Videos | December 17, 2015

In two minutes – An ING economist on key 2015 events

Will change in China and issues with interest rates hold back global growth in 2016?

In a December update video for eZonomics, ING head of macroeconomics Maarten Leen explains several key developments the world has seen in 2015: falling interest rates, a China slowdown, and low oil prices.

Falling interest rates
Leen reports that 10 year yields in Germany have fallen as low as seven basis points at some points during the year.
“For maturities up to seven years, yields became negative,” he says. “Even the Italian and Spanish governments have been able to borrow at negative rates for two years.”
The European Central Bank has also engaged in a massive bond buying programme.

Interesting times in China
The Chinese economy grew more slowly during 2015 – expanding at rates of around six or seven percent instead of 10%.
“By the third quarter, China had overtaken Greece as the most important source of concern,” notes Leen. “As the Chinese stock market saw big declines and the yuan devalued, uncertainty among investors increased to highs, only seen twice since the global financial crisis.”
Sluggish global growth, coupled with strong supply, pushed oil prices down to under $40 per barrel by December.
But stay tuned: Leen predicts that interest rates and oil prices will rise “somewhat” in 2016 although Chinese manufacturing may continue to slow down.
And the US Federal Reserve announced a rate rise on 16 December 2015 – its first in nearly a decade. 


eZonomics team
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