4 key risks to the global economy
4 key risks to the global economy
08/26/2015 07:43 GMT
Agencies – the “EIU” Foundation classifies the security and political risks the most threat to the global economy, which may affect growth in the next two years, and in light of the challenges faced by the global economic.
And classified these risks that have a disparate impact on the global economy according to the level of risk and the extent of its impact, the following are the main challenges faced by the global economy.
1. The collapse of the Chinese stock market and lower commodity prices
Global stock markets have seen over the past two days have fallen as a result of a large decline in the Chinese stock market caused by growing concerns about the Chinese economy and the drop in oil prices to record levels.
They came retreats after the failure of Chinese authorities to stimulate the economy and the recovery of the export sector, and the efforts of the Chinese government to support the market by allowing the pension fund to invest in the domestic market for the shares not exceeding 30% of its assets approaching $ 550 billion did not stop rein strong sales wave .
To drop the second largest economy in the world the Chinese economy a significant impact on the markets the fact that China’s top consumer of commodities.
In the oil markets, crude “Brent” fell and the US to their lowest levels in six and a half years, with a trade, Brent below $ 44 a barrel as US crude fell to below $ 40 a barrel as a result of concerns about the Chinese economy, since China is the second largest oil consumer in the world , and in light of excess supply in global markets.
2. the growing threat of terrorism and its impact on the stability of the global economy
Controlled organization “Islamic State” terrorist on the areas of the territory of Syria and Iraq and is recruiting many people around the world to its ranks, and the impact of terrorist attacks carried out by the negative regulation on investors and the business sector, where usually the security crises, especially in the sensitive areas of the world negative repercussions on markets Global money.
3. fiscal policy divergence will lead to higher rates of volatility in the currency market
It is expected that the Board of the US Federal Reserve this year to raise its main interest rate from the levels of standard low-current, amounting to 0-0.25% annually, which may lead to volatility in emerging market currencies and the decline in capital goods, and pushes investors to go for investment safe havens such as gold.
This was the International Monetary Fund has warned of the risk of fluctuations in currency exchange rates, the fear of damage to some of the emerging countries of the weakness of commodity prices and exports.
The International Monetary and Financial Affairs said in a Fund: “While the United States is seeking to raise interest rates, there is a need to move towards normalization of effective policy to reduce the negative effects on other economies.”
The Commission, which represents the 188 member states of the International Monetary Fund She added: “While recovering economies in the developed countries, some emerging countries hit by the weakness of commodity prices and exports.”
4. geopolitical tensions in the world
Continue the escalation of geopolitical tensions in the Middle East, Libya and Ukraine in exposing the world oil market risk, which is important for the business sector economic indicator, in addition to the impact on trade relations between the countries.