2015 Global Markets Trends & Forecasts

Global GDP2

2014 gave us a few unexpected turns in the global economy. There was the concern over the long-lasting effects of Ebola, the ISIS, and Ukraine. Aggressive policies regarding climate change have yet to take effect. The economic recovery of Western Europe and Japan are faltering. Brazil, Russia, and China’s growth have come to a halt and are slowing down. The United States, however, has continued its positive recovery and there seems to be a lot of changes in store for international business this coming year. Let’s get ready for 2015.

  • Slow but steady growth in the global economy

The global economy is taking longer than anticipated to recover from the debt bubble. The IMF projected that the world economy would be at 4.8 percent by 2015. However, 2014 ended with only a 3 percent growth overall. While the United States has pretty much met its growth targets, the disappointments came from the BRIC (Brazil, Russia, India, China) economies, Western Europe, and Japan. Forecasts have been adjusted for the coming year with an estimated growth of 3.4 percent for 2015.

  • Emerging markets dominate

Emerging markets rather than developed economies will fuel much of the growth. The United States will still be a major player in the overall growth of the global economies. However, Western Europe and Japan will grow only an estimated 1 percent and China’s 7 percent will be its lowest in 15 years. Much of the growth will come from Asia and Africa. Specifically, Mexico, Indonesia, Nigeria and Turkey will be on the watchlist for booming economies.

  • Oil prices will continue to fall

The demand for oil will decline due to alternative sources and supply in other areas of the world. This will lead to the continued fall of oil prices affecting countries such as Iran, Nigeria, and Russia.

  • Climate change will still be a threat

Record-high temperatures continue to be seen with Antartica experiencing its coldest winter so far. Coal is still highly used and international policies to curb this practice are weak. This may lead to drastic effects such as shortages in water and the supply of world’s food system and inevitably contributing to world hunger.

  • Innovation, new technologies and hacks will continue to affect us

While spending is somewhat low and demand is weak, businesses are in a better position for recovery by investing in new technologies to get ahead of competition and for future savings. The search for more fuel-efficient machines by Boeing and Airbus is an example of this trend. Another example, is with the United States, who has contributed to innovations in oil drilling thus resulting in an oil boom and affecting world prices.

The global outlook for 2015 should be better than 2014. It may not be much, but it’s way better than negative.

How will these trends affect you and your company? Tell us what you think.

Sources:

  1. http://www.goldmansachs.com/our-thinking/outlook/2015/index.html#infographic
  2. http://www.businessweek.com/articles/2014-11-06/2015-global-economic-outlook-better-than-2014-but-not-by-much
  3. http://www.businessinsider.com/business-insider-global-20-2014-2014-1?op=1 

No Talk on Forex Between Japan and U.S. Treasury

Full article at Reuters 

Japanese Finance Minister Taro Aso said on Friday there was no discussion on currency moves at his meeting with U.S. Treasury Secretary Jack Lew.

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He also said the two agreed on the need to achieve sustainable economic growth in Japan and the United States as the euro-zone economy stagnates.

See also: Congressmen Urge USTR, USDA to Press Japan on Tariff Elimination

Aso made the remarks after meeting with Lew on the sidelines of the Group of 20 finance leaders’ weekend gathering in the Australian city of Cairns.

(Reporting by Leika Kihara; Editing by Chris Gallagher)

 

Top Ten Countries with which the U.S. Trades

For the month of April 2013

                                                  Year To Date
                                    Total in         Total in
                                    Billions         Billions
 Country Name                       of U.S. $        of U.S. $

 Canada                                         54.75           208.98
 Mexico                                         44.24           164.53
 China                                           42.09           167.43
 Japan                                                  17.04            67.11
 Germany                                       13.62            51.55
 Korea, South                                  8.79            34.23
 United Kingdom                              7.81            32.58
 France                                          6.75            24.20
 Switzerland                                   6.32            19.55
 India                                            5.73            20.56

source: http://www.census.gov/foreign-trade/top/dst/current/balance.html

G-20 Inflation Rate Decreases CLICK TO READ

A measure of inflation for the members of the Group of 20 was published for the first time today. According to a group of international institutions, the annual rate of inflation was 3.2% in July and fell to 3.0% in August.

Rates fell in many large developing economies such as China, India and Brazil in addition to the U.S. and the EU. Japan and Indonesia are the only countries whose inflation rate increased in August. The member with the lowest inflation rate was Japan at 0.9% and the highest was India at 10.7%.

If inflation rates continue on a downward trend, central banks will find reassurance in keeping their reactive monetary policies from the 2008 financial crisis intact. While the global economy has been recovering, it is feared that the future U.S. budget policy may set it aback.

What are your thoughts on the G-20 inflation rate? Post in the comment section below!

 

Source: WSJ