Schroders Economic Infographic Sep 2015
The effects of cheap oil and a strong Dollar
Our 2015 expectations cut from 2.5% to 2.4%.
For 2016, we expect to see growth of 2.9%.
Emerging economies
Advanced economies
Decline in oil prices favours advanced
economies over emerging economies.
Low oil prices
support consumption
in the developed
world, who tend to be
oil consumers.
Low oil prices weigh
heavy on emerging
markets, who tend to
be oil producers.
Oil consumers
Stronger US
economy
supporting Dollar
particularly versus
Euro & Yen
Oil producers
Lower
energy
costs
Boost to growth for
advanced economies
$-linked emerging
economies losing
competitiveness /
depreciation elsewhere
boosting inflation
rather than growth
Lack of passthrough from
lower energy
costs to
consumers
Disappointing
performance and
a stagflationary
turn for emerging
economies
Eurozone forecast
BRICs forecast
Eurozone growth slowed to 0.3% in the second quarter from 0.4%
at the start of the year.
Germany
France
Spain
experienced lower
stagnated
led Eurozone growth
domestic demand
We predict a difficult second half of 2015 due to domestic concerns
and falling commodity prices. 2016 looks a little brighter, although still
relatively unstable.
China: shaky foundations
Weakening financial sector tied to
bursting equity bubble
Italy
continues on a sluggish
path to recovery
Greece
Q2 data bounceback
We predict an acceleration in growth for the second half of 2015 and
the beginning of 2016.
Inflation forecast has been lowered due to the sharp
decline in global energy prices.
By the first quarter of 2016, Eurozone inflation
should begin to recover again.
We expect to see the European Central Bank (ECB)
continue its quantitative easing programme until
Sept 2016.
Brazil: battered by a perfect storm
Ongoing political scandal
Depreciating local currency
Threat of a ratings downgrade
India: political deadlock a concern
A disappointing reform process
Inflation pressures remain weak therefore
more scope to cut interest rates
Russia: same old story
GDP expected to contract by 4.1%
Low energy prices hit growth
Growth expected to improve in 2016
Source: Schroders as at September 2015.
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