SSGA - Weekly Economic Perspectives

Quarterly Forecast Issue
- The global economy continues to grow sluggishly (Figure 1). World inflation remains stable. And monetary policy finally decouples in the G7, with policy rates rising in the US and the UK.

- Global growth slowed to 3.4% in 2012 and has stayed near that pace since. It is expected to remain in the 3.1%-3.4% range next year, making 2016 the fifth consecutive year of below-average growth.

- Headline inflation in the advanced economies decelerated sharply this year because of the drop of oil prices in the second half of 2014. It reaccelerates next year as oil prices stabilize.

- Monetary policy begins to decouple, with administered interest rates rising steadily in the US and more modestly in the UK, but remaining unchanged in the other major economies.

- The risks are that global growth will be slower, world inflation lower and US monetary policy easier.