Economic environment in 2015
The global economy will likely grow by 2.8% in 2015, somewhat faster than in 2014 (+2.5%), with momentum coming predominantly from the United States. We presume that growth in western Europe will not accelerate further, and that China will continue its slight slowdown. In light of this, we anticipate global chemical production growth of 4.2%, marginally faster than in 2014 (+4.0%). The global economy will continue to face substantial risks. For 2015, we assume an average price for Brent crude oil between $60 and $70 per barrel and an exchange rate of $1.20 per euro.
Trends in the global economy in 2015
- Stronger growth expected for United States
- Significant upswing unlikely in E.U., Japanese and South American economies
We do not expect the economy in the European Union to grow faster in 2015 than in 2014. Growth will be supported by lower oil prices, the depreciation of the euro relative to the dollar, and the expansive monetary policy of the European Central Bank. The French and Italian economies will barely grow, however; in Germany, growth will probably match the slow pace of 2014. We assume that Spain will be able to continue its slow economic recovery. The United Kingdom is likely to keep growing vigorously, although not as much as in the previous year. We anticipate continued solid growth for the eastern E.U. countries. Our forecast assumes that the conflict in Ukraine will not escalate further and that no major new economic sanctions will be imposed on trade with Russia.
We anticipate stronger growth in the United States economy than in 2014. Leading indicators point to a continuation of the positive development of the last three quarters of 2014. The ongoing recovery of the job market and continuing low interest rates will support private consumption. Our forecast is based on the assumption that the U.S. Federal Reserve will be very careful about raising interest rates and that the new distribution of power in Congress will not lead to renewed blocking of fiscal measures.
In the emerging markets of Asia, we anticipate growth rates comparable with the high levels of 2014. We expect slower growth in China. The Chinese government will likely not implement strong stimulus measures to counterbalance the dampening effects of a slackening real estate market. By contrast, we expect higher growth in India, Indonesia and Thailand.
We assume that the Japanese economy will not grow significantly faster in 2015. Although the government does intend to delay the sales tax increase planned for October 2015, the structural reforms needed to boost growth are making slow progress and will only bear fruit in the long term.
For South America, we do not foresee widespread improvement. The Brazilian economy will no longer be weighed down by the political uncertainty surrounding the outcome of the presidential elections; nevertheless, considering the high rate of inflation, dampening fiscal effects and the lack of investment in infrastructure, strong growth impetus is unlikely. In Argentina, a settlement of the dispute with international creditors would improve access to capital markets in the medium term, however, Argentina is likely to face another year of recession.