World economy and some prospects for 2016

Economic growth and foreign economic activities

World economic growth in 2015 and 2016 will continue to recover, forecast to reach a higher growth rate than 2014 but not much. According to the July 2015 Update Report on global economic prospects of the International Monetary Fund (IMF), the global economy is forecast to grow at 3.3% in 2015 (adjusted down -0.2%) and is expected to increase to 3.8% in 2016. The downward adjustment of the IMF's forecast shows that the recovery prospects of the world economy are still difficult. The IMF's forecasts about major economies and regions in the world can be summarized in the following points:

– Among the group of industrialized countries, US economic growth is forecast to increase by 2.5% in 2015. This forecast result is adjusted down -0.6% compared to the most recent forecast. This is a fairly sharp downward adjustment due to declines in the production sector of this economy. However, the US economy is still the most important driving force driving economic growth in the group of industrialized countries in 2015 and 2016. The IMF believes that the growth prospect of the US economy in 2016 could reach 3.0% (only adjusted down -0.1% compared to the latest forecast). According to IMF analysis, the recovery of the housing market, rising wages, and still extremely favorable financial conditions for consumption and investment combined with low fuel prices continue to promote the US economic recovery.

– The eurozone (EU) is forecast to grow by 1.5% in 2015 and 1.7% in 2016. The IMF did not adjust its forecast for the European region downward because the recovery of major economies in the EU region basically continues. The IMF did not adjust or slightly increased the outlook forecast for Germany, France, Italy and Spain. Hey. Although the IMF still views the Greek crisis as a risk factor in its forecast scenarios, it still believes that the problems of bailing out Greece may only increase the burden on Europe without causing a widespread crisis or a complete collapse of this common currency area. Asian financial marketEurope has not reacted much to developments in Greece recently; the prices of some types of bonds have increased but modestly.

– Japan's economy has shown signs of recovery after the increase in consumption tax from 5% to 8% and the depreciation of the Yen in 2015. However, Japan's economic growth is still modest, forecast to only reach about 0.8% in 2015 (adjusted down -0.2% compared to the latest forecast) and expected to reach 1.2%. in 2016. In general, the IMF is not very optimistic about the prospects of the Japanese economy as well as Prime Minister Abe's economic stimulus program. The IMF's forecasts on the short- and medium-term prospects for the Japanese economy are still very conservative.

– The IMF's latest forecasts have not made many adjustments to the outlook for emerging and developing economies. In Asia, India, the third largest economy in Asia, will grow by 7.5% in 2015 and 2016 thanks to the impact of falling oil prices and many economic reforms being promoted. However, the increasingly slow growth of China's economy will have a negative impact on the economic outlook in Asia. The decline in China's economic growth will not only directly affect the economy of Vietnam and a number of countries that have large trade and investment relations with China, but the world economy may also be deeply affected because China's economy is currently the second largest economy in the world. In addition, growth decline of theCrude oil exporting countries such as the Russian Federation or OPEC countries also have a negative impact on the world economy.

Table 1: Forecast of world economic outlook for 2015 and 2016

Source: International Monetary Fund (IMF).

An important feature of the current economic growth recovery trend of regions and economies in the world is that it is uneven. For industrialized countries, the US recovery is stronger than that of EU countries and Japan, leading to an appreciation of the US dollar compared to other strong currencies. The exchange rate policies of many countries are being adjusted to maintain the competitiveness of exports, typicallyChina has continuously devalued the yuan recently. This policy can negatively affect foreign trade activities of many countries around the world because goods exported from China account for 15% of the total global export volume.

Economic growth is recovering slowly, so global trade activities are also facing difficulties. Import demand of developed economies in 2015 only increased slightly compared to 2014 and does not tend to improve in 2016. For emerging and developing economies, import demand will increase in 2016. In addition, the IMF believes that complicated developments and conflicts in many parts of the world such as The crisis in Ukraine and the violence in the Middle East have affected the economic stability of many regions and countries. These uncertainties always negatively affect import and export activities.

Investment trends in the world by region and economic sector

According to UNCTAD's 2015 World Investment Report, total global FDI capital in 2014 was 1.23 trillion USD, down 16% compared to 

Foreign Investment Department