Commenting on its "global economic outlook", T. Rowe Price said since the GFC, slower growth has been “pervasive among world economies” as real GDP growth among “advanced economies” has slipped from 3.0 per cent to 1.8 per cent in 2014.
“Among emerging economies, growth has slipped from an annual average of 8.0 per cent to 4.4 per cent over the same time periods,” a statement from T. Rowe Price said.
“Looking to 2015 and 2016, T. Rowe Price is expecting average growth of 2.4 per cent and 5.1 per cent for advanced and emerging economies, respectively,” it said. “This is better than 2014 but somewhat below norm.”
T. Rowe Price head of equity Bill Stromberg said that coming out of the global financial crisis “economic healing” has taken place at “different paces” in various markets around the world.
“Stock prices in the US have soared while they have lagged in Europe, Japan, and some emerging markets. US stocks can continue to advance, though likely at a more moderate pace, and the potential exists for positive earnings surprises in Europe and Japan,” Mr Stromberg said.
“We expect more volatility in 2015 and investors will need to be selective. Fundamental equity research and individual stock selection will be more important than ever,” he said
