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World economic outlook: Global economic growth or stagnation?

World Economic Outlook

Each year the financiers publish shocking predictions and assumptions for next year, the so-called "black swans". Any of these events could flip the economy worldwide, but the probability of their implementation is low: the huge numbers of frightening predictions don’t come true.

Experts assumed a rise respectively by 3.3 and 3.6% in November.

Long-term average annual economic growth​ all around the world is about 3.75 per cent, says the report.

World Economic Outlook: What turmoil could threaten the worldwide economy in 2016?

The rate of economic growth​ in 2015 was very low (the lowest one in many years), and during this year it is not expected to accelerate.

Despite the difference in their published assessments, plenty of financial institutions believe the world economy to be recovered slowly.

Some weeks ago the forecasts for economic growth of the country in 2015 were downgraded to 1.8-2% from 2.3% and 2.7%, which were expected in March. Europe is reeling from unresolved "Greek problem". Athens is one step away from default and exit of the country from the Eurozone. The GDP growth forecast of China's economy in 2015 is surely expected by analysts, for the first time in the last 20 years to slow to 7%.

"Expectations of growth seem to be falling constantly," said our financial expert. Are we really going to have a disastrous year? Or we just have to accept the challenge?

At the same time, the GDP growth forecast for China in 2016 remains at the level of 6.5% and 6.2% in the next year.

The economy in India is supposed to grow by 7.4% in comparison with November assessment at 7.3%.

The drop in Brazil's GDP in 2016 will amount to 4%, and next year will not bring any changes in this sad situation, as being already predicted. Previously, it was expected, respectively, a decrease of 1.2% and both a rise of 1.8%.

"The risks of financial instability are significant, as shown both by the recent drop in prices all around the world and increased vulnerability of some emerging markets", - as it was stated in the message.

The rise of the global economy is almost all right, according to the statements of many experts.

Here are some questions that still remain without the clear answer: Should we expect rate hikes by the Fed this year? What will happen to the EU economy in the event of a Greek default and its exit from the Eurozone? How will the debt problems of Greece be reflected in General on the global economy? How the emerging markets will react at the long-term stagnation trends of the economy?

All this will become clear soon.

By Chieffinancing 25.07.2016

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