Global Growth in 2015--Optimism and the Wild Cards

McKinsey, the global consulting group, is out with a new report on the global economic outlook for the balance of 2015. The report's authors accept the consensus forecasts of a global 2.8 to 3.8 growth rate, but point to three wildcard factors with  this introduction:

"...executives are increasingly focusing on opportunities presented by diverging growth rates among regions, countries, and even sectors. This means an essential element of strategic and financial planning for 2015 and beyond is taking closer account of critical regional trends and risks, with sensitivity to key economic indicators and government policy responses."

The three wildcards, any one of which could upend any forecast, are:

1. Much of the optimism about global economic growth is predicated on rebounding spending in the North American consumer sector--any softness here will throw other regions into lower or no growth;
2. Very depressed oil prices are not expected to continue forever--thus, the rate and magnitude of price rebound toward more historical average levels will affect growth; and
3. The Eurozone, despite the continuing possibility of Grexit, is expected to be relatively stable, even if it barely grows at all--any upheavals here will ripple outward very fast.

As always, it is prudent for school strategists to keep an eye on the wild cards and use scenario planning to have alternative responses ready for a range of possibilities.