(1/1/2015) This is the third and final installment of an interview on the outlook for the New Year.
Part 3. Forecasts for International Currency and Commodity Markets
Currency and Commodity Markets in 2015
Tag Archives: forecast
The World Economy in 2015
I am posting in three parts the results of an interview on the year-end outlook. (The questions come from Chosun Daily, leading Korean newspaper. The interview is to be published there in January.)
Part 1. The Global Economy in 2015
Q: Around this time next year, which countries do you predict will be the winners, and which will be the losers of the year?
A: The big gainers will be oil-importing economies, particularly China, India and other Asian countries.
Russia will be the big loser. It has now become clear to all how fragile and vulnerable the Russian economy was, especially with respect to world oil prices. It is easy to forget that commentators a few months ago were declaring Russia less vulnerable to Ukraine-related sanctions than Western Europe. Before that, they were judging the $50 billion 2014 winter Olympics in Sochi a triumph.
Is the US Economy Really About to Go Boom?
Politico asked 8 of us for a prognosis on US growth in the new year. This was my response —
Something important will get better in 2014: Fiscal policy will stop hurting the economy. The results should show up as expansion in such service sectors as health, education and construction.
The biggest impediment to economic expansion over the last three years has been destructive budget policy coming out of the Congress: misguided fiscal drag in the short term (crude cuts in spending, especially under the sequester; the expiration a year ago of Obama’s payroll tax holiday); repeated unnecessary disruptive and uncertainty-maximizing political crises (debt ceiling showdowns and government shutdown); and little progress on the genuine longer-term fiscal problem, which is the 40-year prognosis for U.S. debt (a result of projected rapid growth in entitlement spending). These fiscal failures have together probably subtracted well over a percentage point from U.S. growth in each of the last three years.