2015 has left economies the world over shuddering in the wake of continued recession, international armed conflicts, and the the rapid slowdown of the world’s single fastest growing national economy. Not all is lost, though. Just as the new year brings hope for personal growth and improvement, so does it usher in a time of hope for greater prosperity on national and international levels. With predictions ranging all over the board, though, what are some things that can really be expected from the 2016 economy?
Consumer Spending Goes Up
At least in the US, the Federal Reserve forecasts and economic growth of around 2.9%, about matching the growth seen in 2015. The prediction is that this will be driven by a rise in consumer spendings, as well as fixed asset investment by businesses. Strong economic growth is also expected to usher in increased employment, with an expectation that unemployment will drop from 5.5% to 5.3% over the course of about two years,, bringing things ever closer to the pre-recession rate.
China Will Continue To Shrink
While prospects may be cautiously optimistic in the US, the Parisian research group, the Organization for Economic Cooperation and Development warns that Chinese growth may continue its trend of slowed manufacturing and imports, with potential lasting effects on economies the world over, dragging down global growth by an estimated 0.5 percentage points by 2017.
China’s economy reported a slowing to 7% in 2015, with predictions taking it down to 6.3% in 2016. While this is still rapid economic growth by comparison with most nations, it’s been taken as a red flag on a global level due largely to China’s role in manufacturing and global trade.
The decline in the internal economy has, as The Guardian succinctly explains, caused the property market in the country to contract, especially when it comes to new construction. This, in turn, has brought down the Chinese need to import oil, iron ore, and other commodities with trade that benefited nations like Australia and Brazil.
If the chinese economy continues to contract, these shockwave may continue to be felt by other nations well in 2016.
Expect More Trade
With the Trans Pacific Partnership a hot topic, nations are gearing up for greater trade, and while the TPP comes with a bunch of good and bad, for the US and the Central American nation of Panama, it does mean more ships getting to more places, which means more trade, more jobs, and economically stimulating spending.
The Panama Canal will open a third set of locks starting in April of 2016, capable of handling ships 2.6 times bigger than the ones currently able to cross the canal. East coast ports including New York and Galveston are gearing up for the increased traffic, with Houston already installing 40 cranes 30 stories high, and preaching the benefits of more trade meaning more jobs in the area.
It’s not going to be a year of unending growth or prosperity, but 2016 is looking up at least in some places when it comes to economic prospects. And after all, isn’t that what we all raise a glass to on New Year’s Eve – just doing a bit better than we could before.