60 seconds on why cracks remain in the global growth outlook

It has been a gloomy start to 2016 for the global economy, and while the outlook over the next two quarters is set to improve, longer-term conditions are likely to remain tough.


Keith Wade

Keith Wade

Chief Economist & Strategist

With lacklustre economic growth and downgrades to forecasts, it has been a disappointing start to 2016 for the world economy.

Looking ahead to the next two quarters, there are some signs that growth is picking up and that problems that were holding back some companies earlier in the year are beginning to fade. The consumer side is picking up too, as credit has begun to grow again.

However, global growth is still unlikely to be that strong in 2016.

Why has global growth been so weak?

A lot of the weakness we’ve seen is to do with the aftermath of the global financial crisis. It is taking a long time for households, companies, countries and regions to adjust to the new environment.

Demographics have got a part to play as well. There has been a slowdown in the growth of the working population and productivity growth has slowed down too.

Shorter-term, the global economic outlook is brighter than it was earlier in the year, but longer-term it is still going to be quite tough.

Important information: The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy. The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  Exchange rate changes may cause the value of any overseas investments to rise or fall. Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors. Issued by Schroder Unit Trusts Limited, 31 Gresham Street, London, EC2V 7QA. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.