Bumpy year ahead, but global growth to be higher: EIU

SYDNEY – At presentations in Singapore, Hong Kong and Sydney, Daniel Franklin, Executive Editor of The Economist, has forecast a bumpy year ahead. He says the fastest-growing economy in the world in 2015 will be Papua New Guinea, where GDP will expand by nearly 15%. China will drop its growth target to 7% (from 7.5%), and global growth will be higher in 2015 (3.8%) than in 2014 (3.2%).

He says Singapore tops the Economist Intelligence Unit's global business environment rankings for 2015, and that business should watch out for Xiaomi, a Chinese mobile-phone maker, as it continues its meteoric rise and goes global. ” And expect a welcome return, at least in some places, to the nine-to-five culture in the workplace.” 

In the US and Britain, where growth is relatively robust and unemployment is coming down, interest rates will start to rise in 2015, ending a long period of ultra-low rates. In the Eurozone and Japan, by contrast, central banks will continue to ease monetary policy, to battle against deflation.” The diverging paths of the main central banks will lead to more volatility in equity, bond and currency markets.”

Franklin says it will be a year of striking "crossovers", as America overtakes Saudi Arabia to become the world's biggest oil producer, China overtakes America to become the world's biggest economy (measured at purchasing-power parity), and Facebook overtakes China in terms of its "population" (1.4 billion active monthly users).

In politics, Britain will have another hung Parliament after its general election in May, with David Cameron probably remaining Prime Minister. But Canada's leadership is likely to change hands in an October election, with the Liberals' Justin Trudeau taking the helm. www.economist.com (ATI).