Thursday, January 14, 2016
Climate change 'biggest threat to global economy in 2016'; Japan shares dive after US sell off; South Korea growth forecast trimmed to 3%
1 Climate change ‘biggest threat to global economy in 2016 (Larry Elliott in The Guardian) A catastrophe caused by climate change is seen as the biggest potential threat to the global economy in 2016, according to a survey of 750 experts conducted by the World Economic Forum.
The annual assessment of risks conducted by the WEF before its annual meeting in Davos on 20-23 January showed that global warming had catapulted its way to the top of the list of concerns.
A failure of climate change mitigation and adaptation was seen as likely to have a bigger impact than the spread of weapons of mass destruction, water crises, mass involuntary migration and a severe energy price shock – the first time in the 11 years of the Global Risks report that the environment has been in first place.
The WEF said evidence was mounting that inter-connections between risks were becoming stronger. It cited links between climate change and involuntary migration or international security, noting that these often had “major and unpredictable impacts”.
The WEF said the broad range of risks – from environmental to geopolitical and economic – was unprecedented. It added that risks appeared to be rising, with global average surface temperatures increasing by more than 1C over pre-industrial levels for the first time, and the number of forcibly displaced people at 59.5 million – almost 50% more than in 1940 when the second world war was being fought.
had fallen over 2% as a oil stockpiles report and a Federal Reserve survey suggested more sluggish growth. Weak economic data from Japan also dented investors' confidence. Government data showed that core machinery orders fell 14.4% in November from the previous month.
The orders were down for the first time in three months in the world's third largest economy. Brent crude prices, meanwhile, fell 0.9% to $30.05 a barrel after earlier hitting a fresh 12-year low of $29.73.
Australia's S&P/ASX 200 share index ended 1.6% lower at 4,909.40, despite the release of better than expected employment data. The unemployment rate in the country was 5.8% in December, with fewer jobs lost than economists were expecting. The country lost 1,000 new jobs, as against expectations of 10,000.
3 South Korea growth outlook trimmed to 3% (San Francisco Chronicle) South Korea's central bank trimmed its growth forecast for the country's economy on Thursday, citing the instability in Chinese markets.
The Bank of Korea predicted that Asia's fourth-largest economy will grow 3.0 percent this year, down from an earlier estimate of 3.2 percent. Bank of Korea Gov. Lee Ju-yeol said the volatility in Chinese financial markets and a sharp drop in the South Korean currency were behind the revision.
The central bank said a recovery in consumer spending could be limited by the phase-out in consumption tax cuts and slowing sales of housing markets. Private capital spending will likely see slower growth due to uncertainties at home and abroad, it added.
The bank's outlook is more optimistic than private economic research centers but is broadly in line with the financial ministry's forecast. Still, its downward revision is the latest reminder that the once dynamic Asian economy is losing steam.
South Korean manufacturing companies that used to fuel growth and development of the country with exports of ships, cars, steel, televisions and memory chips are quickly losing edge, coming under threats from Chinese companies. Exports last year dropped 8 percent from a year earlier. The country's trade ministry said exports will recovery slightly this year, gaining 2 percent from last year.