The 2015 Economy: Asian Markets Not to Fear
On January 13, 2015, Asian economies’ worries were erased after China made a statement saying that its economy has not slowed down. This timely announcement from China’s camp came as speculations came in that China’s economy is dwindling down at a steady pace.
The International Monetary Fund has lowered its forecast of global economic growth to 3.5 percent. This was short three tenths of a percent from its pronouncement earlier. There has been a gloomy global economic positioning forecasted for this year. The World Bank also is in line with IMF’s predictions. The major contributory factor for the decline in economic growth is the underperformance of Japan and European nations.
Economies of advanced nations such as the US and England are called to maintain fair monetary policies. This is to address the risk of increase in interest rates and the risk of deflation due to cheap prices of oil.
Looking back and moving forward
China’s growth last year was the slowest ever recorded since 1990. Although, there was a slack in economic growth, its gross domestic product has surged 10 times higher. Economists say that fears for China’s economy are unfounded this is manifested when one reviews its past performance.
With Japan under speculation of declining economic growth and Russia suffering tremendously from adverse effects of the cheaper oil prices, the future in Asian market seems to on the brink of teetering down. Asian markets were able to let out a sigh of relief with the news. Another blow on the Asian market would have added to the negative prospect on global economic growth.
Europe, Dollar and Oil
While Asia is under distress, Europe has also its own share of stress in the market.
Last Tuesday the Euro still has not recovered after its lowest trade in the first week of January. It is still stuck at $1.158. Although the Euro is in a bad shape, this is not surprising to investors and speculators.
The dollar on the other hand continued its rising streak.
Oil has not yet rebounded from the decreasing prices. It showed no sign of slowing down from its downward spiral especially after reports that Iraq had record production of oil.