Constructive methods for global economy

12/01/2015


In 2014, the World Bank (WB) and International Monetary Fund (IMF) repeatedly downgraded growth forecasts for the global economy in 2015 but growth in the world economy this year is still expected with modest strides. Besides, there are potential risks according to the general assessment of the international finance organizations.
In 2014, the IMF thrice downgraded its forecast for global economic growth in 2015 to the most recent decrease from 4% to 3.8%. Despite the decrease, the global economy in 2015 is still expected to rise slightly. TCB- a global organization on studying the economic and business environment in New York predicted that global economic growth will be modest in comparison with 2014, only up to 3.4%. This organization also provided long-term forecasts for global economic growth after 2015 with a slight downward trend, for example the period from 2015 to 2019 will reach 3.3% and an average reduction of 2.7% in the period 2020-2025.
Forecasts for the "flagship" economy of the world, in the report launched in November last year, TCB said that the US economy will grow 2.6% in 2015, while China's economy will fell 6.5% and the Europe will increase 1.6% in 2015.
Meanwhile, Mr. Jusman Syafii Djamal, former Indonesian Minister of Transport, Chairman of Matsuhita Gobel has made  assessment on Jakarta Post that the world economy this year shows positive signs. Among them, the notable point is the strong recovery and reasonable growth of the US economy. He stressed that economic indicators shows strong changes which put faith that the US economy will be the driving force for global growth in 2015. In addition, the decline in oil prices means that inflation will lower, creating conditions for the central bank to ease monetary policy, supporting growth.
While economic in 2015 is evaluated more positively than in 2014 about the prospects for growth but it does not completely get rid of the challenges and potential risks. The IMF warned that the pace of recovery of the world economy will be weak and uneven this year. IMF made this forecast because of the gloomy outlook in the euro area, Middle East and Japan, as well as the downturn in some emerging markets. The conflict in the Ukraine and unrest in the Middle East made world oil prices tanked, affecting international trade, and threatening world economic growth.
Sharing the same concern, Mr. Jusman Syafii Djamal said that the world economy would face the risk when the euro area in Europe are struggling to rebound; Japan's economy lost momentum in 2014. China's economic situation is more worrisome because of the "bubble" real estate and large financial imbalance.
Notably, most analysts expressed concern about the geopolitical risks that may impact negatively on the growth rate of the world economy this year. It is the potential danger from the Middle East - North Africa due to the civil war in Libya, Syrian, Israel, Yemen, Iraq and Egypt may affect the area producing oil or oil transport routes.
In the face of assured forecasts and analyzes on world economic prospects in 2015, many proposed solutions were given. According to the chief economist of the TCB organization, Mr. Bart Van Ark said that global leaders need to focus on better control three macroeconomic issues include: The shortage of human resources, slowing production and lack of investment in productive assets. They are said to be the issue that will define the slowdown of the global economy over the next decade.
IMF report also recommends the leading economy in the world such as America, Europe and Japan should continue to maintain low interest rates to encourage borrowing, spending and growth. The European Central Bank should also consider buying program of government bonds when necessary to avoid deflation. In addition, the IMF also urged the government to undertake a series of structural reforms such as: Improving policies for the labor market, combating tax evasion and strengthening investment to upgrade infrastructure.
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All comments [ 10 ]


Quân Hoàng 12/1/15 12:16

A FINANCIAL crash in Russia; falling oil prices and a strong dollar; a new gold rush in Silicon Valley and a resurgent American economy; weakness in Germany and Japan; tumbling currencies in emerging markets from Brazil to Indonesia; an embattled Democrat in the White House. Is that a forecast of the world in 2015 or a portrait of the late 1990s?

Hoàng Lân 12/1/15 12:16

Recent economic history has been so dominated by the credit crunch of 2008-09 that it is easy to forget what happened in the decades before. But looking back 15 years or so is instructive—in terms of both what to do and what to avoid.

Hùng Quân 12/1/15 12:17

The United States was in the vanguard of a disruptive digital revolution. The advent of the internet spawned a burst of innovation and euphoria about America’s prospects.

Quốc Cường 12/1/15 12:18

The optimism in America stood in stark contrast to gloom elsewhere, as it does today.

Huy Lâm 12/1/15 12:19

The gap between America, where growth is accelerating, and almost everywhere else, where it is slowing.

Phạm Hiếu 12/1/15 12:20

Add all this up and 2015 seems likely to be bumpy. Bears will bet that a surging dollar coupled with euro-zone torpor and a few emerging-market crises will eventually prompt a downturn in America.

Huy Quốc 12/1/15 12:22

And the global financial system is less leveraged and hence less vulnerable to contagion. In 1998 Russia’s default felled LTCM, a big American hedge fund. Such knock-on effects are less likely today.

Vân Nhàn 12/1/15 12:23

And the global financial system is less leveraged and hence less vulnerable to contagion.

Lê Tín 12/1/15 12:24

If the world economy does stumble, restoring stability will be harder this time round because policymakers have so little room for manoeuvre.

Quốc Kiên 12/1/15 12:25

The economics of 2015 may look similar to the late 1990s, but the politics will probably be rather worse.

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