Eric Chaney AXA's Group Chief Economist

Global economy: the 2015 outlook

The key drivers that are going to shape 2015.
Jun 1, 2015

The 2015 outlook

Global growth: Upside risk to 2015 global GDP forecast (3.4%), circa 0.4pp if crude oil price stabilises at $65/bbl (-35% in 2015 on an annual basis.

Oil price slump: 'good' deflation; helps closing output gaps but fuels deflation expectations; pitfall: lower carbon price, disincentive to innovate

Monetary policies: real interest rates are rising; expect lasting dovish policies

US: consumers energized by lower gasoline price, companies willing to spend, fiscal policy neutral. The Fed will start normalising in 2015, despite low inflation

China: growth paradigm shifting toward'new normal', i.e. slower but sustainable growth; monetary and FX policy actionable tools to fend off deflation risk

Euro area: 2015 recovery helped by cheap oil. ECB's balance sheet strategy is facing obstacles, fiscal stimulus needed but unlikely so long as France and Italy are reluctant to reform their labour markets

Japan: only 'first arrow' has worked so far; Abenomics re-energised by electoral victory; the long term stake is very high: avoiding a financial collapse

Emerging markets: rocked by liquidity shortfall (less petrodollars / Fed action); lower oil price is revealing weaknesses but is a boon for importers