The OECD has issued a report indicating that it believes that the world economy will continue to grow and that this is opening the door to future rate hikes by central banks around the world. Despite this pronouncement,a variety of global political risks and economic problems can limit or reverse this growth and lead to s significant market downturn.
The article indicated the risk that the economy has of overheating and creating new bubbles in property prices they could cause long-term damage to the economy. Economic bubbles, When they inevitably burst, can reduce investor confidence and lead to long-term recessions and depressions in the market.
The OECD Issued a similar warning in Ireland back in 2006 before the recession hit. While the warning issued by the OECD is not as dire or significant, and fewer of the believe that the downtrodden to be a significant as the recession of 2007, and you’re taking this warning seriously. Back in 2006 the morning was not taken seriously.
Another risk for the market is the high level of private debt held by individuals across the world. People tend to spend more when they are confident of the economy and save money during down times. This leads to more significant down and upturns in the economic markets, which is Illustrated by the all time market highs.
There are also risks surrounding a lack of unemployment which can lead to inflation through increased wages. There are clearly a lot of risks that the market is facing globally.
British Prime Minister Theresa May has recently spent some time meeting with members of the powerful European Roundtable of Industrialists, at which the politician was warned of coming problems associated with “Brexit”. The U.K. voted in a referendum to leave the European Union and the free trade zone which has raised concerns among top executives over taxation and fees, according to the BBC.
Although Mrs. May tried to put a positive spin on the meeting stating it had been productive others in attendance revealed the industrial executives warned of a grim future for the U.K. Executives attending the meeting came from some of the top 50 companies in the EU including BMW, Nestle, and E.On Among the issues raised over the course of the meeting was a concern that a lack of security concerning the deal the U.K. hopes to achieve with Europe to secure its trade deals following its departure from Europe would lead to a lack of future investment.
There is a hope among top executives that a deal will be reached at some point before “Brexit” goes into effect which will allow the uninterrupted flow of goods in and out of Europe from the U.K. to continue. British-based companies are trying to push for a so-called “soft” border between Northern Ireland and the Irish Republic to allow the movement of goods and people to be simple and efficient following the political disentanglement.
The deadline for the relief initiative on the tariffs on foreign steel and aluminum is Friday and United States President Donald Trump announced that he would not be extending the waiver on these tariffs.
At midnight Thursdays, the exemption will expire and Mexico, Canada, and the European Union (EU) will all be hit with stiff trade penalties. According to a statement by Commerce Secretary Wilbur Ross, the US will begin assessing tariffs of 25 percent on imported steel and 10 percent on imported aluminum.
Both Mexico and the EU wasted no time in saying that they would respond with penalties of their own against the US. Mexico said they would retaliate with tariffs against American pork, cheese, fruit, lamps, and flat steel. The EU did not announce specific products yet but did say that they explore the issue. Canada has not announced retaliatory efforts, however, Prime Minister Justin Trudeau has scheduled a press conference later on Thursday to discuss the plan.
By imposing tariffs on Canada and Mexico, two of the biggest trade partners of the US, negotiations regarding NAFTA could be negatively impacted.
Financial experts worry that the decision to impose these tariffs will raise everyday prices on a variety of products for American consumers. The decision also comes at an inopportune time, as the US is already engaging in an escalating trade dispute with China. On Tuesday, the White House announced that it was continuing its plan to impose tariffs totaling more than $50 billion on Chinese imports.
Italy is undergoing a major economic crisis, and many in the country are blaming France and Germany for the economic problems Italy is facing.
The issue is Italy’s level of debt and their inability to print currency, which is caused by their inclusion in the European Union. France and Germany are the biggest proponents of a single currency for the EU with countries like Italy and Greece with smaller economies who are beholden to the larger members of the EU left without financial leverage to cope with their debt.
The problems the Italy is facing are very comparable to the ones that hit Greece during their own economic crisis. Insufficient tax revenues to offset spending and a stake economy to boot. Tax revenues in Italy are significantly lower due to massive financial tax evasion in the country.
These economic problems are posing risks for the world economy at large. Financial crisis in one country impact others in unknown and unpredicted ways. A loss Of confidenc in Italy can spell financial problems in other countries and raise the cost of borrowing. Further, it can put pressure on some of the other minor countries and Their economies.
The economic crisis in Italy has a ready cause problems for their political reality. Emily is an important component of the EU, which is still the largest economy in the world. How this will impact the larger global economy remains a major risk for financial markets and for international companies in the global economy.
The booming economy of India is expected to grow at a robust average rate of 7.7% GDP through 2019 and is predicted to outpace the economy of China. The latter is in line for a projected growth of rate 6.6% — still pretty good by U.S. standards. The United States is still hoping to achieve 3% growth rate by the end of 2018.
What’s driving a booming Indian economy is a surge in private consumption by an ever-growing middle class with more discretionary money to spend. India is also now getting beyond some transitional measures made in currency exchange policy and the recently enactment of a national good and service tax.
Other factors helping India is more private investment, better productivity and a variety of structural reforms implemented by the government of Prime Minister Narendra Modi.
India’s best economic performance came in 2010 when it achieved a red hot 11.4% growth rate. But it has remained above a comfortable 6% growth rate since then — enough to keep moving this diverse nation of 1.32 billion people out of the economic backwaters it was mired within for most of the previous century.
India has an advantage over China in that its economic system is more open to private enterprise, unlike China where the government is in direct or indirect control over every business venture. Observers say this makes it harder for China to innovate.
India, by contrast, encourages free market entrepreneurship by private companies who tend to be highly innovative compared with the Chinese government-controlled business model.
The economic data for a post-Brexit Britain is in- and the results are not good. Out of the 19 countries currently in the EU, the United Kingdom was in the bottom 3 in terms of growth. Their growth rate was only 0.1 percent. Compare that to Austria’s GDP growth rate at 0.7 percent or Finland at 1.1 percent. This puts into stark contrast the serious negative repercussions that Brexit has already manifested in the economy of the United Kingdom.
One of the biggest issues facing the United Kingdom is the severe drop in business investment. In the first quarter alone, business investment dropped by .2 percent. Companies are reticent to invest money into the economy due to the fact that the political situation between the UK and the European Union is far from being resolved.
Economists expect that GDP growth relative to European mainland counterparts will remain slow. This is partly due to the major gap between European and British work productivity. Essentially, the UK has far less productivity per worker compared to most of their continental counterparts.
Brexit has ended up being a major headache for politicians on both sides of the English Channel. However, many observers have declared a clear winner in all of this kerfuffle. The European Union seems to have gotten the better side of the deal.
Not only does the United Kingdom expect to retain the benefits of the EU while removing itself from their union- they expect the continent to pay for it. This sadly, does not seem to be possible.
Retail stores have had a challenge over the past few years of dealing with the competition of ecommerce. Consumers flock to ecommerce for its convenience and comfortability. Retailers like Sears and Toys R Us that had decades of years of experience with consumers could not compete in the growing economy’s demand for ecommerce.
Though the way consumers shop is shifting, there is one retailer that is still trying to hold its ground in this shifting landscape. J.C. Penny has had a long run of changing out their CEO’s. They have had big names to come into the executive position from the former CEO at Apple and Home Depot. The company is fighting hard to stay profitable, compete with market share and appeal to a newer generation.
It was believed that Penny’s would be able to regain lost market share with the addition of new CEO”s. Then when one of their longest competitor closed hundreds of stores, it was believed Penny’s would be able to take some of Sears customers. With their expansion of Sephora in store shops and adding a new lineup of home appliances and mattresses analysts were sure of the comeback that was suppose to happen for Penny’s. More can be read here about how retailer trying to stay relevant in today’s economy Your text to link… Over the next eighteen months economists, executives and consumers alike will stand by and see if this giant retailer can withstand the ecommerce evolution or succumb like other major retailers.
Despite escalating tensions in trade talks between the United States and China, Starbucks announced on Wednesday its big plans to nearly double its presence on the mainland of China.
The coffee production and retail giant announced that it will build almost 3,000 new storefront locations, bringing its total number of stores from 3,300 to 6,000 in the next four years. For those doing the math, that means the Seattle-based company will be opening 600 Starbucks per year in China, at a rate of one every 15 hours.
Although China is traditionally known as a country that favors tea over coffee, Starbucks is confident that its ambitious expansion will triple its revenue in China over the next five years.
With an already saturated market back in the US, Starbucks is hoping that its business will continue to grow at a record pace in China and other Asian nations as it has been for the last few months. Revenue in Asia skyrocketed over 50 percent last quarter when compared to the same period in the year prior. Compare that to domestic sales and revenue in Latin America, which saw an average earning of just 8 percent in the last earnings quarter.
The expansion announcement comes on the heels of the December opening of Starbucks’ largest store ever located in Shanghai. At 33,000 square feet, the store also sells tea and other traditional Chinese food and beverage offerings. As Chinese consumers continue to embrace portable beverages, the sky is the limit with Starbucks.
The fallout from the United States’ decision to pull out of the Iran nuclear deal is being felt more than one week later.
On Wednesday, French oil and gas company Total announced that it was planning to cease operations of a $1 billion dollar gas project located in Iran because of the possibility of new US sanctions leveled against the country. Executives at Total said that it will wind down its operations in Iran by November if the United States makes the decision to reinstate the sanctions that were waived in the face of the past deal. The rules of the 2015 pact with Iran and many other countries were set to deter Iran from its nuclear program.
In 2017, the energy giant was given a contract with an initial investment of $1 billion to develop phase 11 of the South Pars gas field in Iran. Because sanctions had been lifted against Iran in 2015, Total and many other global companies have been exploring business opportunities in that area. These ventures are now facing much uncertainty due to President Donald Trump’s decision to pull out of the deal. In addition to Total, Danish tank manufacturer Maersk stated that although it would continue to fulfill current contracts in Iran, it would not be pursuing new business in the country. German insurer Allianz also decided to cease operations in Iran while waiting to see how the US withdraw from the deal would affect business ventures.
Prince Harry and Meghan Markle will be married in England on Saturday, and members of the media have covered the royal wedding from just about every conceivable angle. However, not much has been written about who is paying for the massive event.
According to Business Insider, the wedding will cost an estimated $45.8 million. In comparison, the 2011 wedding of Prince William and Kate Middleton cost $34 million.
Who will get stuck with the bill? Three different parties.
Experts say that the biggest expense for a royal wedding is security and police protection. For example, police protection for Prince William and Kate Middleton’s wedding cost $8.7 million, half of which was for police overtime. This portion of Prince Harry and Meghan Markle’s wedding bill will be paid by the U.K. government.
The next biggest wedding expense will be the wedding itself, including invitations, flowers, food and music. This will be paid by the royal family. The family makes its money through a sovereign grant funded by the Crown Estate’s yearly profits. Queen Elizabeth II will earn approximately $105 million from these profits in 2018.
The last expense for the big event is the wedding dress. Markle has reportedly chosen a $550,000 gown, and she is expected to foot the bill herself. Given that she earned millions during her acting career, that shouldn’t be a problem.
While Prince Harry and Meghan Markle’s wedding is jaw-droppingly expensive, it is worth it to the U.K. economy. Experts say the country will rake in around $1.43 billion through tourism, merchandising and public relations perks.