Europe, Middle East and Africa
Despite the highly anticipated fallout from Brexit, the U.K. has instead posted substantial growth this year, though some analysts warn that it could plummet by next year. With a higher-than-expected boost in business confidence the German economy is in what it is calling a "festive mood." And while the UAE may be closing 2016 with a low economic growth rate, it is forecast to become the best-performing country regionally over the next two years.
Although in September, business leaders in the U.K. had forecast a growth rate of 1.8 per cent for the year, that figure has now been revised to 2.1 per cent, reported the BBC. Countering original concerns that the economy would drop sharply following Brexit, growth has remained steady.
According to the BBC, this boost has been helped by a "business as usual" approach taken by many companies in the wake of the vote. The British Chambers of Commerce, however, has cautioned that this growth will not last. It anticipates an advance of just 1.1 per cent in 2017, followed by an expansion of 1.4 per cent in 2018. Since the vote, the pound has fallen against the dollar and euro, 15 and 10 per cent, respectively. The BCC anticipates that this will impact business investment as well as bump up inflation.
The Independent has argued the contrary. According to the news source, some predict that consumer support will continue to push the British economy into better growth in 2017.
Meanwhile, Germany is celebrating a strong economic finish to 2016 on the heels of a Munich-based Ifo institute report that had its headline business confidence index reach 110 points for the final month of the year, according to The Local Germany. This marked a 0.6-point increase from November. Predictions from Factset, a provider of financial data, had the growth rate at just 0.2 points.
"The German economy has continued its recovery and defied many external risks and turmoil" in 2016, said ING DiBa bank economist Carsten Brzeski.
While its neighbors in the Middle East and North Africa are expected to post poor economic performances, economists predict the United Arab Emirates is on a path to strong economic growth for 2017 and 2018, reported the Khaleej Times. A recent report from Capital Economics has the rest of the region falling to 1.5 per cent growth, while the UAE "should embark on a gradual recovery in the coming quarters and is likely to be the best-performing economy in the Gulf in 2017-18."
Over the past decade, gross domestic product in the UAE has tripled from nearly Dh511 billion in 2006 to Dh1.58 trillion as of last year. That figure is set to hit Dh1.8 trillion by the end of the year, noted the source.
According to The National, a crucial part of economic growth in the UAE is the integration of cultural development. At a Dec. 11 conference Minister of Culture and Knowledge Development, Sheikh Nahyan bin Mubarak, told the crowd that successful and robust economic growth relies on culture.
"We strive to preserve our heritage, values and principles as well as all aspects of culture in the UAE and we seek to establish a dialogue with other civilisations in order for us to continue to move forward," Nahyan bin Mubarak said at the ninth annual Arab Report on Cultural Development by the Arab Thought Foundation.
Japan closes the year with a healthy unemployment rate and solid production figures, while Thailand sees significant tourism gains and favorable economic growth forecasts.
Manufacturing activity in Japan closed out the year on a strong note. The Nikkei Flash Japan Manufacturing Purchasing Managers’ Index, put together by IHS Markit, reached 51.9 in December, its highest level since January, Nikkei Asian Review reported. The index was up 0.6 points from November.
"Output and new orders both increased at sharper rates, with new work inflows rising at the quickest pace since January," said IHS Markit economist Amy Brownbill, according to the source.
Though production may be up, the government is beginning to urge business owners in the country to increase wages during the upcoming pay negotiation period in the spring of 2017, according to an editorial piece in The Japan Times. The unemployment rate in Japan has stayed at 3 per cent, while the number of permanent, full-time employees had its first year-over-year growth since 2007 last year.
The article noted that the Japanese Trade Union Confederation has campaigned for a 4 percent raise for workers, including a 2 per cent increase in their base pay scale.
Many of the economic leaders in the nation are also looking toward the impact of the next generation on job creation. Forbes Japan recently recognized some of the top entrepreneurs in the country at its “Japan’s Startup of the Year 2017” awards ceremony, Japan Today reported. Shintaro Yamado of e-commerce app Mercari Inc. received the top prize for the rapid global expansion of the company.
In Thailand, the federal government is also taking action to support the economy and aid job growth. The government recently announced that it would spend $5.3 billion during the current fiscal year to boost economic activity and job growth in rural areas, according to Southeast Asia Globe. Political instability and a loss of manufacturing jobs are two factors that have contributed to slowing growth in recent years, according to Joshua Hulantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations.
The country received positive news in December, with forecasts that its economy would grow 3.2 per cent in 2017, The Financial reported, citing figures from the World Bank. The national economy is estimated to have 3.1 per cent growth this year, an increase from 2.8 per cent in 2015.
Tourism was a major driver of growth this year, with the number of travelers to the country up 13.1 per cent in the third quarter of 2016.
The boost in tourists may have been helped by the decision of the government to waive visa fees for travelers from 19 countries between Dec. 1 and Feb. 28, according to Thailand Business News.
In their report, analysts from the World Bank urged Thailand to invest in its services sector to boost job creation and wage increases, The Financial reported, noting that the services industry employs 40 per cent of the national workforce and contributes to 50 per cent of gross domestic product in the country.
The U.S. economy is set to finish the year on a strong note, marked by the confidence of the Federal Reserve in its decision to raise the interest rate last week. In Latin America, though the overall economic outlook remains grim, a few bright spots remain.
In November, the unemployment rate in the U.S. dropped to its lowest level since 2007, falling 0.3 per cent to 4.6 per cent, according to The New York Times, citing figures from the Bureau of Labor Statistics. From August 2015 to October of this year, the unemployment level had seen little change. Last month, the number of unemployed persons fell by 387,000.
In addition to the falling unemployment level, the addition of 178,00 nonfarm payroll positions and decade-high confidence levels among consumers helped to boost the faith in the Federal Reserve in the strength of the economy, reported CNN Money. It was enough confidence for the Fed to up its interest rate. Doing so for only the second time in the past decade, the Fed hiked its key interest rate by 0.25 per cent on Dec. 14.
"Economic growth has picked up since the middle of the year," said Fed chair Janet Yellen. "We expect the economy will continue to perform well."
The original forecast of one to two Fed hikes in 2017 has now increased to three or more, noted CNN Money.
Though several countries across Latin America are forecast to post negative growth this year, figures from the World Economic Outlook report indicate that five countries could see economic growth of 4 per cent or higher while 12 countries are expected to expand by more than 2.5 per cent this year, reported the Fair Observer.
Moreover, initial outlooks for next year include the end of a recession in all countries except two: Venezuela and Ecuador.
One company helping boost a growing luxury sector in several Latin American countries is Lexus. The luxury vehicle manufacturer has seen sales grow 32 per cent in the first 11 months of 2016 alone, according to Automotive News. Dealerships in Costa Rica, Peru, Bolivia, Brazil and Chile have helped make Latin American the fastest-growing region for Lexus in the past two years.
Year-over-year growth for Lexus in the global luxury sector advanced 1 per cent to 2.9 per cent this year. Building on its success, the brand plans to open several new dealerships across the region in the next year, a move that will generate more jobs.