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Cheap Oil And Deflation - Made In China: Global Economics And Markets Outlook Q1 2015

By Philip Lachowycz

Both Sir John Gieve and Shamik Dhar were generally in agreement that China was slowing, although Shamik Dhar felt that there was some positive news on supply side reform. Sir John felt that the CMI was particularly important because of the poor quality of the official data and the difficultly that creates in forecasting Chinese output. Indeed, he described the CMI has "an ingenious way round that" issue.

Cheaper commodity prices are unlikely to be a 'shot in the arm' for global growth any more than they were during the second half of 2008. In both cases, lower prices reflect weaker demand, this time because of China. We have revised down our global growth forecast significantly. We now expect global growth to slow both this year and the next.

The key uncertainty is how Chinese policymakers will respond to the slowdown. In our central scenario, we have… Read More …