 2015 and 2.8% in 2014. Commodity Prices In 2016 the overall commodity price index will decrease by 4%, from 112.3 to 107.8, while in 2015 the index has sunk by 34.5% due to the collapse of the energy prices. √ Crude oil prices have dropped by 46.4% in 2015 to USD 51.6 per barrel from USD 96.3 in 2014. However, petroleum price will stabilize at USD 50.4 per barrel in 2016 or the expected decline is 2.5% compared to 2015. √ Natural gas price will further decline by 12.6% in 2016 after the 33.4% decrease in 2015. √ Coal price has hit the bottom in 2015 and is expected to recover in 2016 - according to IMF the coal price will increase by 7% in 2016 after the 14-percent drop in 2015. √ Non-fuel commodity price index will decline by 5.4% in 2016 after the 17-percent drop in 2015. The price of industrial inputs, excluding fuel and food prices, will decrease by 6.1% in 2016, of which the largest contribution will have the price of metals, which will continue to decline sharply in 2016 by 9.4% year-on-year. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
18th January 2016 2016 in Figures - World Economy

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