crisis. in china, growth has slowed a little. the authorities have responded to this, although they also face the challenge of addressing risks in the financial system. there are a few uncertainties that are worth highlighting. one is the possibility of an escalation in global trade tensions. the measures announced so far are unlikely to derail the global expansion. even so, in some countries, businesses are delaying investment because of the additional uncertainty. it is possible that this becomes a more general story. if this were to occur, this could be the channel through which the trade tensions sap the current positive momentum in the global economy. another uncertainty is the possibility of a larger - than - expected pick - up in inflation in the united states. the us economy is experiencing a sizeable fiscal stimulus at a time of limited spare capacity, so growth there could surprise on the upside. at the same time, financial markets 1 / 4 bis central bankers'speeches remain relaxed about the implications of this for inflation. i am less relaxed : it is highly unusual to have such stimulatory fiscal policy when the economy is already operating at a very high level of capacity. one can ’ t rule out the possibility that the federal reserve will have to withdraw monetary accommodation more quickly than currently projected, with possibly disruptive consequences in financial markets. a third set of global risks originate from a number of individual economies with country - specific structural and / or institutional vulnerabilities, including argentina, brazil, italy and turkey. over the past month there have been episodes of market volatility associated with each of these countries. we are watching developments closely as a further escalation of problems could be a catalyst for a period of increased stress in the global financial markets. the second issue is the housing market and household debt. the housing markets in sydney and melbourne have clearly slowed and prices are coming down. while this has concerned some people, we need to keep things in perspective. not so long ago, there was concern in the community about rapidly rising housing prices and debt and declining housing affordability. these earlier trends were not sustainable and were posing a medium - term risk to our economy. so a pull - back is a welcome development and can put the market on a more sustainable footing. it is good news that this adjustment is taking place at a time when global growth is strong, the labour market is positive and interest rates are low. all these things are helping with the adjustment. we are nevertheless continuing to keep a close

glenn stevens : the world economy and australia address by mr glenn stevens, governor of the reserve bank of australia, to the american australian association luncheon, hosted by goldman sachs, new york city, 21 april 2015. * * * i thank elliott james for assistance in preparing these remarks. thank you to the american australian association for affording me the opportunity to speak again in new york. thank you also to goldman sachs for hosting the event. the world economy there are about as many indicators of the world economy as there are people studying it. my remarks will be fairly high - level, and since we have just had the imf meetings, it seems appropriate to begin with the picture they present. the fund ’ s latest publication estimates that output in the world economy grew by 3. 4 per cent in 2014 ( graph 1 ). this is a bit shy of the long - run average of 3. 7 per cent, and actually fractionally above the previous estimate in october. the projections are for a slight pick - up in 2015 and around average growth in 2016. these figures are broadly in line with the private sector consensus. most of the recent growth has come from the emerging world. as a group, the emerging world grew by 4½ per cent in 2014. china grew by about 7½ per cent, more or less as the authorities intended. it will probably grow by a little less in 2015 ; the imf is saying below 7 per cent. but given its size now, china growing at 6 – 7 per cent would still be a major contributor to global growth. indeed, the current projections have china contributing about the same growth in global output in 2015 and 2016 as it did in recent years. meanwhile, growth looks to have picked up in india but softened in some other emerging markets. graph 1 in the major advanced economies, in contrast, growth has generally been below previous averages for quite a number of years. it has taken longer to recover than we had all hoped. there are, happily, some signs of improvement at present. growth is slowly recovering in the euro area and has resumed in japan. in the united states, notwithstanding some recent bis central bankers ’ speeches softer numbers, the economy looks to have pretty reasonable momentum. so it would appear that we are heading in the right direction. unfortunately, that doesn ’ t mean the legacy of the 2008 crisis is yet behind us. from the vantage point of most central banks, the world could hardly, in some respects, look more unusual.