A ‘new normal’ of structurally lower economic growth rates has emerged in 2015 according to the latest Atradius biannual economic outlook report.
Global economic conditions have weakened over the six months since the last report, despite the acceleration of growth in the Eurozone and the positive impact of low oil prices on many countries. Although growth is forecast to rise slightly next year, it will remain modest from an historical perspective.
The report suggests that this indicates a ‘new normal’ of lower potential growth in both advanced and emerging markets, as a result of ageing populations, a slowdown in the application of new technologies and lower investment.
Global economic growth is forecast to remain modest at 2.7% in 2015, the same rate as last year. While there are some indications of an increase in this rate next year, it will only be a modest rise.
In Europe, the Eurozone recovery is gaining strength with 2015 growth forecast at 1.5%. The US economy is predicted to expand by 2.9% this year and Asia’s economy, excluding Japan, is forecast to grow more rapidly at 6.1%.
In contrast Eastern Europe and Latin America face a more difficult year with economic growth of -0.4% and 0.5% respectively – though some recovery is predicted in 2016.
Global trade growth is similarly expected to remain low compared to pre-2007 rates with a forecast increase of 3.3% this year, rising to 4% in 2016.
Marc Jones of Atradius said: “Six months ago, global growth was expected to pick up in 2015, but at this point, we can expect growth only to be flat this year and to not recover until 2016.
“The outlook for the business climate across the globe is mixed at best. For 2015 we’re forecasting insolvencies to fall 7% in the Eurozone, most strongly in Spain and the Netherlands. Conditions in the US and UK are expected to improve as well. In contrast, many of the most important emerging markets such as Brazil, Russia and China are projected to face increasing insolvencies, albeit from a relatively low level. Overall the business climate is likely to remain difficult with global growth expected to remain modest this year and into 2016.”
