4 factors that determine the trends of the global economy
The Arab Monetary Fund (AMF) has published a report in which it identifies four factors that will determine the trends of the global economy during the upcoming period. The report indicates that these factors are represented in developments in Eastern Europe and in relations between the United States and China, in addition to climate change and the rise of protectionism.
According to the paper titled "Prospects for the Arab Economy," which highlighted that these causes are evident, the world economy may be affected by other variables that are harder to anticipate.
He explained that the first factor is the developments in eastern Europe, specifically the Russian-Ukrainian crisis, and pointed out that expectations indicate that these developments may continue for years, which puts commodity markets such as energy and some agricultural products in front of many challenges. He was referring to the fact that the crisis between Russia and Ukraine is the primary focus of his explanation.
The nature of the relationship between the United States and China will play a significant role in determining the direction that the global economy will take over the next few years. This is true even though the second factor centers on US-Chinese relations and the fact that the United States and China together account for about 42 percent of the total size of the global economy. In addition, the degree to which these two nations disagree with one another or work together will have a significant impact.
And according to the Arab Monetary Fund, the third element is climate change. This is due to the fact that the subject of climate change is receiving an increasing amount of attention from policy makers, as well as the fact that climate change has prolonged impacts that are anticipated to determine global economic trends for years to come.
The report also took into consideration the escalation of protectionism as the fourth component. This is due to the fact that it is anticipated that the escalation of protectionism would have profound consequences on the character of the global economy, as well as affects on global supply chains and the path that economic globalization will take.