Top 6 major world events in 2015 and impact on the economy.

December 31, 2015 6:55 am

 ’s economy slowed while refugees and migrants arrived in at an ever-growing place. Photo / AP
1) Declining oil prices
’s
decision to let the “markets decide” was admittedly taken in late 2014,
but against expectations, it has stuck with this strategy and shows few
signs of changing. Indeed, it may now be unable to.
A burgeoning
budget deficit means it needs every cent it can get, and must therefore
keep pumping just to stay afloat. The same goes for both other opec
members and for Russia. The glut in supply may have become a much more
prolonged affair than generally appreciated.
For now, the oil
price seems destined to be stuck in a range of $30 ($43.75) to $60,
providing a major economic boost for big consumers such as the united
states and Europe.
If it is permanently anchored in this range,
there are obviously also equal and opposite negative implications for
big producers, including oil majors such as bp and shell.

2) Climate change breakthrough
it’s
easy to be cynical about the outcome of the cop21 agreement in Paris,
but this too may in time have profound implications for the future of
hydrocarbons. If nothing else it symbolically marked the point at which
the world collectively decided, in principle at least, to set a course
for a carbon-free economy.
With wind and solar on track to exceed
100 gigawatts in new installations for the first time this year, 2015
is shaping up to be a transformational year for energy supply.
3) Iranian detente
we
are not yet there, but amid the sense of growing geopolitical
instability, there was at least one piece of good – 2015 was the
year in which came in from the cold. The promised end to sanctions
will in time provide another substantial boost to oil supply, helping to
keep the price low.
4) China slowdown
this
was the year the wheels began to come off the Chinese growth story.
Attempts to rein in runaway credit growth in combination with a vigorous
official crackdown on corruption sent a chill through the world’s
fastest-growing major economy, causing it to stall completely at one
stage this year.
A consequent end to the commodities
“super-cycle” pushed some producer nations, including brazil, into
recession. China’s attempt to shift from reliance on investment and
external demand to domestic consumption may in time be positive for the
world economy, but the transition is testing Beijing’s reputation for
being able to walk on water to its limits.
5) Greek stand-off
that
same sense of abatement in the eurozone crisis was underpinned by
’s farcical – and fruitless – game of political brinkmanship over
continued membership of the single currency.
Elected on an
apparently irreconcilable agenda of both rejecting further austerity and
remaining in the euro, Alexis Tsipras’ populist government went to the
wire and then capitulated, agreeing to a further austerity programme
that was, in some respects, worse than the one originally rejected. For
now, the euro has been saved. That there will be future, existential
crises remains certain.
6) Migrant mayhem
as
one European crisis subsided, another began. The response to the
migrant crisis somehow managed to match even Europe’s disastrous
handling of its economic travails in bumbling, alienating, disjointed
incompetence.
Misguided attempts to impose order on the middle
east has succeeded only in sparking an invasion of migrants and a wave
of jihadist terror on the west’s own doorstep. German chancellor Angela
Merkel’s decision to accept 1 million Syrian refugees brought the EU to
the edge of destruction, with borders re-imposed.

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