The global economy was growing moderately at the end of last year, but the pace of the expansion slowed to a 14-month low, according to the December update of the JPMorgan Global All-Industry Output Index. “The underlying dynamics of the survey are weaker across the board, with indices for output, new orders, backlogs and employment all tracking lower,” the press release noted. But if this is a prelude to a global recession in the year ahead, it’s not obvious to a number of widely followed forecasting groups.
The world economy will expand 3.1% this year, based on the median of seven influential forecasts from a variety of sources–including today’s revised outlook from the IMF. The median projection for the year ahead is moderately above the 2.7% estimate for 2014.
The most optimistic forecast for 2015 is the IMF’s outlook for 3.5% growth in 2015, which is well above the 2.9% prediction from the Economist Intelligence Unit, the smallest estimate for this year in our selective survey of projections. But while minds differ as to how fast global GDP will expand in 2015, all the projections in the table above are united in the belief that the world economy will grow at a moderately faster rate vs. 2014’s estimated pace. (For a closer look at the forecasts, see the links below.)
The dark art of looking into the future comes with all the usual caveats, of course, especially when trying to divine the trend for a full calendar year in advance. Meanwhile, in the here and now, there are no shortage of risks that could derail the current outlook for modest growth. In particular, Europe’s sluggish growth and ongoing battle with deflation may throw a wrench into the global growth machine. But for the moment, the consensus view calls for a slightly faster rise in output for the year ahead relative to 2014’s increase.