Download World Economic Situation and Prospects 2015 Global growth: marginal improvement in 2015-2016

World Economic Situation
and Prospects 2015
Presented by
Aynul Hasan
Officer-in-Charge
MPDD, ESCAP
January 19, 2015
1
5
Global growth: marginal
improvement in 2015-2016
4.3
4.3
4
WESP 2014
3
3.1
3.0
2
2.4
2.5
2.6
2012
2013
2014
3.3
1.8
1
0
2007
2008
2009
2010
2011
2015
2016
-1
-2
-1.7
2
1
Trends in the world economy for
2015-2016
•
•
•
•
•
•
•
•
Global growth: a more moderate normal path?
Employment: starting to improve
Inflation: generally benign
World trade: lack of momentum
Commodity prices: on a downward trend
International capital flows: volatile
Exchange rates: US dollar appreciating
Global imbalances: some new development
3
Low growth as the new normal?
%
4
2
Unemployment remaining
elevated in some countries
30
%
25
20
France
Germany
Portugal
Spain
United States
15
10
5
0
Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014
5
Inflation remains benign in most
parts of the world
%
6
3
Trade flows growing at sluggish
pace, far below trends
7
Commodity prices trending
downward
8
4
Net private capital inflows to
EM moderating
% of GDP
9
External financing costs for
EM remain low
10
5
Global imbalances narrowing
11
Uncertainties and risks
• Anticipated change in US interest rates
• Remaining fragility in the euro area
• Vulnerability in emerging economies
• Geopolitical tensions
12
6
Policy challenges
•
•
•
•
•
•
High dependency on monetary policy
Policies for strengthening jobs
International trade needs a boost
Promote infrastructure investment
Coordination to mitigate spillovers
International policy cooperation for:
tax matters
financial reforms
increased ODA to the LDCs
13
Developed economies:
US leads the recovery
6
4
2
0
-2
-4
-6
-8
USA
2008
European Union
2009
2010
2011
2012
Japan
2013
2014
2015
201614
7
Developing countries:
a more diverse growth picture
10
8
6
4
2
0
-2
Africa
East Asia
2008
2009
South Asia
2010
2011
2012
Western Asia
2013
2014
Latin America
and the
Caribbean
15
2015
2016
Economies in transition:
subdued growth prospects
6
4
2
0
-2
-4
-6
-8
South-Eastern Europe
2008
2009
2010
2011
CIS and Georgia
2012
2013
2014
2015
16
2016
8
East Asia: robust growth outlook
• Stable growth projected for 2015/16
– East Asia remains fastest-growing world region
– Average GDP growth projected at 6.1% in 2014 and 2015 and
at 6.0% in 2016
– Gradual slowdown in China expected to be largely offset by
stronger growth in other parts of region
– Pick-up in growth in Indonesia and Viet Nam, moderate crisis
recovery in Thailand and growth surge in Papua New Guinea
– Lower-income countries continue to outpace the high-income
economies
17
East Asia: robust growth outlook
• Domestic demand remains key driver of growth
– Strong household consumption based on subdued inflation,
robust labour markets and low real interest rates
– Investment projected to generally strengthen, supported by
Government programs
– External demand remained fairly weak in 2014 – mild
improvement expected for 2015/16
– Fiscal policy remains mildly supportive of growth
– Recent divergence in monetary policies – more tightening
likely in later part of forecast period
18
9
East Asia: country growth outlook
Annual GDP Growth in 2014 and 2015, selected
economies (in %)
7.3
7.0
China
6.4
6.1
Philippines
6.1
6.1
East Asia
5.8
Vietnam
6.3
5.7
Malaysia
5.3
5.1
5.4
Indonesia
3.5
3.4
3.4
3.6
Taiwan
Republic of Korea
2.8
Singapore
3.3
2.2
Hong Kong SAR
2.5
1.1
Thailand
0
1
3.9
2
3
4
2014e
5
6
7
8
2015f
19
East Asia: inflation has trended
mostly lower
Consumer Price Inflation (y-o-y, in %)
10
9
8
7
6
5
4
3
2
1
0
Jan‐12
Apr‐12
Jul‐12
China
Oct‐12
Jan‐13
Indonesia
Apr‐13
Jul‐13
Republic of Korea
Oct‐13
Jan‐14
Philippines
Apr‐14
Jul‐14
Oct‐14
Thailand
20
10
East Asia: downside risks
• Fragility of the global economy
– Renewed crisis in euro area or Japan → lower external demand
– Rise in US interest rates could lead to rapid adjustment in
global liquidity and new financial turmoil
→ tighter domestic credit conditions, weaker internal demand
→ esp. relevant for countries with high household/corporate
debt or property market bubbles
• Sharper-than-expected slowdown in China
– Risks associated with shadow-banking and high leverage
– Strongest impact on commodity exporters and major trading
partners
21
South Asia: moderately optimistic
outlook
• Regional growth projected to pick up in 2015/16
– Average GDP growth projected to accelerate from 5.0% in
2014 to 5.3% in 2015 and 5.7% in 2016
– Recovery expected to be led by India
– Domestic demand supported by improved macroeconomic
conditions (lower inflation, fiscal and current account deficits...)
– External demand projected to be robust, but risks remain
(Euro area, East Asia)
– Cross-country differences continue to be large
22
11
South Asia: impediments to
growth
• Despite recent progress, serious growth
bottlenecks/macroeconomic imbalances remain
– Energy and transport constraints
– Political uncertainties and security concerns
– Low productivity in agricultural and segments of service
sector
– Still sizeable fiscal and current account deficits in some
countries
23
South Asia: country growth outlook
Annual GDP Growth in 2014 and 2015 (in %)
7.8
Sri Lanka
7.5
6.2
6.4
Bangladesh
5.4
India
4.9
South Asia
5.9
5.4
5.1
5.0
Nepal
4.2
4.1
Pakistan
2.0
Islamic Republic of Iran
2.5
0
1
2
3
2014e
4
5
2015f
6
7
8
9
24
12
South Asia: inflation has decelerated
considerably
Consumer Price Inflation (y-o-y, in %)
14
12
10
8
6
4
2
0
Jan-12
Jul-12
Bangladesh
Jan-13
India
Jul-13
Jan-14
Pakistan
Jul-14
Sri Lanka
25
South Asia: downside risks
• Fragility of the global economy
– Renewed crisis in euro area or sharper-than-expected
slowdown in China → lower external demand
– Abrupt decline in global liquidity and new financial turmoil
→ tighter credit conditions, slower domestic demand
• Regional and country-specific weaknesses
– Agricultural dependency on monsoon
– Volatile security conditions (esp. Pakistan)
– Uncertainties over political developments (e.g. Islamic
Republic of Iran)
26
13
Thank you
27
14