Bright colors in the 2015 economic picture

(Baonghean) - 6 years after the global financial and economic crisis in 2008, the world economic “picture” seems to have important highlights to become “brighter”. Looking at the optimistic indicators from the world’s leading economies and the factors that can influence it, the global economy in the long term can be optimistic about the economic prospects in 2015.

Optimistic index from economic "locomotives"

The US - the world's largest economy continues to receive positive news as consumer spending increases thanks to inflationary adjustments and low fuel prices. The driving force for US households to spend more is the most stable job market since 1999, low credit costs and increasingly cheap fuel prices. The consumer sector, which contributes more than 70% to US economic activities, is showing the most positive signs in the past 4 years and may even improve further in the context of rising wages and stable prices. In addition, the US economy also received good news from the auto industry.

According to the latest published data, the demand for cars in the US continues to be stable. All the leading manufacturers in this country reported that January 2015 was the "most profitable" month in the past 7 years, in which "giant" General Motors Co. sold the most cars. Analysts said one of the reasons was that fuel costs fell to the lowest level since 2009, averaging only 2.03 USD/1 gallon of gasoline (about 11,000 VND/liter).

Meanwhile, in Japan, a series of positive signals appeared in the country's economy when the Nikkei index rose to its highest level in the past 15 years in the morning trading session on March 2 and many other figures showed an improvement. The Japanese Ministry of Finance on the same day announced economic data for the fourth quarter of 2014 showing that business investment increased by 2.8% compared to the same period last year. This shows that the business sector is ready to maintain investment despite the decline in consumer demand after the first tax increase to 8% in April 2014. Specifically, investment in all non-financial sectors such as factory construction and new equipment installation increased for the seventh consecutive quarter to 9.71 trillion yen (equivalent to 81 billion USD), while investment by manufacturing enterprises increased 8 percent year-on-year to 3.32 trillion yen for the second consecutive quarter and that of non-manufacturing enterprises increased 0.3 percent to 6.38 trillion yen, up for the seventh consecutive quarter. The above data will affect the adjustment of Japan's economic growth indicators that the country's cabinet is expected to announce on GDP data for the same period on March 9.

Along with the US and Japan, the European economic picture has also seen bright spots after a rather gloomy 2014. Spain has just raised its economic growth forecast to 2.4% from 2.0% and said Madrid will create about half a million jobs in 2015. Meanwhile, in Germany, the consumer confidence index has reached its highest level in the past 13 years, marking optimism about the country's economy. Another positive signal was recorded in the German labor market when the German Federal Labor Agency (BA) recently announced that the number of unemployed people in February was only 3.017 million, the lowest number in February since 1991. Such a decrease in the number of unemployed people is surprising, because normally in February, the number of unemployed people in Germany always increases slightly. Italy ended its recession after 14 consecutive quarters of negative GDP growth. This gives hope for the country's economic recovery.

Economic experts say it is undeniable that the world economy still faces many major risks and unpredictable factors, but positive indicators and signals from economic "locomotives" in the first months of this year allow for optimism about the economic outlook for 2015.

The economy benefits from lower oil prices

In the context of world oil prices still "standing still" below the threshold of 50 USD/barrel and showing no signs of increasing, many people are concerned that a deep and long-term drop in oil prices could have a negative impact on the global economy. However, according to a survey by Bloomberg, most respondents believe that falling oil prices are beneficial for global economic growth. In fact, every industry uses energy, so when oil prices fall, input costs also fall. This will improve company profits, increase consumer purchasing power and ultimately promote investment in production. According to analyst Nariman Behravesh (Davos, Switzerland), when energy costs are lower, consumers and businesses will save more money to spend on other goods and services.

According to forecasts, world oil prices are unlikely to increase sharply this year. The context of 2015 is forecasted to be that oil prices continue to be affected by large supplies, oil from North America will increase slowly and the risk of geopolitical crisis continues to threaten the world market. Many economists believe that the most reasonable price may be around the threshold of 50-60 USD/barrel. Thus, oil prices will not change much compared to the present. This is a good opportunity for oil-importing countries to serve the economic development process. In a recent report, the World Bank said that low oil prices will lead to a shift in the scale of real income from oil-exporting developing countries to oil-importing developing countries. For both exporting and importing countries, low oil prices are an opportunity to carry out reforms to increase financial resources and promote environmental goals.

More broadly, if governments take advantage of today’s oil price slump to implement important energy policy reforms, the benefits could transform and improve the structure of their economies in the future. Falling oil prices also provide an opportunity to reform energy subsidies and taxes for both oil-exporting and oil-importing countries. For oil-importing countries, the savings from cutting energy subsidies should generally be used to invest in the poor, while reduced budget deficits allow for increased investment in affordable infrastructure. With the right approach, the current oil price volatility could represent a significant turning point on the path to a more sustainable future, characterized by shared prosperity and progress in poverty reduction.

Thanh Huyen