It's all connected. From interest-rate hikes in the US to the Greek debt crisis, events within nations affect economies across the globe. A June report from analysts at Nomura Securities broke down all the changes happening and the prospectus for a variety of important economies. According to the report, the US should continue its slowing rebound leading to a Fed rate hike in September, while continued low oil prices should prolong Canada's slump. In Europe, the European Central Bank faces serious pitfalls as it tries to strengthen the Eurozone and is projected to continue asset purchases into September 2016. Analysts are worried that the UK will react too slowly in raising rates which could lead to another crisis. Asia remains the home to the strongest emerging markets despite the slowdown in Chinese growth. The developed countries of the continent are going in separate directions. South Korea and Australia have weakening economies, while Japan and India are heading in the right direction. In total, global GDP growth is expected to reach 3.1% in 2015, down from 3.3% in 2014. Global consumer inflation should also slide to 3.2% this year, from 3.6% in 2014.United States Projected Real GDP Growth 2015: 2.0% 2016: 2.5% Projected CPI Growth 2015: 0.4% 2016: 2.2% Commentary: The positives should generally outweigh the negatives and steady growth is expected. "We continue to expect the economy to accelerate in Q2, but we do not foresee a breakout in growth, as the economy still faces headwinds," said Nomura analysts. A full takeoff will be limited by the dragging oil industry and suppression of exports because of the strong dollar. Expectations are for a September interest rate increase by the Fed and continuing increases of 25bp per quarter. Source: Nomura Canada Projected Real GDP Growth 2015: 1.4% 2016: 2.0% Projected CPI Growth 2015: 1.1% 2016: 2.1% Commentary: The steep drop in oil prices is continuing to take its toll on the Canadian economy, as evidenced by a 0.6% contraction in GDP during Q1. This uncertainty has seeped into Canadians' spending habits. "Household spending was quite weak on the quarter and has surprised some, as it should have been supported by lower gasoline prices. The increase in the saving rate suggests that could be linked to increased uncertainty on the economic outlook as a result of the oil price shock," said the report. It also noted that business investment and exports are expected to stay weak. Source: Nomura United Kingdom Projected Real GDP Growth 2015: 2.1% 2016: 2.6% Projected CPI Growth 2015: 0.2% 2016: 2.0% Commentary: The rate of growth has consumed almost all the spare capacity in the economy and coupled with a growing number of households in debt points to possible problems ahead. Nomura analysts expect a rate hike from the Monetary Policy Committee to come in February 2016, but it might come too late. "UK stimulus is utilizing spare capacity rapidly. Failure of policy to respond is sowing the seeds of the next crisis," said the report. Source: Nomura See the rest of the story at Business Insider
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