Forecasts of global GDP growth in 2016 look a bit more promising with the IMF, World Bank, BIS, and OECD forecasting growth of between 2.9 and 3.4 percent. However, if world trade remains depressed and market volatility continues, we are likely to see downward revisions to these forecasts.
As for the second factor, I am concerned that, although global market participants have factored in the postponement of the Federal Reserve’s reduction in the pace of its asset purchases, the timing of such reduction is uncertain and they continue to speculate on when the Federal Reserve will actually make this move.