Global economy will be significantly weaker in 2015: report

The global economy shows signs of weakness with significant downside risks, some of which are likely to materialise next year and leave the world economy in worse shape than in 2014, a top Qatari bank has warned.
"Looking back, our expectations for 2014 were for a moderate recovery in the world economy that would enable an orderly exit from US Quantitative Easing (QE) and a resumption of global growth to its pre-crisis levels. The reality turned out to be quite different," the report by Qatar's QNB Group. said.
Overall global growth in 2015 is likely to be significantly weaker than in 2014. If our predictions materialise, it is more likely that the global economy will expand only by 1.5 to 2 per cent, the report said.

The US recovery has been uneven in 2014, with negative growth in the first quarter, followed by two quarters of rapid growth. The Eurozone's initial recovery fizzled, leaving the common currency area near recession and at risk of deflation.
According to the report, emerging markets (EMs) continued to slow amid falling commodity prices and uneven policy responses. Growth in the Gulf Cooperation Council (GCC) and Sub-Sahara Africa (SSA) remained strong on high infrastructure spending.
However, the recent sharp decline in oil prices casts a shadow on the growth momentum going forward.

Weaker-than-expected global growth has led to a further sharp fall in commodity prices. The IMF Global Commodity Index has fallen by 17.4 per cent in the twelve months to November 2014, reflecting a 23.2 per cent decline in fuel prices and 5.8 per cent decline in other commodities, it said.

The report predicts that the US Federal Reserve (Fed) will not increase policy rates in 2015 and the Eurozone will enter deflation and another recession.
It also forecasts that China's growth momentum will go down amidst a strong risk of deflation.
Noting that several oil-exporting EMs are likely to be pushed into a balance of payments crisis, the report said lower commodity prices and a weaker global economy will inevitably imply a slowdown in the strong growth momentum in the GCC countries and oil-exporting SSA countries.