Fragile cooperation, optimist economy (Part 2 and end)
30/12/15
Economic stability in developing countries, slow
growth in emerging countries
World economic picture in 2016 will continue to have
many similarities with the context of 2015. Most forecast agencies, including
the World Bank (WB), the Organization for Cooperation and Development (OECD)
and Bloomberg, have a quite optimistic look about the world economy in 2016.
Surveys of Bloomberg economists said that the world economy next year is
expected to be stronger than 2015 and approaching the long-term growth
objectives.
According to experts, in 2016, China's economy will
continue to decelerate; US continues growth; Growth of India will surpass China
7.5%; export in developing countries depends on China, such as Brazil, Chile, Indonesia,
Malaysia, Philippines, South Africa, Thailand and Vietnam also have many
changes while trying to reduce its reliance on China. The OECD said that in
2016 there will be a divergence of economic growth in the world with two
trends: Consolidating the recovery in the developed countries, the deceleration
in the emerging world.
A poll by Rauteur in the last December 2015 with
hundreds of analysts around the world show that global growth in 2016 is
forecast at 3.4%, or a maximum of 4% . The Business Insider cited IMF forecast that
the eurozone will grow slightly by 1.6% compared with 2015. US growth by 2.8%,
while the IMF cut its forecast about economic growth of Japan, Brazil, Russia,
Nova Scotia due to falling oil prices, the sanctions and oil prices. Besides
the forecasts of the world economic growth, the IMF gave a forecast of an
increase in global inflation, from 0.3% in 2015 to 1.2% in 2016.
Regarding currency, according to experts, FED decided
to raise the interest rate to be maintained long, from 0% -0.25% to 0.25% -0,
5%, showed optimism about the economic situation of the largest economy in the
world. 120 economists joined the poll by Reuteur on December, 18, 2015 predicted
that the Fed will continue to raise interest rates in next March. Most analysts
do not "bet" on the ability to USD fell, but for that contract Euro
(EUR) will be depreciated against the dollar. Many people believe that the
Chinese authorities will probably continue to devalue yuan to boost the
economy. Meanwhile, the Wall Street stock index is trading at a near equivalent
in 2015.
Low oil price is a key factor to help the economy more
optimistic. However, oil price is not easy to predict because it depends on
many factors including the policies of OPEC to the conflict in the Middle East.
The forecast for oil prices is given very different. The forecast given that
oil prices will drop to below $ 40 / barrel in 2016. However, expert Emad
Mostaque of Eclectic Strategy in London said, a barrel of oil will cost even $
100 to $ 130 in 2017.
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The world will face economic challenges on multiple fronts in 2016.
As the U.S. Federal Reserve begins its monetary tightening, Europe is struggling to manage migrant and debt crises, China's financial stability is in doubt, and emerging economies are increasingly fragile.
The global economy "could be doing much worse,
Low oil prices and weak currencies are keeping the European and Japanese economies afloat, but Rogoff warns of "a slowing Chinese economy, collapsing commodity prices, and the beginning of the U.S. Federal Reserve's rate-hiking cycle."
Emerging economies like Brazil, South Africa, Thailand, and Turkey, rather than China, will be the real sources of concern in 2016
With their high levels of short-term debt, these countries are vulnerable to currency crisis, "potentially leading to economic collapse."
the most dangerous economic risk for the continent in 2016 is "a growing populist challenge from both the Left and Right," which could create economic policy uncertainty and constrain policymakers.
It will be another rough year for emerging markets in 2016.
Financial crises erupt when a country has two problems at once: financial weakness and political weakness.
To avoid that outcome, a strong government could cut public spending to restore confidence and allow the central bank to raise interest rates in order to attract capital back to the economy.
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