Many of these countries may be downgraded by rating agencies and may experience significant capital outflows, particularly if the US economy recovers more strongly and if lift-off happens sooner or at a faster pace than markets may have anticipated. This may elevate global financial stability concerns.
Further risks to the global economic outlook include a possible disorderly Grexit and the risk of deflation, should inflation expectations become unhinged in the euro area and in Japan. On the domestic front, growth continues to disappoint, and potential growth is likely to be constrained due to the electricity load-shedding.