Markets

Timeline: How the Global Economy Played Out in 2015

Published

7 years ago

January 4, 2016

Jeff Desjardins

Timeline: How the Global Economy Played Out in 2015

Many people start a new year with renewed optimism. However, the reality of each new year is not so detached from the previous.

That’s why on the first trading day of 2016, optimism in the markets was short-lived as news out of China was quick to spook investors.

Chinese manufacturing continued to contract for the 10th month in a row in December. The “blue chip” CSI 300 index fell until trading was halted, with losses capped at 7% – its biggest fall in nine years. China also lowered its guidance on the yuan, which dropped to its lowest levels since 2011.

These concerns, along with other disappointing numbers out of the US and UK, eventually spread to other markets. The Nikkei was down 3%, the FTSE 100 was down 2.4%, and the German DAX down 4.3% for its worst opening day to a new year in history.

U.S. markets were in the same boat, opening the day down 2%. Canada’s TSX and TSXV are down less than 1% with much of the damage to commodities already being done.

New Year, Same Problems

Most investors and central bankers find themselves between a rock and a hard place to start 2016.

The Federal Reserve finally raised rates in December, but mainly in the interest of preserving credibility.

While unemployment itself has looked good enough and there has been some wage growth, the labor force participation is at 62.5%, which is essentially its lowest mark since 1977. Meanwhile, the stock market has been volatile, junk bonds have been hammered, and manufacturing contracted in December at the fastest pace in the U.S. in more than six years.

Most major central banks still have rates close to zero, which gives little policy ammunition for any additional stimulus. The flipside of these record-low rates has been soaring (or extremely bubbly) asset prices that have failed to trickle down to Main Street.

A slowing China and general oversupply has led to slumping commodity prices.

Oil has been hammered down to its lowest price since 2003. Copper is trading at $2/lb, which is comparable to its price during the Financial Crisis. These low input prices, in theory, are great for consumers and manufacturers. In reality, however, they usually mean that economic growth is grinding to a halt.

It’s hard to say where markets will turn in 2016, but for now it will continue to be much of the same volatility until the picture becomes clearer.

Original graphic by: The Straits Times

Related Topics:china united states 2015 central banks zirp economic growth 2016

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Mapped: 2023 Inflation Forecasts by Country

Inflation surged on a global scale in 2022, hitting record-level highs in many countries. Could it finally subside in 2023?

Published

9 hours ago

February 8, 2023

Selin Oğuz

Mapped: 2023 Inflation Forecasts by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Inflation surged on a global scale in 2022, hitting record-level highs in many countries. Could it finally subside in 2023?

In the above infographic, we look to answer that question using the World Economic Outlook report by the International Monetary Fund (IMF).

Not Yet Out of the Woods

While the IMF predicts that global inflation peaked in late 2022, rates in 2023 are expected to remain higher than usual in many parts of the world. Following the 8.8% global inflation rate in 2022, the IMF forecasts a 6.6% rate for 2023 and 4.3% rate for 2024 based on their most recent January 2023 update.

For the optimists, the good news is that the double-digit inflation that characterized nearly half the world in 2022 is expected to be less prevalent this year. For the pessimists, on the other hand, looking at countries like Zimbabwe, Venezuela, Turkey, and Poland may suggest that we are far from out of the woods on a global scale.

Here are the countries with the highest forecasted inflation rates in 2023.

Country / Region	Projected Annual Inflation % Change 2023
🇿🇼 Zimbabwe	204.6%
🇻🇪 Venezuela	195.0%
🇸🇩 Sudan	76.9%
🇦🇷 Argentina	76.1%
🇹🇷 Turkiye	51.2%
🇮🇷 Islamic Republic of Iran	40.0%
🇱🇰 Sri Lanka	29.5%
🇪🇹 Ethiopia	28.6%
🇸🇷 Suriname	27.2%
🇸🇱 Sierra Leone	26.8%
🇸🇸 South Sudan	21.7%
🇭🇹 Haiti	21.2%
🇬🇭 Ghana	20.9%
🇵🇰 Pakistan	19.9%
🇳🇬 Nigeria	17.3%
🇾🇪 Yemen	17.1%
🇲🇼 Malawi	16.5%
🇵🇱 Poland	14.3%
🇲🇩 Moldova	13.8%
🇲🇲 Myanmar	13.3%
🇭🇺 Hungary	13.3%
🇧🇾 Belarus	13.1%
🇰🇬 Kyrgyz Republic	12.4%
🇬🇳 Guinea	12.2%
🇲🇳 Mongolia	12.2%
🇪🇬 Egypt	12.0%
🇦🇴 Angola	11.8%
🇰🇿 Kazakhstan	11.3%
🇸🇹 São Tomé and Príncipe	11.2%
🇷🇴 Romania	11.0%
🇺🇿 Uzbekistan	10.8%
🇦🇿 Azerbaijan	10.8%
🇹🇲 Turkmenistan	10.5%
🇸🇰 Slovak Republic	10.1%
🇨🇬 Democratic Republic of the Congo	9.8%
🇿🇲 Zambia	9.6%
🇪🇪 Estonia	9.5%
🇲🇪 Montenegro	9.2%
🇧🇩 Bangladesh	9.1%
🇬🇧 United Kingdom	9.0%

While the above countries fight to sustain their purchasing power, some parts of the world are expected to continue faring exceptionally well against the backdrop of a widespread cost-of-living crisis. Many Asian countries, notably Japan, Taiwan, and China, are all predicted to see inflation lower than 3% in the upcoming year.

When it comes to low inflation, Japan in particular stands out. With strict price controls, negative interest rates, and an aging population, the country is expected to see an inflation rate of just 1.4% in 2023.

Inflation Drivers

While rising food and energy prices accounted for much of the inflation we saw in 2022, the IMF’s World Economic Outlook highlights that core inflation, which excludes food, energy, transport and housing prices, is now also a major driving factor in high inflation rates around the world.

Drivers of Inflation
What makes up core inflation exactly? In this case, it would include things like supply chain cost pressures and the effects of high energy prices slowly trickling down into numerous industries and trends in the labor market, such as the availability of jobs and rising wages. As these macroeconomic factors play out throughout 2023, each can have an effect on inflation.

The Russia-Ukraine conflict and the lingering effects of the COVID-19 pandemic are also still at play in this year’s inflation forecasts. While the latter mainly played out in China in 2022, the possible resurgence of new variants continues to threaten economic recovery worldwide, and the war persists in leaving a mark internationally.

The confluence of macroeconomic factors currently at play is unlike what we’ve seen in a long time. Though the expertise of forecasters can give us a general understanding, how they will actually play out is for us to wait and see.