For heavily commodity-dependent economies, the short-term growth prospects have worsened considerably. In some cases, this has been amplified by large capital outflows and by persistent domestic weaknesses, including macroeconomic imbalances, social and political unrest, and inefficient economic management. On the other hand, large commodity-importers have benefited from lower prices in the form of reduced inflationary, fiscal and balance-of-payment pressures, improving the short-term growth outlook for many of these countries. As some of the current headwinds start to recede, growth in developing countries and economies in transition is projected to gain some strength in 2016.
The prospects for developed economies in 2015 have been slightly upgraded from earlier forecasts, with average growth projected to accelerate from 1.6 per cent in 2014 to 2.2 per cent in 2015. Almost all major developed economies are expected to see the growth momentum picking up. The upward revision reflects a moderately improved outlook for the euro area owing to a number of factors, including lower energy prices and significant currency depreciation on the back of the European Central Bank’s (ECB’s) new large-scale asset-buying program. Despite expectations of a more robust recovery, developed economies continue to face considerable headwinds from the legacies of the global financial crisis, including subdued employment levels, elevated private and public sector debt, and financial sector fragilities.