In its 2015 outlook for the global economy, the Global Investment Research team of investment bank Goldman Sachs (GS) forecasts “accelerating growth, with marked divergence between regions.” With the United States as a frontrunner whose growth could jump 0.9 point, fall in oil prices and low interest rates should keep the European Union and Japan in positive territory although their figures will pale in comparison with China’s 7%. What is more, with a 2.2% forecast, developed markets will do twice less than their emerging counterparts with 4.9%. All this in spite of ECB’s and BOJ’s easing monetary policies whereas the Fed has terminated its Quantitative Easing (QE) program weeks ago, a difference which GS labelled the “great divergence”.
Low oil prices should fuel the drop in prices, prompting increased activism against deflation risks, while the USD should strengthen further. Shocks from Euro area and China will still be the big risks, warned GS that also described investing in the 2015 major asset classes as “living in a low-return world”. It means that 2015 will be a year of careful and selective investment picking. Cyceon noticed that GS forecast Russia’s economic growth would increase from 0.3% to 1% in 2015, and yet with current low oil prices at approx. $65/69, it seems highly unlikely. Actually the main question of 2015 could be: is the “great divergence” an underestimated and direct threat to US growth?