Global Economy Growth Rate of 3 Percent or Slightly Higher Expected in 2015

IHS Top-10 predictions foresee momentum in global economy to improve during 2015 on positive fundamentals

The global economy is expected to expand at a rate of 3.0 percent or slightly higher in 2015 after three years of global growth stuck in the 2.5 percent range, according to a forecast from Nariman Behravesh, chief economist for IHS (NYSE:IHS), the global leader in critical information and insight.

Solid and improving growth in the United States and a slight pickup in the pace of Eurozone economic activity contribute to the moderately upbeat assessment, Behravesh said. Other contributors, he said, are much lower oil prices and more monetary stimulus—in particular, from the Bank of Japan (BoJ), the European Central Bank (ECB), and the People’s Bank of China (PBoC), “which will not only support growth, but could also provide the basis for some upside surprises.

“Unfortunately, many of the downside risks that have plagued the global economy since the end of the Great Recession remain in place, including high public- and private-sector debt levels, corporate risk aversion, and daunting geopolitical risks,” he added.

The global growth outlook for 2015 is included in Behravesh’s annual Top-10 Economic Predictions, which were released today.

The U.S. economy will continue to outperform other developed economies in 2015, the forecast said. U.S. growth will be solid, in the 2.5–3.0 percent range, on the strength of domestic demand. Strong jobs growth, improved household finances (the best since the early 2000s), and low gasoline prices will result in consumer spending growing at a rate of about 3 percent for the next two to three years. Consumer spending accounts for nearly 70 percent of GDP.

The Eurozone recovery will proceed at a sluggish pace, with the highlight of the region being robust UK growth. The Eurozone will experience a very modest acceleration of growth of 1.4 percent, even though significant problems, such as worrying labor markets, still persist. However; the UK economy will post solid growth in the 2.5 to 3.0 percent range in 2015.

Japanese growth will move back into positive territory in 2015 -although only to about 1 percent -on the supportive policy moves by the Bank of Japan combined with lower oil prices and a weaker yen.

Central banks will go their separate ways in 2015: The Fed, Bank of England and Bank of Canada are expected to raise rates in 2015—in June, August, and October, respectively. In contrast, the ECB, BoJ and PBoC are on track to either cut interest rates and/or provide more liquidity via asset purchases and other means.

The other Top-10 predictions include:

China’s growth rate will decelerate more, but remain stronger than most at 6.5 percent in 2015.
Most emerging economies will see stronger growth in 2015 with India, Indonesia, Malaysia, the Philippines, Colombia, Peru, and Kenya doing particularly well. On the other hand, Brazil will see disappointing growth in 2015 and Russia’s economy will likely contract.
Oil prices will stay low in 2015 and commodity prices are likely to slide more—around 10 percent on average.
Deflationary worries persist in developed economies; inflation will be a threat in emerging markets that experienced sharp drops in exchange rates.
The U.S. dollar will rise against most currencies, while the euro and yen will fall.
Downside risks will be balanced by some upside risks. Hindrances to growth are easing in some countries, notably the U.S. and the U.K.; easing fiscal drag and better credit conditions will also help the growth prospects in the Eurozone and Japan in 2015.

For 2014, IHS forecast that global growth would accelerate slowly in 2014; weak first-quarter growth was followed by stronger growth as 2014 progressed, as predicted. In all, 9 out of 10 IHS predictions for the year were on the mark.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs more than 8,000 people in 31 countries around the world.

IHS Inc.Kate Smith, +1 781-301-9311kate.smith@ihs.comorPress Team+1 303-305-8021press@ihs.com

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