World Economy Trends Analytical Overview
The aim of this paper is to analyze current economic trends and major financial and political events that had and will have an impact on the world economy. We will make an overview of the news and blog posts published by The Wall Street Journal experts in the horizon of the last three months period. As the global economy state has been continuously volatile due to financial and housing market turmoil including USA and Asia, the thorough observing the news can be useful in forecasting and strategic financial planning. The analysis will consist of the sections covering world economy, United States, Latin America and Europe, Trans Pacific Partnership, Asia and Pacific Region, Consumer Moods and Corporation topics.
The International Monetary Fund meeting has been the latest important event bringing together world’s top financial officials and was held recently on 9-11 October 2015 (Imf.org) in order to set mutual efforts to search for new promising engines for pulling the global economy out of a down. The experts believe that the world’s economy will continue its negative trend, for both advanced and developing economies with growing risks of global recession.
According to the Institute of International Finance, 2015 is going to be the first year of capital outflow from the developing economies in the past 27 years with more than billion dollars escaping from Brazil, Turkey, and South Africa. (Talley) The capital outflow is estimated to be around $40 billion during the 3rd quarter 2015; investors are selling stock and bonds in the amounts that can be compared to the panic in 2008. The companies from the developing markets have increased their borrowings to more than $18 trillion during last year which is four times more than in 2004. (Cui)
What is notable is that even developing economies like China and Brazil that have been showing stable growth over the last years, will struggle without economy renovations, while China will concentrate on domestic consumption and will be less reliant on industrial raw materials imports. Brazil’s GDP growth is projected to hit negative 3% in 2015 and 1% in 2016. The world GPD growth is forecasted to reach 3.1 % in 2015, which is 0.3% less than previous estimations. Such a hasty drop is connected with decreased exports to China, leaving Brazil’s traders stuck in the heavy debts. (Talley)
United States, Latin America and Europe
The US Federal Reserve officials are seriously considering the possibility of increasing its interest rates, which would bring investors’ money into US banking system and enhance US economy in a short while, but could cause emerging economies currency weakening, inflation, and further economic downturn. This issue was one of the top discussions at the recent IMF annual meeting in October 2015 as well, with split opinions on this matter. IMF officials recommend that Federal Reserve postpones the interest rate increase until 2016 in order to “give Europe time to deal with its …