This summer, the global business climate was shaken by events in Greece and China. Despite evidence of economic strength in the US and a continuing recovery in Europe, China’s slowdown has raised many questions about the overall global economic outlook.
In the latest edition of Deloitte’s Global Economic Outlook, economists examine these issues and provide their outlook.
Alexander Börsch writes about the state of the eurozone economy and says the recovery is now broad based and that Europe appears able to withstand the negative consequences of a Chinese slowdown.
Ira Kalish looks at the debate over exactly how much the Chinese economy has slowed; the policy response to the slowdown; the relevance of China’s equity bubble and its bursting; the decision to devalue the currency and its implications; and the global impact of a slower-growing Chinese economy.
Next, Patricia Buckley discusses the relatively benign state of the US economy. She notes that, just as things seem to be going reasonably well, there remains a potentially disruptive impact from political conflict involving the budget and the debt ceiling.
China’s slowdown has raised many questions about the overall global economic outlook
In his article on Japan, Ira Kalish discusses the continuing weakness of the economy despite the massive programme of quantitative easing.
Next, Rumki Majumdar examines the Indian economy. She discusses the relatively strong growth of late and also looks at the controversy over the best way to measure India’s economic performance.
In his article on Brazil, Akrur Barua discusses the poor state of the Brazilian economy, the factors that led to a recent bond rating downgrade, and the potential consequences of that action, which include higher borrowing costs, more capital outflows, downward pressure on the currency and greater difficulties in addressing Brazil’s serious fiscal imbalances.
The British economy is the subject of Ian Stewart’s analysis. He notes that although problems in the global economy are having some negative impact on the UK, the domestic side of the economy is doing well.
In the next article, Danny Bachman analyses the Canadian economy. Despite two consecutive quarters of declining GDP in the first half of this year, Mr Bachman does not believe that Canada has fallen into recession. Rather, the Canadian economy has slowed owing to troubles in the oil industry and their considerable negative impact on business investment.
The South African economy is the subject of Lester Gunnion’s article. The economy is heavily dependent on commodities, and thus the slowdown in China and the rise of the US dollar have had a negative impact on South Africa.
In the first of the two special-topic articles, Majumdar writes about the degree to which emerging markets are well prepared to deal with economic shocks.
In the last article, Barua, David Gruner, and Sunandan Bandyopadhyay examine global value chains (GVCs), a key component in today’s international trade ecosystem.
The Deloitte Global Economic Outlook Q4 2015 may be downloaded from http://www2.deloitte.com/mt/geo.