Some commentators were forecasting a recession amid concern that China's slowdown would drag the world down with it and citing falling commodity prices as a re-pricing of growth expectations. Early January saw the yuan fall and risk assets drop on fears of rising global deflation.
China to keep growing around 3-5% in 2016. This is good news for the global economy. Resulting lower commodity prices boost consumer incomes and can unleash capex in the West. 2016 should see US growth of 2.5-3% and a stronger dollar while the euro area grows at an above-trend 1.5%. We expect further painful rebalancing, financial market volatility and EM pain, but not a global recession. (LSR View 3rd December 2015)
Global growth became more stable and secure in the US, UK and euro area with consumers and businesses regaining confidence. Chinese growth stabilized around 4% on LSR numbers and PPI turned positive. Deflationary pressure eased through the year and markets re-focussed on the return of inflation risk and rates.