World economies continue to grow at solid rates according to a new report from Bank of Nova Scotia, but major imbalances such as the U.S. preference to spend and the Asian propensity to save show no signs of reversal.

Scotiabank says this leaves many countries with a reduced capacity to handle coming economic stresses.

One of these stresses is the continued high price of oil. “We have not yet experienced the full impact of the increased price of oil,” says Pablo Bréard, vp, International Research, Scotiabank Group.

“For Canada, the impact of these higher prices is manageable, but in other countries, this may precipitate a closer examination of fundamental economic issues that need to be resolved,” says Bréard.

Another hurdle that many economies will face is the process of adjustment once Asian economies — China in particular — begin to introduce more flexibility in their exchange rates.

“The U.S. has increased political pressure on China to loosen its tight control of the yuan,” says Bréard. “But it is not clear that the U.S. is sufficiently prepared to face the disruptions that may result once this currency, along with others in the region, is liberalized.”

In Europe, there is reluctance to institute much needed but politically unpopular reforms. This reluctance will only increase as major leadership changes are expected following a series of elections over the next two years.

“Overall, we remain cautiously upbeat about the global outlook,” concludes Bréard.