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Wednesday, 15 January 20
PREDICTIONS FOR 2020: 'SLOWBALISATION" IS THE NEW GLOBALISATION - PWC
 Projecting what the future holds is an important exercise for businesses looking to plan ahead. Below we present a summary of some of the themes we assess will likely prevail in the global economy in 2020.
Trading goods across borders will likely remain tense…: A defining feature of the global economy since at least the 1970’s has been globalisation—the bringing together of economies predominantly via more liberal trade flows. The global volume of merchandise traded slowed down dramatically and even went in reverse in 2019 in contrast to a 21st century average growth rate of about 3.4% per annum*. Also, in December 2019 the World Trade Organization’s (“WTO”) dispute settlement mechanism was effectively disbanded. We expect this trend to continue in 2020 and for trade tensions in the global goods market to persist. This means that we assess globalisation is likely give way to ‘slowbalisation’ i.e. continued integration of the global economy via trade, financial and other flows but albeit at a significantly slower pace. Large businesses with sophisticated supply chains spread across the world should therefore plan for a variety of scenarios, some of which have not been experienced in recent history.
…but global services trade expected to hit US$7 trillion: One aspect of trade that is often neglected is trade in services, which is now about one third of the size of the global volume of merchandise trade. In contrast to goods, services remain largely unaffected from tariff wars. The latest 2018 data from the International Trade Centre (“ITC”) shows that the global export of services was worth about US$5.8 trillion, or around 3.5% of global GDP. We expect the total value of services exported to hit a record US$7 trillion by 2020. Assuming historic trends continue, the US and UK are likely to remain the first and second largest exporters of services in the world in US Dollar terms. But in yet another reminder of the shift of the centre of economic power from the West to the East we expect China to overtake France in 2020 and become the world’s fourth largest services exporter.
Global economy is expected to grow at a modest pace: Figure 1 shows that growth in merchandise trade flows and the global economy have been intrinsically linked. In our main scenario for 2020, we expect the global economy to expand at a rate of around 3.2% in purchasing power parity (“PPP”) terms which is below the 21st century average of 3.8% per annum. In our main scenario, we expect all of the major economies to grow, buoyed, in part, by accommodative financial conditions. US economic activity is likely to expand by around 2%, in line with its potential rate. Given the historically low unemployment rate, US employers, however, find it increasingly difficult to hire staff. Across the pond, the Eurozone is expected to grow at approximately half that rate (i.e. around 1%). Germany, and other economies that are sensitive to global trade flows, to become more reliant on household consumption as a source of growth instead of net exports and investment. For Germany, however, this could be challenging as households tend to save more than the European average. In the emerging world, we expect the Chinese economy to expand by less than 6%– but it can still add the equivalent of Saudi Arabia to the world economy in one year. The world’s six other largest emerging economies, including Turkey, should also grow in this scenario, with India leading the way.
Predictions for 2020
More jobs across the board but not necessarily spread equitably
We expect the G7 to continue to create jobs, to the tune of around 2 million. Four out of the five new jobs in the G7 will be created in the US, UK and Japan. As the pool of labour resources in the G7 gradually dries up, we assess earnings should continue their upward trajectory. But in the absence of productivity improvements, corporate profit margins could be squeezed. Similarly, the International Labour Organization (“ILO”) expects the seven largest emerging economies– the E7–to create about 8 million jobs in net terms. There are some exceptions to this– Russia and China are likely to experience a shrinking workforce because of demographic pressures. Finally, the ILO’s employment projections for the G7 show that jobs are likely to be taken up by men and women in equal measure. Within the E7, however, the ILO expects job creations to be less evenly distributed across genders.
India expected to rise in global economic rankings
According to the IMF’s latest estimates, 2019 was the year when India overtook the UK and France to become the fifth largest economy in the world. This is an ongoing process with India likely on current trends to overtake Germany before 2025 and Japan before 2030 to become the world’s largest economy behind China and the US. France and the UK will likely now vie for sixth place in the rankings, with their relative position dependent on the value of the pound against the euro which may remain volatile in 2020.
Germany may need to choose between ‘lower for longer’ interest rates or higher fiscal spending
The US is expected to run a US$1.2 trillion government deficit. The Eurozone, which is about the same size as the US economy will run a government deficit about 1/10 the size of the US. In fact, we expect almost half of the Eurozone member states to run a government budget surplus in 2020. Cyprus, Luxembourg and Germany are expected to run the largest surplus relative to their economic size while France and Italy are expected to be on the opposite end of the spectrum with continuing budget deficits. Germany is likely to come under renewed pressure to either increase its government spending or accept ‘lower for longer’ interest rates (see Figure 3). Further afield, of the Gulf Cooperation Council (“GCC”) countries, we only expect Qatar to run a government surplus in 2020. This could mean more policy action in the future to balance government budgets across the GCC.
US oil production expected to hit record levels
Global renewable energy and nuclear consumption will likely make up more than 20% of global energy consumption, which is the highest it has ever been. The rise of renewable energy reflects how businesses, households and governments are adapting and changing their attitudes. China is expected to be the largest consumer of this type of energy closely followed by Europe. However, oil is expected to continue to remain the most preferred source of energy in 2020 for the world economy followed by coal and natural gas. The US and China will almost certainly remain the largest consumers of oil in the world in 2020. In so far as the extraction and supply of oil (and other liquid forms of energy) is concerned the US may surpass the monthly 13 million barrels per day (“b/d”) threshold. To set into context, in the US crude oil was extracted at a rate of 5.5 million b/d 10 years ago.
Global population biggest it has ever been but also the greyest
According to the United Nations (“UN”), In 2020, the world’s population is expected to reach 7.7 billion, which is around a 10% increase compared to a decade ago. China, India and SubSaharan Africa are expected to drive around half of the world’s annual population increase. At the same time, the number of people above the age of 60 globally is expected to surpass the one billion mark. China is expected to have a larger number of people above the age of 65 than all the six other largest emerging economies put together. This calls into question how policymakers respond to this trend and fund future health and social care. This could also be an opportunity for businesses in advanced economies, who have been dealing with such issues for decades. In relative terms i.e. the proportion of people above the age of 65 relative to the country’s entire population, Japan is expected to remain the ‘greyest’ country in the world and Niger is expected to be the youngest.
Source: PWC
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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- The University of Queensland
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Marubeni Corporation - India
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
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