It is that time of the year again. Time to sum up our expectations for next year. Last year we thought we would see accelerating growth, and while have seen some, it has not been quite what we thought. We expected an easing of quantitative easing – pun intended – and the challenges that would bring; sure enough it brought some challenges, particularly to the emerging markets. We thought the European banks’ balances would gain attention again and it did, but only very briefly. We also thought unemployment would remain an issue; unfortunately, it has and will likely remain so for many years. Finally, we thought the rebalancing of the Chinese economy would be central; we have indeed seen the start but not the end of it.
Some of these topics are going to remain central in 2015, but there are also a few new ones on the horizon, which we think will get more attention in the year to come.
The US – walking without crutches, but not running yet
After years of central bank support, the US economy has got to the stage where it is time to go it alone. The quantitative easing program has ended, there is talk of interest rate increases again and US corporates are hiring and increasingly starting to invest again. The question remains if this will keep up given the increasingly modest global growth where export demand will be lower. However, it is looking more likely that the strong US development will continue in 2015, and we would all be the better for it.
The end of the commodities super-cycle?
Depending on who you listen to, the commodity super-cycle is either dead and buried or just taking a breather. Dead or alive, commodities are going to continue to make headlines in 2015, whether it is oil, iron ore, copper or coal. The interest in commodities is going to be driven both from a global supply and demand perspective, but also from an increasingly geopolitical one. News will continue about maintained OPEC oil production vs. US shale production and expanding large scale iron ore mines with record production overflowing the market. 2015 will be more difficult for commodity exporters, but for importers and consumers the drop in commodity prices will be a significant windfall and should give some contribution to global growth.
India - a flicker or a flame?
India has long been delivering below its potential for a number of reasons. This may be about to change if newly elected Prime Minister Narendra Modi gets his way. His success in transforming the Gujarat region to an economic success story has brought great hopes for what India can achieve under his management. However, 2015 will be a watershed year, where we will see either the much-wanted improvement or again see the unsurmountable challenges of governing India get the better of change initiatives. Either way, it will be a key part of the 2015 headlines.
Global trade has been going through a bumpy decade, from the wild ride prior to the financial crisis to the depths of the crisis years and the post-crisis joy of recovery. Lately, global trade growth has been cooling off to more modest levels. We expect 2015 to give trade a fair share of attention, particularly on the back of the developments on some significant trade agreements, particularly the discussions on the Trans Pacific and Trans Atlantic trade agreements, which would encompass some of the most important trades for RoRo cargo. In addition to trade boosting agreements, we will also continue to see new regions playing a larger role in RoRo trade, such as South America and Africa.
Another topic we expect to be seeing in 2015 is the increasing tensions on the geopolitical scene. From the Ukraine situation and an increasingly loud Russian foreign policy, the apparently unsolvable Middle East conflicts to the border tensions in the South China Sea – the common denominator is the increased uncertainty and risk of escalation, intended or by accident.