The world economy is still struggling with intense deflationary pressures. Since 2012, world GDP growth has been hovering around the 3.5% mark, well below the 5% of the pre-crisis years: while developed countries have managed to put their economies back on a sounder footing, activity in 2015 has further weakened in emerging economies. Still, in 2016, emerging growth should eventually stabilize while growth in developed countries should continue to slowly firm, especially in the euro zone and, to a lesser extent, in Japan.
We expect ongoing global growth in the coming months as developed-market downturns and a Chinese hard landing are avoided. Candriam’s asset allocation views for 2016 are built around five overarching investment themes: monetary policy divergence, a continuation of domestic demand as the main growth driver, a convergence towards higher growth rates in the euro zone, the bottoming of commodity prices and the comeback of liquidity risk.