This has already arrived in the eurozone. Official figures this week showed that consumer prices fell by 0.8 per cent in the year to January. But Germany's Ifo survey showed that companies are becoming more optimistic about the future. Figures next week are expected to confirm this pattern, with initial estimates expected to show that inflation fell further in February while purchasing managers' surveys confirm that economic growth has hit a seven-month high.
Economists expect the UK to follow suit. Inflation is expected to turn negative - possibly as soon as in next month's figures - while some expect growth to accelerate. Rob Wood at Berenberg Bank predicts that GDP growth will accelerate from 2.7 per cent last year to 3.2 per cent in 2015. This is partly because of a pick-up in capital spending but also because rising real wages on the back of a tighter labour market - unfilled vacancies are at their highest level since records began in 2001 - should underpin consumer spending.
Purchasing managers' surveys next week are expected to support such optimism as they could show stronger growth in manufacturing and services.
In the US, Erik Britton at Fathom Consulting says "it is almost inevitable that the US will experience a period of significant, outright deflation." But he expects this to be accompanied by faster real growth; he envisages real GDP rising by more than 4 per cent this year.
A big reason for this happy combination is that oil prices, despite rising in the last few weeks, are still 40 per cent below August's levels. Barclays' Keith Parker expects this lower price to persist, and estimates that each 10 per cent drop in oil prices adds 0.1 percentage points to global GDP growth. He estimates there is a lag of between six and nine months between lower prices and better growth - which means we haven't yet seen the full benefits of the drop.
But some economists fear that stock markets are already pricing in strong growth and so are vulnerable to any disappointment. Alastair Winter at Daniel Stewart & Co points out that the cyclically-adjusted price-earnings ratio on the S&P 500 (the ratio of prices to earnings over the last 10 years) is now at levels only previously seen in 1929, 1999 and 2008 - all of which subsequently saw crashes."Equity markets are seriously overvalued," he warns.
