This document discusses the global economic outlook and transitions that will influence future growth rates. It notes that China's economic rebalancing away from investment and manufacturing toward consumption and services, along with tighter U.S. monetary policy and lower commodity prices, will weigh on emerging market growth prospects. A sharper than expected slowdown in China or further dollar appreciation could negatively impact trading partners and global financial markets. While advanced economies may see a modest recovery, growth is projected to pick up more gradually for emerging markets due to strains from China's slowdown and lower commodity prices.

1. 2015 2016 2017
3.13.1 3.43.4 3.63.6
2015 2016 2017
4.04.0
4.34.3
4.74.7
2015 2016 2017
1.91.9 2.12.1 2.12.1
TRANSITIONS AND RISKS
Transition: The slowdown and
rebalancing of economic activity
in China away from investment
and manufacturing toward
consumption and services
Transition: The slowdown and
rebalancing of economic activity
in China away from investment
and manufacturing toward
consumption and services
Risk: A sharper-than-expected slowdown
could take a toll on trading partners and
have global financial market repercussions
(including declines in confidence).
Transition: The gradual tightening
in U.S. monetary policy
Transition: The gradual tightening
in U.S. monetary policy
Risk: Further dollar appreciation would
put additional pressures on firms in emerging
market economies.
Transition: Lower prices for
energy and other commodities
Transition: Lower prices for
energy and other commodities
Risk: Further price drops will worsen
the growth outlook for already-strained
commodity producers.
Other Risks
New economic or geopolitical shocks could
further delay a pickup in activity in countries
currently in economic distress.
Growth will pick up more gradually than
projected in fall 2015, especially in emerging
market and developing economies.
Emerging Market &
Developing Economies
China’s slowdown and
rebalancing, lower commodity
prices, and other strains in some
larger emerging market
economies are likely to weigh
down growth prospects.
A continued modest recovery
should gradually close the
output gap between real
vs. potential GDP.
Advanced Economies
Global demand and activity remain subdued,
as three key transitions continue to influence
the global outlook (see transitions below).
Global Economy
FUTURE GROWTH RATES
INTERNATIONAL MONETARY FUND • www.IMF.org • #WEOINTERNATIONAL MONETARY FUND • www.IMF.org • #WEO
WORLD ECONOMIC OUTLOOK UPDATE • JANUARY 2016WORLD ECONOMIC OUTLOOK UPDATE • JANUARY 2016