THE CHALLENGES FACING THE BANKING SECTOR 12 I SOCIETE GENERALE 2014-2015 n 2015, the global economy will benefit from the drop in oil prices and a sustainable recovery in the United States. In the eurozone, the European Central Bank’s (ECB) quantitative easing policy and the entry into force of the Banking Union will be key drivers. DISAPPOINTING GROWTH IN 2014, ENCOURAGING SIGNS FOR 2015 2014 saw global growth at a modest 2.5%. The general trend was that of lacklustre economic performance, not just in mature economy countries but also, for the first time, in emerging countries. The major emerging markets (Brazil, Russia, and China) that had driven growth following the financial crisis all posted substantially lower growth. In China, this deceleration resulted from a change in economic policy. Following a spectacular boom in bank loans, the new policy aims to restrict access to lending in order to prevent the real estate bubble from bursting. Seven years after the financial crisis began, economic activity in most developed economies has barely returned to its previous level. The effects of the crisis are still being felt. In Europe, the trend towards recovery is being held back by high levels of public and private debt, as well as by structural rigidity. Geopolitical tensions, particularly in Ukraine and the Middle East, have also affected the business climate. 140 120 100 80 60 40 20 0 2010 2011 2012 2013 2014 2015 2015 offers more positive signs that should lead to an improvement in global economic activity. The recovery that began in the United States in 2014 seems to be solidifying, though it suffered a temporary setback in early 2015. In China, policymakers have so far successfully steered the necessary slowdown. Above all, the sharp drop in the price of oil, which is mainly due to the supply side, is having a positive growth impact for importing countries. This is also true for Europe, where low oil prices are boosting consumer purchasing power and improving businesses’ competitiveness. Albeit to a lesser extent, the depreciation of the euro, which is encouraging exports outside the eurozone, and historically low interest rates should also underpin growth. However, the process of deleveraging and rebalancing the global economy is not over, and will continue to exert a drag on growth. I @SocieteGenerale There has been a gradual improvement in the global economic environment. A macroeconomic overview by Olivier Garnier, Group Chief Economist at Societe Generale, and Michala Marcussen, Chief Economist of the Corporate and Investment Bank. DROP IN OIL PRICES SINCE THE SUMMER OF 2014 PRICE OF A BARREL OF CRUDE OIL IN DOLLARS (BRENT) STRATEGY
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