- OECD Lifts Global Growth Forecasts on Expected Trump Stimulus
The OECD lifted its global growth forecasts for 2017 and predicted expansion in 2018 will reach its fastest pace in half a decade as Donald Trump’s planned fiscal stimulus provides a boost to major economies.
World gross domestic product will now expand 3.3 percent next year, up by 0.1 percentage point from September’s forecast, the Organization for Economic Cooperation and Development said in a semi-annual report. The Paris-based organization sees the global economy expanding 3.6 percent in 2018, the fastest pace since 2011.
The S&P 500 Index has risen to a record high and bond yields have increased since Trump won the U.S. election on Nov. 8. The president-elect’s promises of spending on infrastructure as well as tax cuts should lift U.S. demand, spurring investment and boosting overall output once he takes office in January, increases that should also spill over into the rest of the world, according to the OECD.
“In the aftermath of the U.S. elections, there is widespread expectation of a significant change in direction for macroeconomic policy,” the OECD said. “The boost to U.S. final demand also strengthens import growth” and “the stimulus boosts global GDP growth by around 0.1 percentage point in 2017 and 0.3 percentage point in 2018.”
Forecasts increased for all major economies in 2017.
The U.S. itself will grow 2.3 percent in 2017 and 3 percent in 2018, while the euro area will expand 1.6 percent and 1.7 percent, respectively, the OECD predicted. Growth will now be 6.4 percent and 6.1 percent in China and 1 percent and 0.8 percent in Japan, the OECD said.
The organization urged other governments to consider the same fiscal medicine.
“For the last five years the global economy has been in a low growth trap,” OECD Chief Economist Catherine Mann wrote in the report. Exiting this “depends on policy choices beyond those of monetary authorities,” she said, pointing to both fiscal stimulus and structural reform.
In Mann’s view, debt burdens are stabilizing and interest rates remain low, providing a window of opportunity for stimulus now that will actually lower borrowing as a percentage of GDP.
“Debt-to-GDP ratios in most advanced countries have flattened,” she wrote. “It is past time to focus on expanding the denominator — GDP growth.”
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
Business2 months ago
Npower News on Permanency for Batch A, B
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Business3 months ago
Again, UBA Reduces International Spending Limit on Naira Card as Forex Scarcity Persists
Cryptocurrency2 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business2 months ago
FG to Absorb Exited N-power Beneficiaries into New Program
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020