The global economy lost momentum last year as emerging market economies struggled with financial capital outflows and a slowdown in China.  The world’s economy has now under performed for four consecutive years, with all major regions of the globe expanding below potential.  There are benefits to a weak global economy, including lower energy prices. 

Global commodity prices plummeted last year including the prices of oil, natural gas, copper and steel.  That has helped to stimulate certain forms of consumption and also rendered the costs of construction lower than they otherwise would have been.  Economists at Moody’s Analytics and elsewhere expect that many input prices are now approaching a bottom, however, and that energy and other prices are likely to rebound somewhat in twenty sixteen. 

While much of the focus recently has been on struggling emerging economies like Brazil, Europe was also hampered by a series of head winds last year as Russia sank into a deep recession, the Greeks required a third bailout, the region struggled to deal with the enormity of the Volkswagen scandal and many nations were faced with a record influx of refugees.