CITI: Here's What The World's Big Economies Will Do In The Next 4 Years

There's a big divergence going on in the global economy right now.

Growth in the US is picking up as Europe, Japan, and the emerging markets slow.

In its latest monthly Global Economic Outlook and Strategy report, Citi's Willem Buiter and his team downgrade the firm's expectation for global growth after "notable downgrades" to several emerging markets including Brazil, China, and Russia.

"Our global growth forecasts continue to drift down, and we are cutting 0.1 percent off our 2015 forecast this month, and now look for global GDP growth of 2.8% this year and 3.3% for 2015 (at current exchange rates)," Buiter wrote. "This is the second consecutive monthly downgrade to our 2015 growth forecast, while in total we have cut our 2014 forecast by 0.5 percent (from 3.3% to 2.8%) since January."

Buiter's 52-page note offers commentary on every major economy covered by Citi's army of economists. We highlight a few of the viewpoints for 36 major economies in the Americas, Europe, Asia-Pacific, and Africa. We also include GDP growth forecasts through 2018.

The US will see solid growth in the next few quarters.

GDP Growth Forecast

• 2014: +2.3%
• 2015: +3.3%
• 2016: +3.2%
• 2017: +2.7%
• 2018: +2.2%

"Improving consumer and business fundamentals, along with supportive financial conditions (including a massive rise in wealth) are pointing to a solid 3 percent (or better) growth in the next few quarters," writes Citi's Peter D'Antonio. "The rebound in growth, especially in private domestic demand, should help drive the unemployment rate below 6 percent later this year."

Source: Citi

Japan's central bank will implement more easing measures.

GDP Growth Forecast

• 2014: +0.9%
• 2015: +0.6%
• 2016: +1.2%
• 2017: +1.2%
• 2018: +1.0%

"We expect the BoJ will implement additional easing measures during the period between late October and January 2015," write Citi's Kiichi Murashima and Naoki Iizuka. "Recent sharp yen depreciation, along with the resultant rally in equity markets, has probably reduced the possibility of early easing (say, in late October). We believe that fresh easing in January 2015 — after PM Abe’s official decision to implement the tax hike — is most likely now.

Source: Citi

Germany's consumer confidence is weakening.

GDP Growth Forecast

• 2014: +1.5%
• 2015: +1.8%
• 2016: +2.1%
• 2017: +1.9%
• 2018: +1.8%

"German sentiment indicators have continued to weaken and consumer confidence is now also weakening (from a very high level) in response to a string of weak data and external risks," writes Citi's Ebrahim Rahbari. "We currently expect 0.5% QQ Q3 growth, but acknowledge that the strong rebounds in industrial production and exports in July point to the possibility of a higher figure."

Source: Citi