One of the main challenges facing emerging countries in 2015 will be dealing with increased economic and policy “divergence” within the advanced world. It is a challenge that will widen the gap between well- and poorly-managed economies. It is also one that will tax even the best-run economies. In turn, their response will influence the prospects for the advanced world.

Divergence among advanced countries takes two major forms: bigger differences in growth and other major aspects of economic performance; and, related to this, opposite paths for central bank policies.

At one end, the US will continue its steady recovery in 2015, increasing the probability of an economic liftoff down the road that would help overcome remaining pockets of excess indebtedness. The Federal Reserve will feel both able and willing to continue the gradual orderly normalisation of its unconventional monetary policy, supplementing its recent exit from QE with less aggressive forward policy guidance and interest rate hikes starting in the middle of the year.