RBC Global Asset Management released its New Year global investment outlook, citing continued sluggish growth, substantial downside risks and market displeasure.

Eric Lascelles, chief economist at RBC Global Asset Management, detailed a number of risks to global growth. He emphasised global debt hot spots, the emerging market slowdown, the resource shock and the slowdown in China. He also said that geopolitical risks were having a more significant affect on market outlooks.

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RBC do not see Fed rate hikes as a significant threat to global growth and are not worried about a deflationary environment.

"Inflation is very low, but should edge higher in the future as commodity prices cease to fall and developed world slack continues to ebb," Lascelles said.

Although RBC’s forecast was relatively sobering, a collapse in global growth was not predicted.

"Global economic growth has unquestionably slowed over the past year, with some pundits concerned that the process is accelerating into a more severe correction. We fail to find any evidence of this.

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"From a breadth perspective, only slightly more than half of national lending indicators are trending lower. More serious downturns, such as 2001 and 2009 have tended to be associated with a far more broad-based decline.

"Confirming this lukewarm interpretation, the one year consensus growth outlook shows a relatively even split between countries for which forecasts are being upgraded verses those that are being downgraded. This balance further confirms that the global economy is not truly crumbling," Lascelles said.

slowdown overblown