A salient feature for major developed countries during 2014 has been the erratic movements
in their quarterly GDP growth rates. For example, the economy of the United States oscillated
from a decline of 2.1 per cent in the first quarter of 2014 to an increase of 4.6 per cent in the
second quarter, while the economy of Japan swung from a growth of 6.0 per cent to a sharp
fall of 7.1 per cent. For the year as a whole, as projected in the previous LINK GEO, all
major developed economies in North America, Europe and developed Asia have indeed
aligned together on the same upward growth trajectory in 2014 for the first time since 2011.
Although the discrepancy in the growth rates of these economies has narrowed from the
previous year (figure 3), the growth picture remains diverse: while the United States has
managed to maintain an annual growth rate above 2 per cent in 2014, the economic situation
in Europe is precarious, particularly in the euro area, where a number of euro members
teetered on the brink of falling back into recession. Meanwhile, in Japan, the momentum
generated by a fiscal stimulus package and monetary easing introduced since 2013 has
tapered off. In the baseline outlook, further improvement is expected for developed countries,
with growth projected to be 2.1 and 2.5 per cent for 2015 and 2016, respectively, compared
with the 1.6 per cent estimated for 2014. However, downside risks remain significant,
especially in the euro area and Japan, which have seen renewed weakness in 2014.