Debt Accumulation and Deleveraging Shaping the Global Business Outlook. Medium-term Projection for the World Economy until 2019

Stefan Schiman

WIFO Bulletin, 2015, vol. 20, issue 7, 80-91

Abstract: The marked decline of oil prices gives some impetus to business activity in the euro area. However, medium-term prospects are dominated by lack of aggregate demand and very low inflation; moreover, the lacking possibility of currency de- or re-valuation, notably the under-valuation for Germany, is weighing on the growth outlook. Prospects for the USA are markedly more favourable since excess private debt was reduced rapidly via bankruptcies and by accepting generous government deficits after the financial market crisis. In China, both prosperity and indebtedness are rising quickly. In Japan, the investment-inhibiting unwinding of corporate debt will wear off in the years to come. Another financial market crisis is looming in Russia, despite the country's moderate degree of foreign indebtedness.

Keywords: Medium-term Forecast; World economy (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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