Faltering Recovery of the World Economy

Following a weak start into 2015, the global economy is expected to pick up again in the course of this year. Average annual world output growth will nevertheless remain sluggish at 3.4 percent on a purchasing power parity weighted basis, before accelerating modestly to 3.8 percent next year. The improvement will be driven by stronger growth in the advanced economies where ultra-low interest rates and continued monetary expansion are expected to increasingly gain traction given that private sector deleveraging has gone a long way in a number of important economies. By contrast, we do not expect a significant acceleration of output growth for the emerging economies where structural impediments abound and lower commodity prices have reduced export revenues in many countries.