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[IWS] McKinsey: THE OUTLOOK FOR GLOBAL GROWTH IN 2015 [March 2015]
IWS Documented News Service
Institute for Workplace Studies-----------------Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor--------------------Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
NOTE: Funding for this service ends on 31 March 2015. Postings will end on this date as well.
McKinsey & Company
The outlook for global growth in 2015 [March 2015]
Despite tempered expectations, most forecasters see strong growth ahead, accelerating in 2016. As our Global Economics Intelligence team reports, executives are focusing on divergent opportunities.
byLuis Enriquez, Ina Kota, and Sven Smit
Leading forecasters estimate that the world economy will grow by between 2.8 and 3.8 percent this year—about one percentage point lower than last year’s consensus forecasts. Yet as monitors of the global economy lower their expectations for 2015, executives are increasingly focusing on opportunities presented by diverging growth rates among regions, countries, and even sectors. This means an essential element of strategic and financial planning for 2015 and beyond is taking closer account of critical regional trends and risks, with sensitivity to key economic indicators and government policy responses.
McKinsey’s Global Economics Intelligence (GEI) team closely tracks forecasts of leading financial institutions and multilaterals. By the latest estimate of the International Monetary Fund (IMF), in October 2014, world GDP growth was measured at 3.3 percent for 2014.1 For 2016, the IMF and other organizations have lowered previous global GDP growth projections to 3.1 to 4.1 percent (Exhibit 1). Most forecasters expect a robust US economy to continue to lead the way, and the eurozone’s new program of quantitative easing is a sign the region is ready for expansion. And while falling oil prices weigh heavily on growth prospects for commodities-dependent Brazil and Russia, China and India are benefiting from easing inflationary pressures.
Market volatility is being stoked in part by the steep decline in oil prices, which will adversely affect oil producers while benefiting consumers. Although the net impact of the lower prices will differ by country, a very rough estimate of the potential consumer savings is nearly $450 billion,2 which represents a considerable transfer of wealth from producing to consuming countries.3 In addition, while executives were confident about their own companies, “geopolitical instability” was cited as the leading risk to global growth in McKinsey’s global survey of nearly 1,700 business leaders at the end of 2014
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