1 Year behind and year ahead summarized in two words
(San Francisco Chronicle) Asked to sum up 2015 in two words, and to do the same
for their expectations for the coming year, people around the world have this
to say:
Thailand: 2015: "A mess." 2016:
"Fresh start." — Korawut Lam, college student. China: 2015:
"Smog, corruption." 2016: "Lower prices, safe Internet." —
Chen Chen, hairdresser. Brazil: 2015: "Economic crisis." 2016:
"Olympic crisis." — Meire Gomes, jewelry seller. New York: 2015:
"Lousy economy." 2016: "More money." — Ronnie Boyd, who
sells knickknacks and scarves on Times Square
Malaysia: 2015: "Tough life." 2016:
"Better economy." — Tony Wong, businessman. Philippines: 2015:
"Move on." 2016: "New house." — Jojo Moro, Typhoon Haiyan
survivor. France: 2015: "Danger everywhere." 2016:
"Solidarity." — Sylvie Marchal, communication expert in Paris
http://www.sfgate.com/news/world/article/Year-behind-and-year-ahead-summed-up-in-2-words-6729356.php
2 What 2016 holds for Asia (Karishma Vaswani on BBC)
2015 was the year we clocked the following: No country can grow at double digit
growth forever (China). You can't just dig stuff out of the ground and sell it
for ludicrously high prices forever (end of the commodities super-cycle). Cheap
US money doesn't last forever (Fed pushes rates up)
Here are my calls for 2016: The great slowdown of
China continues. Official growth numbers will come in at 6.5%, but real growth
will much likely be far lower than that. The corruption clampdown will continue
to squeeze regional budgets - and that's going to push spending and consumption
down further.
The elephant emerges, but slowly and not without a
few stumbles. India will be the standout performer in 2016, with growth forecast
at more than 7.5%. As a net oil importer, India will benefit from low oil
prices. But it's not all good news. Economic reforms in India are necessary for
its current growth to turn into a structural one. The attempts to pass the GST
(goods and services tax) constitutional amendment bill are still stuck in
parliament over differences with the opposition Congress party.
Japan - more of the same. Japanese companies should
clock slow but steady growth in 2016. A weaker Japanese yen will make exports
more competitive, and as the US Fed continues to raise interest rates, the yen
should become weaker. Expect more monetary stimulus in 2016 as the Bank of
Japan aims to boost the country's flagging economy ahead of an upper house
election next year. Japan's population is shrinking and greying, which means
the labour force is too.
South East Asia - not as bad as we thought, not as
good as we hoped. Some South East Asian economies which have spent the last
decade benefiting from China's demand for their commodities should have used
the last decade of growth to put in place economic reforms. But political
interests outweighed economic ones, and that's now starting to pinch. Malaysia
and Indonesia are also at risk of further currency weakness, and capital
outflows as the US Fed continues to hike interest rates.
Australia - the unlucky country? Australia’s new Prime
Minister Malcolm Turnbull has to navigate Australia out of the curse of the
resource economy. Growth has slowed and mines are slashing jobs. Expect more
mines to close. Mr Turnbull has talked about the need to transition into a
creative, innovative economy and has set up a 1bn Australian dollar ($723.2m)
fund to boost growth in that area.
3 Oil rout to continue in 2016 (Straits Times) Oil
prices remained in a downbeat mood during their final Asian-hours trading
session of 2015 after record US crude inventories reinforced concerns about a
global supply glut that has pulled down prices by a third over the past year.
Crude inventories in the US rose 2.6 million barrels
last week, the US Energy Information Administration said. Analysts had expected
a draw of 2.5 million barrels. Crude prices held losses, with US West Texas
Intermediate (WTI) crude futures trading around $36.70 per barrel on Thursday
(Dec 31) and Brent around $36.60 per barrel. Both benchmarks are down by around
a third over 2015.
The immediate outlook for oil prices remains bleak,
with some analysts like Goldman Sachs saying prices as low as US$20 per barrel
might be necessary to push enough production out of business and allow a
rebalancing of the market. US bank Morgan Stanley said in its outlook for next
year that "headwinds (are) growing for 2016 oil." The bank cites
ongoing increases in available global supplies, despite some cuts by US shale
drillers in particular, as well as a slowdown in demand as the main reasons.
Analysts estimate global crude production exceeds
demand by anywhere between half a million and 2 million barrels every day. This
means that even the most aggressive estimates of expected US production cuts of
500,000 bpd for 2016 would be unlikely to fully rebalance the market.
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