The unknown of the US presidential election
To date, despite facing many legal troubles that could hinder his re-election, former US President Donald Trump is still the most prominent candidate representing the Republican Party in the race for the White House in 2024. Meanwhile, current US President Joe Biden has also announced his re-election campaign.
Fireworks to welcome the new year 2024 in Sydney (Australia)
Therefore, if there are no unexpected developments, the Biden - Trump "final rematch" scenario is considered the most likely scenario at this time. With this scenario, the victory of both sides is considered equal because no candidate has really shown superiority.
Meanwhile, because the US presidential election is expected to be tense, current White House owner Joe Biden certainly will not "step down" in the face of disagreements between the US and China. When answering Thanh Nien , many international research experts emphasized that competition and concerns about a rising China are common points and priorities of both parties. Therefore, both Republicans and Democrats do not want to "lose points" in public opinion on the China issue. Therefore, not only will US-China tensions be unlikely to cool down significantly in 2024, but they may even flare up at a higher level.
Russia - Ukraine between conflict hotspots
Also influenced by US politics, Dr. Bremmer assessed that if Mr. Donald Trump wins the election, US aid to Ukraine may decrease. Recently, Republican politicians no longer want to spend too much on Kyiv in the conflict with Moscow. Not only Washington, Europe may also be more restrictive in supporting Kyiv in the coming time. Similarly, analyst Tony Barber of the Financial Times also worries that Ukraine's situation will be more difficult if Mr. Donald Trump wins the election in November 2024.
The lack of aid in the context of difficulties on the battlefield will make the situation in Ukraine even more dire. Further analysis, Dr. Bremmer also assessed: Ukraine is at risk of losing, but Russia is not "winning". More specifically, he explained: "No matter what long-term benefits Russia achieves on the ground in Ukraine, NATO is clearly still expanding. Then the EU is promoting the process to admit Ukraine, Georgia and Moldova, which were members that the EU had not considered before Russia launched its military campaign against Ukraine". Dr. Bremmer further cited: "Russia has faced 11 rounds of sanctions from Europe and will probably have more in the future. Many Russian assets are frozen". Not only that, Russia's diplomatic image will be damaged in the long term while the country's economy is increasingly dependent on China.
Regarding the instability in the world, the conflict between Israel and Hamas is expected to continue. However, even if Hezbollah in Lebanon or Houthi forces in Yemen increase their "fire-sharing" with Hamas, the war situation in the region is predicted not to spread further. The reason is that neither the US nor Iran wants the instability to fall out of control.
How will China's economy be?
As one of the important drivers of the global economy, China's economy is also an important issue in 2024.
Dr. Bremmer analyzed: "China's growth engine is no longer working as before. 40 years of economic development have passed." According to him, China's economy is showing many negative signs when the youth unemployment rate is at a record high, manufacturing activities are shrinking, the real estate sector is facing difficulties, exports are decreasing due to inflation and high interest rates in the US and Europe, and foreign investment is stagnant.
Still, Mr. Bremmer said: “China remains a highly competitive economy, with advantages in manufacturing, renewable energy and electric vehicles, as well as leading innovation in frontier industries such as advanced computing, AI and biotechnology. It has a skilled workforce, increasingly world-class infrastructure and an innovation ecosystem that are key sources of strength.”
Commenting on the Financial Times, analyst James Kynge predicted: "The quality of China's growth has deteriorated markedly in recent years. The real estate market, which contributes nearly a third of GDP, is frozen. Many local governments are drowning in debt. Chinese consumers are hesitant. However, China's GDP growth in 2024 could still exceed 4%. That is thanks to debt relief packages, fiscal stimulus initiatives and other forms of official support from the Chinese government. And China's technological progress will continue to grow."
The US economy is not easy to "soft land"?
"This year, US inflation has fallen to levels that have surprised even the Federal Reserve, and growth has been stronger than most economists had expected," said Gillian Tett, an economist and editor of the Financial Times.
Explaining the reason, she said that because "consumer spending remains high and wage growth is well contained, positive US economic growth could continue into the first few months of 2024".
However, she warned: "But don't expect that to last through 2024 for a soft landing for the US economy. Because Covid-era support for households has been used up, spending resources will decrease. In addition, the consequences of high interest rates for a long time are starting to show such as bankruptcy, increasing debt concerns in the US. Not only that, geopolitical tensions are cracking global trade. The above issues can increase inflation and slow growth."
Oil prices will not be hot in 2024?
That is the opinion of most experts and research organizations when forecasting oil price developments in 2024. Specifically, according to the US Energy Information Administration (IEA), oil demand is forecast to increase next year. However, oil production in the US is increasing and recently reached a record level of 13.24 million barrels/day. Moreover, Brazil, Guyana, Norway and Canada can also increase supply.
Therefore, even if the Organization of the Petroleum Exporting Countries (OPEC) and some partners (collectively known as OPEC+) continue to maintain production cuts, oil prices are still expected to not increase much. Financial companies and research organizations are also quite optimistic about oil prices in 2024 if there are no major uncertainties. For example, Goldman Sachs has reduced its forecast when it forecasts an average Brent price of $80/barrel, the IEA forecasts Brent oil prices at $82.57/barrel, Barclays Group forecasts Brent oil prices at around $93/barrel, and S&P Group forecasts $85/barrel.
Brent oil price on December 31, 2023 is around 77 USD/barrel.
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