The global economy has witnessed historical stations and an important events in the 2016 contributed to the formation of quasi-clear vision of the path of the events of 2017, and possibly beyond, And marked the year that is about to say goodbye after a few days of the momentum of events and the emergence of a kind of international economic cooperation to stand in the face of the many challenges facing the international community, and on the other hand, a year saw an important decisions in Europe and global oil markets.
- Global oil markets
The year of 2016 was began with the most important economic event, a collapse in oil prices to “bottom” that the price per barrel reached up to $ 27 , and a glut of oil supply reached to record ratios surpassed 1.6 million barrels per day, while global production reached 94 million barrels a day, and it was the biggest production from Russia, which has pumped in markets 11 million barrels per day, according to observers was the largest production since the Soviet era, and the Saudi production has reached an average record at about 10.7 million barrels per day, as well as the production of countries such as Iraq was increased, where an output reached of 4.7 million barrels per day, Iran’s production was about 3.7 million barrels per day after the lifting of UN sanctions .The total OPEC production has exceeded 33.6 million barrels per day for the first time in several years.
In the midst of this frenetic competition in the oil market and the push and pull between the traditional producers and non-traditional producers (shale oil) prices tumbled and continued at low rates that led to the launch of the cries of some countries which are close to bankruptcy because its dependence on oil as a major income revenue source, and the leading countries began in oil markets looking for a way out, and began in the first quarter of 2016, the first of these serious attempts specifically was the Doha meeting, followed by a meeting of Algeria down to Vienna agreement earlier this month, which led to the agreement on the fixing of the production ceiling, which this agreement has contributed to the recovery of global oil prices, and therefore this agreement will be the beginning of a new phase of the oil markets that could end two years of the toughest years that the oil market witnessed in decades.
- Economy and raising interest
The markets are watching results of raising the US interest rates, according to analysts, the market has become a quasi-certainty that the US fed will raise interest rates by 25 basis points, and considers this the second time the Fed to raise interest rates during the last 10 years, as well as the markets close to the full appreciation to raise twice next year, as the research team explained at BNP Paribas.
This appreciation could cause large disturbances to the emerging economies. This is likely to lead to higher borrowing costs and lower exchange rates because the money will move toward the United States to take advantage of higher interest rates there. This in turn will make the repayment of loans in the currency of dollar very high price.
According to IMF data, the global debt ceiling has reached its highest level since 2000, surpassing the barrier of 225% of GDP.
Regarding the Arab region , the chief economist predicted for the Middle East and North Africa in the bank “HSBC” Simon Williams, the return of investor confidence to the Gulf region when the amendments adopted by the governments of the region are entering into effect
.
Williams said: “I do not think that global developments will support the growth of the region, especially with the rise of the dollar and raise US interest rates.”
He ruled out the occurrence of financial crises and currency crises, but expressed his belief that the global economy is entering a difficult year, “I do not see a recovery in sight yet.”
As for the Chinese economy, the second economy in the world, it is expected that the state of the slowdown will continue that put its shadow on the economy , according to experts the Economic growth paid by debt can not continue at the same pace, especially after China’s total debt amounted to GDP to around 240 %. Add to this that the strength of the dollar and rising interest pose a challenge to the Chinese market and other emerging markets, which benefited greatly from its position as a refuge for those seeking returns in light of low interest rates.
- European continent
European continent has seen in the year 2016 many of the events that have been of great importance, Britain ‘s referendum out of the union shaped the largest of these events, and many did not account that this separation will be the beginning of the challenge for the European Union, we have seen after that loudness of European populism, and this means according to observers the painful beginning to the end of the biggest union in the world, as well as the observers see that 2017 will see a continuation of Britain measures out of the EU , as well as elections in both France and Germany, the Netherlands and the prospect of Italy also, risks to growth; the win of populists candidates will increase the isolationism and protectionism in away to doubt about the continued existence of the European Union and the euro zone itself Add to that the Greek debt crisis; which would increase uncertainty and volatility in the financial markets, adversely affecting growth.
- A preliminary reading of the features of the world economy in 2017
Initial reading of what will be the economic situation in 2017 predicted that the world in front of a year full of significant events, the year we may call it the year of the difficult decisions that could change the features of the global economy, and this is based primarily on economic and political transformations and the populist mobility would be witnessed by the European continent as we have already said, and the growth of the Chinese economy, Add to this the arrival of presidential candidate Donald Trump to the White House and the indications of his economic policy , on the other hand the next year bears good news for the oil markets, where forecast to the recovery in oil prices, this also depends on the commitment of producing countries to this agreement, and despite the above, but the prediction for the future is not easy thing but it remains to expectations the sidelines can be comparable to what will be the situation in the future, but the coming days is the main chapter of any expectations.
Amer Al-Omran
Translated by : Mudhaffar Alkusairi
Rawabet Center for Research and Strategic Studies