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Economic Daily News: Risks facing global economy in 2015

Economic Daily News: Risks facing global economy in 2015

Major international organizations generally hold the view that the global economy will grow at a faster pace in 2015 than in 2014. In Taiwan, most economic think tanks believe that the domestic economy will maintain moderate growth next year. At a time when the global economic and financial environment is changing rapidly, however, people should not overlook the potential risks behind such "cautious optimism." With the U.S. Federal Reserve set to end its bond-buying program in October, markets worldwide are shifting their attention to when and how America will increase its interest rates. The United States last raised interest rates eight years ago, and there are concerns that new rate hikes would have unfavorable effects on global financial markets. The fact that Europe and America are implementing completely opposite monetary policies could lead to different judgments about the global financial situation among investors, which could significantly increase market volatility. Politically, the threat posed by Middle East militant group ISIS to global security, the situation in Ukraine and the democracy protests in Hong Kong are factors that may affect the economic environment. In the United States, the Republican Party could gain control of both the Senate and the House of Representatives in the Nov. 4 midterm elections, which could prevent President Barack Obama's policies from moving forward. Such a political stalemate could also undermine U.S. economic growth. Another factor is the downturn in China's property market. Because the property sector accounts for over 40 percent of China's gross domestic product, the slump threatens the growth of the world's second-largest economy. (Editorial abstract -- Oct. 8, 2014) (By Y.F. Low)


Updated : 2021-01-18 06:41 GMT+08:00