I’ve made a few tweaks to our global GDP forecasts since we published Quarterly Strategic Outlook last month.
Some estimates for 2014 have been revised with the release of Q4 data in a number of countries including Japan and the Euro zone. Weaker than expected growth in Japan sees annual average growth for 2014 at 0%, down from our earlier estimate +0.3%. Euro zone growth ended up coming in slightly better than expected at +0.9%.
In terms of the outlook the most significant changes are for India and Brazil. Historical Indian GDP growth has recently been revised upwards which has resulted in us raising our growth forecasts too (see the post below on India’s Economic Resurgence).
That lifts emerging market growth throughout the projection period, except for 2015 where the increase in growth in India has been offset by a deterioration in the outlook for Brazil. The near-term outlook there remains challenging due to fiscal tightening, higher interest rates and a disappointing rainy season. Possible power rationing may yet push the Brazilian economy into recession this year.
We continue to see global GDP growth to be modestly higher this year at 3.5%, up from 3.3% last year. A further modest improvement to 3.8% is expected in 2016.