Underlying Economic Conditions
According to the IMF, global economic growth will be slightly stronger in 2016 than in the previous year. The IMF expects world GDP to expand by 3.4 percent this year (2015: 3.1 percent) and by 3.6 percent in 2017. According to the Fund, emerging markets will make the biggest contribution to growth in 2016 with a gain of 4.3 percent. Advanced economies, for their part, will increase their output by 2.1 percent.
US Economy with Robust Growth
The OECD expects the USA to continue growing robustly over the next two years. Factors sustaining momentum there are the reindustrialization of the US economy, gains in employment and higher consumer spending. The OECD forecasts growth of 2.0 percent in the year ahead and 2.2 percent in 2017.
GDP Trends in 2016
Sources – worldwide: IMF; Asia: ADB; China: ADB; India: ADB; Japan: OECD; USA: OECD; Europe: OECD; Germany: IMF
Growth Prospects in Asia Remain Good
In 2016, Asia will increase its economic output at a rate similar to the year before. According to the Asian Development Bank (ADB), Asian economies will expand by 6.0 percent compared with 2015. Though the days of double-digit growth are over in China, the economy is still expanding at a high single-digit percentage rate, and the ADB expects to see growth of 6.7 percent. The OECD anticipates growth of 6.2 percent in 2017. In India, strong domestic demand is providing new impetus to the country’s economy. The ADB estimates that GDP in India will climb by 7.8 percent in 2016. Forecasters also expect the Japanese economy to pick up pace again slightly in 2016, after its weak advance last year. The OECD predicts 1.0 percent year-over-year growth, with 0.5 percent in 2017.
European Recovery to Continue in 2016
Europe will continue to recover in 2016, according to the IMF. However, growth will remain burdened by the debt crisis, by fiscal consolidation in certain countries and by too little capital spending. The IMF projects a GDP gain of 1.7 percent for eurozone countries in 2016, with growth possibly also at 1.7 percent in 2017. The IMF expects Germany to grow by 1.7 percent in both 2016 and 2017. Ongoing low inflation and rising real wages have been bolstering household consumption and are having a positive impact on growth.