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A view into 2015: Growth in the global economy to continue

Chief analyst in Danske Invest, Bo Bejstrup Christensen, takes you on a world tour presenting his view of the macroeconomic potential in 2015.

The upswing in the global economy continues; this is good news. This is the short version of chief analyst in Danske Invest, Bo Bejstrup Christensen's view of 2015. He expects continued economic strength in the USA, recovery in Europe and continued growth in China, however, with substantial challenges as the companion.

USA: The great powerhouse in the global economy
The US economy surprised positively in 2014, and Bo Bejstrup Christensen expects the solid economic growth in the USA to continue next year. In addition, he believes that the American central bank, the Fed, will hike interest rates.

"We expect that US growth will be at approx. 3.5% in 2015. The primary drivers behind this development are a persistently well-functioning banking system, which is underpinning the companies' investment propensity and capability, and the recovering housing market that is still laying by in wake of 5-6 years of crisis," says Bo Bejstrup Christensen. Due to the solid growth, he expects that the Fed will hike interest rates for the first time in many years in 2015.

Europe: The banking sector is to drive growth
Bo Bejstrup Christensen is of the opinion that 2015 will be the year in which European growth will become entrenched following a disappointing 2014. However, this will depend on whether the banking sector will meet expectations.

"In 2015 the banking sector will become the decisive factor determining whether growth will regain momentum. We expect that banks will increase their lending activities in 2015. In other words, companies will be able to invest, and consumers will be able to increase their spending," says Bo Bejstrup Christensen. He stresses that this does not imply that the ECB is anywhere near tightening its monetary policy course, and the uncertainty in Eastern Europe will be the unknown factor that can affect developments, just as we have seen it this year.

China: Continued growth, but challenges will be the companion
Bo Bejstrup Christensen believes that Chinese growth will be at 6% in 2015. However, the challenges are substantial. Particularly the housing market is a challenge because the construction activity has been too heavy, and the lending regime has been overheated during the past couple of years. However, there are bright spots.

"The good news is that the housing market appears to have slowed down, i.e. housing sales have shown a slight decrease, and the same holds true for construction. We actually appreciate that. The growth in banks' lending activities also appears to have fallen to more sustainable levels. Therefore, we expect that the Chinese economy will increase by approx. 6% in 2015. However, we are very much aware of the significant risks in China - particularly those related to the financial system and the housing market," concludes Bo Bejstrup Christensen.

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