Viet Nam Human Rights
Constructive methods for global economy
12/1/15
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 ]
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?
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.
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.
The optimism in America stood in stark contrast to gloom elsewhere, as it does today.
The gap between America, where growth is accelerating, and almost everywhere else, where it is slowing.
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.
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.
And the global financial system is less leveraged and hence less vulnerable to contagion.
If the world economy does stumble, restoring stability will be harder this time round because policymakers have so little room for manoeuvre.
The economics of 2015 may look similar to the late 1990s, but the politics will probably be rather worse.
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