Who was behind the blocking growth of the world economy?!

12/19/2015 11:24 GMT

Agencies -
Two events characterized the end of this year, the first is the interest rate in the United States and the second talks between OPEC countries and Russia on the reduction of production failure. These two events will have negative repercussions on the global economy as Sazarh analysis Altala.ans economic logic that the decline in oil prices reduces the cost to the economies of countries, so the inevitable result will be the strengthening of global economic growth, especially the growth of the advanced economies.

But NOTE global growth since mid-2014 (with the price of a barrel of oil over 115 USD) and until the end of this year (with barrels less than 40 USD), shows that the registered global growth is much less than expected as the decline the price of a barrel of oil ($ 75 USD), but did not give a growth rate of 0.5%.

This is primarily due to the global economic framework much change is necessary to take some other economic factors in the theoretical economic models that are used in economic policy-making.

If we take into account the production and supply and demand factors in the oil market, we see that the volume of OPEC countries constitute 47% of the world's daily production. And this share has been used by OPEC to control prices by reducing the quantity raise in line with profitable prices for these countries.

In contrast, oil-producing countries that do not belong to OPEC production at full capacity, which means that these countries do not have any margin of movement on the one hand to cut production primarily hits the economies and consequently reduces their income. From this standpoint played OPEC countries and continues to play a key role in determining the price of a barrel of oil.

However, in the present time it spins fierce battle within OPEC countries (among them), and between OPEC countries and between Russia and the United States on the distribution of quotas, especially with the anticipated return to Iran next year with a fully about the lifting of sanctions.

If, this conflict has led to quotas, especially after the agreement on the Iranian nuclear program to defect in the structure of supply and demand (supply and demand factors) and that in parallel any supply increased as a result of the above, and demand has fallen as a result of Chinese demand fell primarily on oil and materials initial.

The recorded since mid-year growth in 2014 to today's lower than expected because of fundamental structural change among the other advanced economies, particularly developing and oil-exporting economies, which became the largest weight in the global economy.

If the oil-importing countries in terms of profit by reducing the cost, but the exporting countries suffer huge losses as a result of the massive drop in oil prices in a period of not more than one year and a half. This is like a game of total zero (Jeu somme nulle).

This fact is the economic rules of the game or at least the perception of the oil and its role in the economy. In the past, the price of oil low- considered the main engine of economic cycles, but today and with the growing weight of oil producers has become less weight the price of oil in the recovery of the economic cycle, and this is what has been demonstrated in the past year and a half with the barrel at a lower price by 75 USD Relative to the former while increasing the growth did not exceed 0.5% in.

On the other hand, emerging markets benefited from high investment ratio with US monetary policy that has been followed during the 7 years. This benefit came through low interest rates in the United States historically known Bmassash capital due to the evolution of the US economy and large confidence in their political systems and laws.

Today, with the rate hike, it is expected to have a negative impact on the increase of foreign investment in developing economies and the economies of oil-producing countries.

As a significant portion of these investments goes to the energy sector, and the reduction of capital in these countries will pay a mechanic to reduce production. Thus, the oil prices will return to rise with the natural erosion of the capacity of oil production.

If we look at some of the developing countries, we see that countries such as China and India was spending huge sums of money to support the fuel in the internal market and the funds pose a significant burden on budgets. Today, with low oil prices, the government provides a lot on its treasury, but at the same time losing the capital that will go to the United States.

As for the oil-producing countries, many of them on the brink of recession because the basic turnover of less oil. Thus, work was halted much of the investment projects that existed. Also, these countries reserves of foreign currency began to fade fast by the example of Saudi Arabia, which has increased military Msrovha by virtue of the existing geopolitical conditions in the region.

Also it may be mentioned Mexico and Russia because they suffer a large deficit in Moisnathma, but countries that have a quasi-currency exchange rate fixed against the US dollar remains the largest affected, such as Saudi Arabia.

On the other hand, the disparity in monetary policies backed by massive reserves sometimes Like the monetary policy of the United States of America, allowed some of these economies steadfastness in difficult circumstances, but others had appeared in another field results with the deterioration of oil prices.

Thus, the coming months and years will appear bad surprises, especially in some oil-producing countries. The result of all the above, we believe that global growth will remain weak in the coming years. According to our analysis, the fact out of this will be only through one of these two methods: the military industry, or technological development.

In conclusion we can say that the structural change in the economic map and creep economic weight to the east, showed to the public the problem of economic models that have become unable to anticipate changes according to the data. This has negative repercussions on the economic policies of countries, especially in times of crisis, and limits the ability of States to remedy the crisis.