Hard slog ahead for the global economy

ANZ chief economist Warren Hogan has warned there is more hard work ahead for the global economy in the short to medium term with further challenges likely to moderate the pace of growth.

"There’s very little chance that we’re going to have what was once regarded as strong economic growth in the world."

“The next three to five years offers continued challenges for the world economy,” he says. 

“We think growth at best is going to be around 3 to 4 per cent and that’s the average of the last 30 years. 

“There’s very little chance that we’re going to have what was once regarded as strong economic growth in the world.“ 

Hogan says the turning point for the global economy is likely to be the rise of China and recovery in Europe, both of which are unlikely to occur in the medium term. 

“Only the US offers any chance of decent growth of the large economies,” he says.   

Hogan says the vast proportion of world growth in the medium term would continue to come from emerging economies. 

So what happens to those regions when US interest rates inevitably go up?