Four key developments have shaped the global outlook since the WEO October 2014 Update:
- Oil prices in US dollars have declined by about 55 percent since September. The decline is partly due to unexpected demand weakness in some major economies.
- While global growth increased broadly as expected to 3 ¾ percent in the third quarter of 2014, up from 3 ¼ percent in the second quarter, this masked marked growth divergences among major economies.
- With more marked growth divergence across major economies, the US dollar has appreciated some 6 percent in real effective terms relative to the values used in the October 2014 WEO. In contrast the euro and the yen have depreciated by about 2 percent and 8 percent, respectively, and many emerging market currencies have weakened.
- Interest rates and risk spreads have risen in many emerging market economies, notably commodity exporters, and risk spreads on high-yield bonds and other products exposed to energy prices have also widened.
Read the full World Economic Outlook January 2015 Update here.