Cheaper Oil doesn’t mean faster Growth

Even with the sharp oil price decline – a net positive for global growth – world economic outlook is still subdued, weighed down by underlying weakness elsewhere,” says the IMF’s latest WEO update. As a result, global growth is forecast to “rise moderately” from 3.3 percent in 2014 to 3.5 percent in 2015, revised down by 0.3 percent. In advanced economies, growth is projected to increase to 2.4 percent in both 2015 and 2016, though the divergence between the robust growth of the United States (+3.6 percent) and the weaker one of Japan and Europe (+1.2 percent) will deepen. In emerging market and developing economies, growth is projected to remain broadly stable at 4.3 percent in 2015 despite weaker growth rebound for commodity exporters, the growth slowdown of China that has been marked down to just below 7 percent – the weakest pace since 1990 – and the negative Russia’s economic outlook whose growth forecast has been downgraded to -3.0 percent.