Growth, recessions, fiscal policy, monetary policy, currencies and global business deals. GIS experts provide forecasts and potential scenarios for all of the economic trends that shape geopolitics.
Global Outlook 2017: China’s rocky year
The election of Donald Trump in the United States brings with it a great deal of uncertainty for China and its leaders. It could face the threat of a trade war, and diplomatic challenges regarding Taiwan and the South China Sea. However, as Washington takes a more isolationist stance, 2017 will also offer China the opportunity to fill the vacuum.
The Black Sea: the EU’s neglected new frontier
The countries of the Black Sea region have had their fair share of conflict throughout history. Instability remains an issue, but all the countries in the area understand the benefits of economic cooperation and have built institutions to facilitate it. The main questions are whether Russia considers such collaboration a threat, whether Turkey can halt migration through the region and whether the EU will reengage.
Global Outlook 2017: Prospects for Xi Jinping
Chinese President Xi Jinping has consolidated his power and now is pushing to make a lasting impact, including by changing the rules to remain in office for a third term. It looks likely that he will achieve his goals, but plenty of obstacles still stand in his way. Expect him to emphasize ideology over practical economics. If his efforts stall, he may turn to the military for support.
Chile’s election will hinge on economy
After months of sluggish growth and political stagnation, Chileans want a fresh face to lead them. But so far, only well-known establishment figures have thrown their hats in the ring for Chile’s presidential election this year. For now, conservative former President Sebastian Pinera is the current front-runner. However, if commodity prices rise and boost the economy, the left could maintain its grip on power.
Global Outlook 2017: Brazil’s improving odds of pulling itself out of crisis
Brazil’s President Michel Temer has received a strong political shot in the arm with the February election of his loyalists to key positions in the legislature. Even if Mr. Temer’s ambitious reform agenda becomes watered down during the inevitable bargaining with the opposition parties, the measures, if passed, should suffice to put the country on track for moderate growth.
Global Outlook 2017: Latin America’s Trump problem
Geography will have a big impact on Latin America in the coming year: the closer a country is to the United States, the worse off it will be. What President Donald Trump does will shape developments in the region, as will the prices of key commodities. If Mr. Trump decides on collaboration instead of unilateral demands, however, the region could see positive developments.
India gambles with its currency
By suddenly pulling most paper money in India out of circulation, Prime Minister Narendra Modi sought to weaken the massive shadow economy and political rivals who feed on it. He also hoped to prepare the ground for a nationwide value-added tax. Ultimately, the scheme may work, but it is causing economic turmoil that could hurt the audacious Indian reformer.
Macedonia’s instability has huge implications for the Balkans
A political crisis in Macedonia is turning into a big problem for the Balkans. Economically weak and susceptible to external pressure and internal instability, the country needs strong support. But the United States and European Union may be turning away, leaving a vacuum that can be filled by Russia and China.
Fed seeks cover in ‘natural’ interest rate
Last summer, commentators began predicting that U.S. monetary policy would no longer aim to avoid deflation and boost growth, but to keep market interest rates close to what economists call the 'natural' rate. The reasoning behind this argument – publicly voiced by Fed Vice Chairman Stanley Fischer, among others – is puzzling. That may be deliberate, as the Fed has plenty of reasons to want a free hand in coming months.
Will the European Union survive until 2025? Three scenarios
The crisis-stricken European Union may disintegrate in a decade, or reinvent and invigorate itself. The most plausible scenario, however, is a pragmatic downsizing: Brussels will abandon its overreaching ambition of ever-closer union and focus on programs that actually benefit EU residents.