Capital Economics expects global growth to pick up in the second quarter after a soft patch at the beginning of the year, with the expectations attributed to the results of the preliminary purchasing managers' surveys for May.
"We still think activity will rebound strongly in the U.S., but we expect growth to remain sluggish in the Eurozone and to be near zero in Japan," said Andrew Kenningham, an economist at Capital Economics.
A weighted average preliminary manufacturing PMI compiled by Markit for the U.S., China, Eurozone, and Japan edged up to 51.7 in May from 51.5 in April. Capital Economics believes that it still points on the basis of past form to world gross domestic product (GDP) growth of between 3 percent and 3.5 percent annualized.
The economist expects the growth in the eurozone to slow only slightly, while the slowdown in the U.S. is expected to be transitory, as underlying picture remains strong.
The economist expects economic activity in China to regain some momentum during the coming months. He expects a further 150 basis points cut in the required reserve ratio and one more cut to benchmark interest rates this year.
After GDP growth of 0.6 percent in the first quarter, Japan's economy is likely to slow sharply, particularly as this quarter figure was flattered by a one-off surge in inventories. Indeed, the economist still sees near-zero GDP growth in Japan this year.
Overall, 2015 looks set to be another year of pedestrian global growth with the U.S. still likely to out-perform most other advanced economies, Kenningham said. In parts of the Eurozone and Japan, weak growth will make it difficult for governments to grow out of their debts.
The economist said the sluggish pace of the global recovery is also one reason to expect oil prices to remain capped around their current levels. Against this backdrop, most central banks, including the European Central Bank (ECB) and the Bank of Japan, will persist with ultra-loose monetary policy.
But the firm expects the U.S. Federal Reserve System to begin raising rates later in the year, potentially triggering further dollar appreciation.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.