The March 2015 forecast by McKinsey & Co suggests that -
- Global GDP forecasts by leading organizations range between 2.8% and 3.8% for 2015, with slightly better growth rates in 2016, well above the historical average of 1.8 % during the past 50 years.
- The somewhat rosy forecasts seem to be supported by encouraging recovery in America and Europe (barring the Greek question), buoyant growth in India and still steady, if slower growth in China, both benefiting from falling energy prices.
- Considerable risks, however, remain including oil and gas price volatility. the Russian-Ukraine imbroglio, China's slowdown, major central bank monetary policies and the Greek crisis.
Download McKinsey - The outlook for global growth in 2015
Added to the above risks, however, are systemic bubbles threatening to burst across the globe.
These include a gigantic debt bubble created by continual massive Quantitative Easing (QEs) in major economies without much deleveraging; an asset bubble worldwide as excess liquidity drives unrealistic prices in housing and stocks; an energy (read shale gas) bubble punctured by collapsing energy prices Click here; and a consumption bubble as populations age and contract.
A global "perfect storm" seems to be brewing. It begs the question whether the somewhat rosy forecasts are entirely justified.
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