Sluggish Growth, Before a Wave of Political Risks - Scenario Eco June 2016


Global growth prospects remain sluggish in spite of reduced expectations of Fed tightening and a moderate recovery in oil price.

Over the rest of 2016, we expect growth to continue to suffer from uncertainty over activity in the United States and the Chinese slowdown. The recovery is set to strengthen in the Eurozone but is unlikely to be enough to bolster inflation. And to make matters worse, political risks abound.

Global Growth is Lacking Impetus

After a turbulent start to the year, the financial and commodity markets benefited from a lull between March and early June. The oil price erased part of its decline recorded at the end of 2015 and beginning of 2016, mainly due to a drop in production in some countries. In particular, global equity markets have generally stabilised over the period, as have the currencies of the main emerging countries. Risk premiums on the debts of these countries have also fallen.

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