The International Monetary Fund (IMF) sees global economic growth in 2018 as small, urging countries to undertake the necessary and ongoing reforms to revive the economy and face challenges.
In its semi-annual report on the global economic situation of 2017, the IMF forecast that global output growth would accelerate to 3.7 percent in 2018, slightly improving by 0.1 percent.
He also predicted a slight growth in the United States in 2018, to reach 2.3 percent in 2018, up 0.2 points. He said the growth continued to benefit from favorable financial conditions and a strong sense of confidence among consumers and industrialists.
In the euro area, the IMF also raised its forecast for growth in 2018 due to the recovery of world trade in particular and the decline in political instability, expected to reach 1.9%.
In China, the world’s second-largest economy, the outlook for growth is high, with a warning of a “sharp slowdown” in the wake of a surge in debt, and the fund is betting growth of 6.8 percent.
World Center for Development Studies:
According to the World Center for Development Studies in London, 2018 will witness major transformations in the world and at all levels. The balance of economic power tends towards East Asian countries whose economies will produce the majority of goods and services in the world while the contribution of the economies of developed countries are decreased compared to it to become 45% while emerging countries contribute 55%.
In Latin America and emerging markets, economic growth is expected at very high rates, driven by high demand, prudent economic policies and commodity price recovery. As it will jump to 2.5%.
Eastern European countries represent a surprise addition to the rise in global growth, with their economies growing to 3.1% in 2017 and expected to fall to 2.3% in 2018. Emerging Asian economies are expected to lead 5.9% growth in 2018 after being 6% in 2017.
Economists say the US economy, the world’s largest economy, will grow by 2.2% in the New Year, while the UK economy is expected to slow to 1.5% next year.
The economies of the Asian countries, led by China and India, are expected to reach 75 percent of global economic growth to control its markets’ dynamic over the global markets.
The report of World Center for Development Studies pointed out that the Chinese Yuan will compete against the Dollar and Euro indicating that the China’s currency has moved from 13th place in world payments to fifth place, surpassing the Canadian and Australian dollars, making it easily surpass the fourth-ranked Japanese yen and becoming part of the important monetary reserves. The same is true for the dollar and the euro.
Global trade of the Yen in the world markets rose to 20.3% while payments in other currencies reached 14.9%.
With the openness of markets in China to global companies, the World Development Studies Center report suggests that many giants will start using the Chinese Yuan in its daily business dealings in the coming years.
While Asian energy consumption will increase and needs a variety of sources, European countries are working to cut costs, reduce dependence on oil and gas through alternative energy, and seek more stable markets in the Middle East.
According to the report of the Center, Asian markets will witness an abundance of oil derivatives, especially as the number of refineries in Asia and the Middle East increases, reducing the revenues of competing refineries in developed countries and lowering the price of fuel.
Iraq plans in 2018:
On the Iraqi economy, Iraq, which was importing last year 14 million liters of gasoline and gas oil a day noting that in 2018 will be refining 1.5 million barrels per day, and will close the file of the import of oil derivatives once and for all.
Within the framework of Prime Minister Haidar al-Abadi’s plans to fight corruption and spoilers to rid Iraq of the dark tunnel, he has formed a committee headed by him to undertake the National Housing Initiative to support the housing department in the implementation of the public housing projects included in the 2018 annual plans for housing by public companies of the Ministry of Housing and the private and mixed sectors companies, and to secure adequate housing for citizens through the development and implementation of the general housing policy. The lands belonging to the State required for housing projects are allocated for the Housing Department and may occupy any land belonging to the State free of charge in coordination with the owner and it has the right to the acquisition of real estate it needs to achieve its objectives. ”
The council urged “to encourage ministries and entities not affiliated with the Ministry to allocate lands for the purpose of building housing complexes through investment,” urging “to encourage vertical construction,” but decided to “maintain the distribution of plots of land allocated to the segments covered by legislation in force in accordance with the conditions Legally defined “.
A New Look for Global Energy Markets:
According to the World Center for Development Studies, Germany began selling gas-fired power plants and providing electricity by alternative energy with a rate 45%.
While Turkey is working to increase the dependence on hydroelectric and nuclear power in addition to coal and natural gas plants in power generation, which reduces the dependence on oil by 35%.
Latin America will invest in alternative energy as Mexico increases its wind energy investment in 2018 to $ 14 billion to increase wind power from 2,551 megawatts to 9,500 megawatts.
As for Ukraine, the energy crisis is a shift in Europe’s view of the energy markets as the European industrial countries try to reduce their dependence on Russian gas, creating new supply lines for oil and gas. In addition to transporting 10 billion cubic meters of gas from the Shah Deniz field in Azerbaijan, Europe will remain in need of more energy resources.
The option to rely on gas produced by Qatar and Iran, which will become the world’s largest gas exporters and even Australia, will not succeed because Asian markets will be the biggest beneficiaries, thus Europe is currently developing gas import platforms at 22 gas terminals, 6 of which are under construction , have capacity for 20 billion cubic meters.
In the coming years, Europe is preparing to receive liquefied natural gas from the United States until the infrastructure in Europe is completed to receive and store these quantities.
New sources of energy, Japan produces gas:
According to the report of the World Center for Development Studies, the technological development in the oil and gas industry and alternative energy will play a decisive role in the economic transformation of many countries, especially importing ones. Japan, which is the third largest gas importer in Asia of natural gas production will be able in 2018 to benefit from “Methane hydrates” in the deep sea commercially, which is reflected negatively on the prices of natural gas globally. Japan, which is estimated to have 1.1 trillion cubic meters of gas in the southeast coast, has enough to compensate for the purchase of liquefied natural gas (LNG) for 10 years.
According to the report, the policies of countries will be affected in the long term by the climate and reduce the dependence on fossil fuels, so the report recommends oil and gas producing countries to diversify sources of income, especially that the importing countries began to diversify energy sources.
Prices of food commodities:
The World Center for Development Studies notes the importance of cooperating with Asian markets in new investments that increase growth opportunities and expand their markets.
The increase in population in Asia and Africa is an important factor in increasing demand for food products, especially agricultural crops, but this increase in demand will not affect price increases because transport costs will be low with multiple global energy sources, which will contribute to lower food costs in the future.
In contrast, the cost of agricultural equipment will rise to $ 220.6 billion in 2018, making it necessary to contribute to the development of agricultural infrastructure, particularly in Asia, Africa and the Middle East, and increase the importance of water as an important source.
The World Development Studies Center predicts that the world will witness a growth in e-commerce, especially in India, where half of its population is developing e-commerce services, making it the first in Asia and the world’s top five economies.
Many risks in 2018
According to study centers, advanced economies are expected to have low inflation levels, with central banks looking to further tighten monetary policy. The outlook for economic growth in 2017-2018 looks strong and monetary policy must be tightened to ward off the next economic recession.
Among the risks that could destabilize global growth at the present time:
1 – geopolitical risks: As we enter 2018 we see more transformations in the economy and demography, the struggle for space and the intensification of the Earth in the time of global confusion, which may be summarized by the general polarization or intersection between the approaches of US President Trump unbridled unilateral and French President Macroun open moderate , and the role of both Kim Jong-il Maneuver and Vladimir Putin warrior and Xi Jinping the next emperor and other competitors in the next stage under the cracking of globalization and attenuation in values and models.
Military analysts fear 2018 will see a nuclear-armed confrontation, especially as nothing seems to be possible to stop Kim III and his nuclear ambitions.
2 – Federal policies misled by the Federal Reserve “The US Central Bank, ie through the US Energy Information Administration in the world, the Americans control the economic markets, the data published by America on the stock of oil are misleading and unclear, for example, US stocks, the declared ones are something and in the market something else , And this is repeated frequently and raising oil prices a day and goes down other the days.
3. Protectionism in the United States of America.
Economic analysts and large global and small economic and financial institutions agree that “the greatest threat to the global economy comes from the protectionism trade policies promised by Trump ” – measures to impose taxes and duties on imports of goods and services as protection for national producers and suppliers, and the matter includes other economic services .
4 – China’s sharp decline in growth: but it remains higher than most other major economies, but if growth slowed, others would need China “more than before,” according to Xinhua.
5. Global Oil Price Fluctuations: The significant decline in oil prices leads to the redistribution of income internationally, between exporters and importers, and is reflected in some of the losers of the oil exporters.
Low prices are a big gain, and if crude oil prices become less than they are, this will result in lower taxes on consumers. This means that they can spend more money on other goods and services, some of which produced by companies in the same country.
6. Correction of financial markets: The correction is defined as a price drop of more than 10% and less than 20%. Why these ratios precisely and who defined it? The history, the historical movement of markets is the basis of the theories of technical analysis and definitions of price terms where over time Market movements are expected based on similar movements that have occurred before.
Some studies have shown that since 1932 there has been a correction in financial markets at a biennial rate, which does not include lower rates or market collapses.
The correction takes place on the basis of the movement of financial markets based on , the principle of supply and demand, such as any commodity or product, as the higher demand , the higher the prices and vice versa.
At the beginning of the rise in prices, the attractiveness of the markets increases with more traders, and in order to enter the market, and they have to buy shares from their holders who bought them at a lower price.
Then, to achieve a return, other people must be available who see in the highest price as an attractive investment and expect to rise to a higher level, this chain can not continue indefinitely. There will come a time when prices reach levels that shareholders think they have received a good return but fewer people expect more rise, and therefore less demand. Then some investors start to worry, and they are convinced to sell their shares at a lower price to keep a portion of the profits instead of losing them.
This is where the reversal of the equation starts, as concern spreads and prices fall due to an attempt to sell the shares at any price, and buyers refrain from buying, waiting for lower prices to enter. The situation of markets in this way means that prices have reached levels that the majority believe are inappropriate and do not reflect the reality , in other words, “wrong prices”.
The UK’s resilient economy is slowing slightly due to lower consumption and lower investments, with developed Asian economies benefiting greatly from the jump in global trade.
Strong global trade flows provide a boost to emerging markets, a modest recovery in commodity prices helps commodity exporting markets, and a strong economic outlook has given confidence to most regions of the world that gradual tightening of monetary policy by the Federal Reserve is necessary and indispensable in light of current economic challenges .
Most Western bankers expect the year 2018 to be good, and they provide several evidence, most notably that global economic growth will record about 3.6%, with coherence of activities and key sectors in various international regions, and expect corporate profits to increase by 10%, on average, especially in the United States and the European Union.
Optimists argue that central banks are keen on optimistic monetary policies for investment noting that the investors are putting their confidence, especially on the US Federal Reserve and the European Central Bank, in terms of good governance of the expected turnaround, especially in terms of gradual and deliberate US rate hike and programmed exit from QE in Europe.
There is almost certainty among many that liquidity will remain relatively plentiful, as interest rates will be gradually raised in line with market climates and inflation.
At the same time, some economists and investors are hinting that the Chinese economy could be slowed down by the debt that has weighed on some public and private sectors, US trade protectionism with collapses which have been widely known and have had a negative impact on trade flows around the world.
Some economists believe bond yields will be weak in 2018 as banking products, taking into account that the expected gradual increase in interest rates will put pressure on bond prices.
On the gold issue , there is no clear reason for its rise in 2018, so stocks remain the best financial assets that can be bet on, provided they diversify its employment and not catch up with the flock as everyone moves hysterically in one direction or another, as a broker of trade says in the European and American markets .
The broker added:”At a time when the prices of encrypted digital currencies (such as Bitcoin) are rising and changing wildly, and some are betting on stocks of emerging technology companies in an exaggerating way , experts recommend focusing more on companies that have cash flows that allow them to expand, In addition of providing revenues in the annual distributions to shareholders. Cash flows are the best guarantee for gaining the distributions. ”
Rawabet Center for Research and Strategic Studies