Having grown at a moderate rate in the first half of 2015, the global economy lost momentum in the second half of the year. Growth in the developing and emerging economies slowed for the fifth year in succession. Especially the turmoil in the Asian financial markets and uncertainty about the state of the Chinese economy impeded global economic output. Additional negative economic impacts included the conflicts in the Middle East and restrictions imposed on trade with Russia. While low oil and commodity prices are beneficial to economies with strong manufacturing and consumer bases, they are detrimental to the growth prospects of commodity-exporting countries such as Russia and Brazil. Economic recovery in the United States remains on track, but growth in the EU member states proved to be weaker than expected. The International Monetary Fund (IMF) estimates that the world economy grew 3.1 percent in 2015 (2014: 3.4 percent), falling short of expectations. Last April, the IMF had still been expecting 3.5-percent growth.
GDP Trends in 2015
Sources – worldwide: IMF; Asia: ADB; China: National Bureau of Statistics; India: Central Statistical Office of India; Japan: IMF; USA: IMF; Europe: IMF / OECD; Germany: Federal Statistics Office
Asian Growth Slows Further
Growth in Asia weakened in 2015. Nevertheless, the Asian economies are still reporting the world’s highest growth rates, with data from the Asian Development Bank (ADB) indicating an overall rise in gross domestic product of 5.8 percent (2014: 6.3 percent). In China, the government was forced to intervene several times during the year with fiscal measures to shore up the capital markets and support economic and export activity. According to figures of China’s National Bureau of Statistics, the People’s Republic grew at its slowest rate since 2009, with GDP increasing by 6.9 percent (2014: 7.2 percent). In the ADB’s opinion, reduced demand in China impeded growth in other Asian countries as well. However, China remains a key growth engine for the region. India’s economy continues to grapple with infrastructure deficiencies, while major structural reforms that could stimulate growth are slow in taking hold. According to the National Bureau of Statistics, the country’s gross domestic product rose 7.6 percent (2014: 7.3 percent), primarily because of strong domestic demand. In Japan, positive trends at the start of the year gave way to unexpected weakness in consumer and investment spending, which, combined with low exports, took its toll on the economy in the second half of the year. Based on IMF forecasts, Japan’s GDP grew only 0.6 percent (2014: –0.1 percent).
US Economy in Good Shape
In the USA, the economy got off to a slow start because of the long winter, but picked up momentum as the year progressed. Supported by rising household consumption, falling unemployment and cheap crude oil, US gross domestic product grew by 2.5 percent in 2015 according to the IMF (2014: 2.4 percent). However, the strong dollar remains a burden on exports.
Eurozone Grows Moderately
The economy in the eurozone once again grew moderately in 2015, with countries such as Spain, Ireland and Italy posting higher-than-expected growth rates. The fall in the price of crude oil, lower interest rates and the weak euro had a positive impact on industrial production in the eurozone in the first half of the year. On the other hand, the consequences of the debt crisis, high unemployment and low investment spending held back economic growth. According to OECD and IMF estimates, GDP in the eurozone rose 1.5 percent (2014: 0.9 percent).
Stable Growth in Germany
The German economy continues to grow, albeit not quite as strongly as expected. But Germany is still Europe’s main growth engine, fueled mainly by exports and strong domestic demand. The employment market remains in good shape, inflation rates are still low, and real wages have been rising – all of which have bolstered household consumption. Data issued by the German Federal Statistics Office show that GDP increased by 1.7 percent (2014: 1.6 percent).