Global and economic growth prospects www.stephenarcher.eu
Agenda • Forecasting : For you and by you • The outlook for the world • The view for Africa • Outliers: Trump and the breakup of Europe
Major change ahead – 1900! Relative Share of World Manufacturing Output 1750-1900 China CUG
Share of world GDP 1969-2009 NOfP
6 “In 2008, the consensus from forecasters was that not a single economy would fall into recession in 2009” Tim Harford-Financial Times
IMF’s revisions of world growth
Economic forecasting ignores too much of the real behaviour of people Psychology Traditional Economics People might be predisposed, or Economics agents act conditioned by their rationally 100% of the environment to time, maximising their behave in certain lifetime happiness; utility ways
12 “You should do the mathematics but then burn the paper and write it down in words. Maths and models should be ‘aids to thinking’, not substitutes for it”. Alfred Marshall -the founder of Cambridge economics
Global Probity …. ?
(2013) (2001) (2014/2015)
Bribery scandals in the news
World Corruption Inde x
18 Credibility “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you'll do things differently.” Warren Buffett
Outlook
2016 GDP Outlook
Cracks in the BRIC (s)
Corruption by country
Emerging acronyms: BRICS, MINT s and EAGLEs
RISKS
The Terror of Terror
Dresden
G8 2013 Ireland
Global outlook
33 ‘’In football the game is complicated by….. ..the presence of the other team ’’
China – dropping the ball? • Debt stimulated 2009 -2011 and failed • Debt burdened 2011… • Over capacity • Slowed demand • Stimulus not working • Property bubble
Debts of counties of the European Union in % of GDP
The market can remain irrational … ...for longer than you can remain insolvent. John Maynard Keynes 1883 - 1946
Conditions for an effective fiscal pact in Eurozone Central fiscal autonomy Regional and sustainable Central monetary autonomy electorate Central control of banks acquiescence Central budgeting across all nations to the above… Central political leadership
Choose to be optimistic it feels better.
Three ages of competitiveness 1990 2000 1980 Working Better Working Cheaper Working Elsewhere Re-Engineering Out-Sourcing Globalisation
The Fourth Age Source: Hansen Medical In skilling
Electronic connectivity “The biggest revolution since the telephone and the radio combined”
Electronic connectivity The impact • The final stage in shrinking the global village • Expertise can be found and used more easily • Small enterprises can compete with big • Intellect and skills can out gun scale and volume • Intellectual property access is opened up • Corporates can achieve differentiation with virtual resources • Speed and time are no longer barriers
Areas of greatest earning power in emerging economies
Workforce size will expand with population growth
Stand out from the crowd
Thank you
Questions? www.stephenarcher.eu
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