Despite recent success in generating jobs and overcoming the stresses caused by the financial crisis better than many other countries, the UK economy still has many problems. The economy faces a large balance of trade deficit, £34.8 billion in 2014, as well of course as a large amount of government debt.
China has ordered 600,000 tons of corn from Ukraine for 2015. The Chinese previously rejected the U.S. brand in 2014, which contained an unacceptable genetically modified trait.
The final Budget before the general election is fast approaching. Separated from the election by just 50 days, it is not likely to lack political content. But the key issue remains the deficit – and how successful George Osborne can claim the government has been at tackling it.
In July 2014, the Abe government adopted the ‘Three Principles on Transfer of Defense Equipment and Technology’, which approved Japanese weapons exports as long as certain conditions are met.
Based on this new, less restrictive policy on weapons exports Japan has concluded two major deals. The first is to supply surface-to-air missile parts to the US and the second to conduct joint research on air-to-air missiles with the United Kingdom. The proposed Australian submarine deal would eclipse both of these in terms of scale and significance.
Stock markets in Europe and Japan have seen double-digit gains in 2015 as quantitative easing programs fuels equities in those markets.
Meanwhile, the United States has seen stocks remain pressured despite bullish calls from bankers and economists, who remain optimistic about the future of the American economy. In many cases, analysts have argued that the U.S. remains the most stable economy in the world, as geopolitical instability among Europe’s neighbors and demographic pressures in Asia limit alternatives abroad.
Tepid U.S. Stocks
The British economy has not been a pretty sight in recent years. GDP per capita was 15.8% lower in 2014 than we would expect from historical pre-2008 trends. Austerity has certainly played a role in this poor performance, but is George Osborne right to say that things would have been even worse if the pace of fiscal consolidation had been slower? And can we expect a different fiscal policy if a new chancellor comes into office following May’s general election?
Austerity past and present
Recent events have reignited separatist conflict in the Philippines.
Demand for goods and services are falling, causing households to take on less debt and retail sales to slow.
Household debt growth slowed to 2.7% on a year-over-year basis in the last three months of 2014, down 0.1 points from the previous quarter and 0.8 points from the highest point in 2014. While above the previous year’s growth of 0.6%, there was an expectation of a continued acceleration of nonfinancial debt at the end of 2014 as consumers grew more confident and used credit to make more purchases in the economy. That trend has failed to materialize.
Indonesia’s Natuna Islands could become yet another security flashpoint in the South China Sea. The islands’ proximity to the disputed areas in the South China Sea, and isolation from Jakarta, makes it one of Indonesia’s most vulnerable regions. Any effective security and military presence in the area will depend on local economic and infrastructure development. How will Indonesia under President Joko Widodo (Jokowi) manage this potential point of contention with China?
Lest we be too quick to forget whence we came, America is now 9-months into lower gasoline prices, which started their swoon the week of June 30, 2015 from a lofty national average just under $3.70, tumbling almost every subsequent week before bottoming and bouncing from $2.02 the end of January, according to gasbuddy.com.
