WEEKLY COMMENT 17-12-2015
By Barry Edwards
A Look back at 2015
This year has been full of unexpected events both political and economic in the UK and worldwide. The Conservative win in the May general election and the massive shift to the left by the election of Jeremy Corbin as leader of the Labour party were both unexpected and have changed the political scene in the UK in ways that are yet to play out. The EU referendum is now dominating the media and the result could be very close when the time comes to vote.
The global economy has had its ups and downs with the USA and UK leading the field in developed countries with steady growth while India is becoming the engine of the emerging countries. The main disappointment is the very feeble growth in the Eurozone and the commodity based economies dragging down world growth to its lowest level for some time. The quantitative easing strategy by the ECB should improve growth in the Eurozone but many commentators have their doubts that it will not make a difference without further substantial restructuring. The uncertainty of how economies around the world will perform in 2016 makes it very difficult to predict what will happen while there are no obvious reasons to expect circumstances to change over the next year.
The Middle East continues to create disruption and could quite easily get out if hand if the major powers cannot find a way to unite effectively and allow ‘Daesh’ to exploit the disagreement. The reality is that events could occur to plunge the world into chaos with consequences no one can foresee.
The Paris shootings have inspired many countries to concentrate on destroying the terrorist strongholds in the Middle East and attempt to finally find a resolution to the endless fighting in the region. The refugee crisis this has created has managed to cause dispute within the EU which should stimulate some real substantial funding to help settle these desperate people in special zones to provide a proper community and places to work. This event has caused much disagreement amongst the EU nations that a resolution should emerge eventually.
The nations of the world are hoping the Vienna talks will produce a permanent solution to prevent further conflict in the region. At least all the countries affected in the region are taking part which does give the talks some authority and a chance of success.
China has had the biggest impact on everyone’s economic outlook for the next few years as it changes from an infrastructure investment economy to a consumer based one similar to most developed countries. The reduction in their demand for commodities has affected the relevant emerging markets and the oversupply of all major metals is not likely to be absorbed in the near future. Oil is the consumers’ friend and looks like it will remain at these prices for some time as oversupply continues to affect the price. While the world is recovering from the great recession this is a bonus for countries struggling to grow.
The aggression that Russia decided to promote seems to be mellowing as their economy begins to contract and the oil price reduces their revenue streams. They do appear to be working with the Americans to help curtail the income of ‘Daesh’ and the supply of arms. If that does evolve as expected it may help to bring them back into the international forum where they belong.
2015 has been a year that has culminated in events evolving in unexpected and hostile ways to the dismay of most of us. This has been a very brief look at world events but let us hope 2016 turns out to be much more productive.
That’s all for this week, there will be no more comments until the New Year.
Txtreme would like to wish everyone a Happy Christmas and a prosperous New Year.