Confrontation with Iraq’s militias may come to a head

2020 ◽  
Keyword(s):  
Prime Minister ◽  
Oil Prices ◽  
International Aid ◽  
Financial Assistance ◽  
Content Type ◽  
The Us ◽  
Double Hit ◽  
Will Force

Significance This followed five rocket attacks on the US-led coalition in the last two weeks, which killed two US and one UK citizen. It also came two days after Kurdish President Barham Salih named Adnan al-Zurfi, a US-linked Shia nationalist politician, as the new prime minister-designate. Impacts Washington may hold back its response to attacks in order to further Zurfi’s ratification. A massive double hit from low oil prices and COVID-19 will force Iraq to seek more international aid. A Zurfi government could improve Iraq’s chances of gaining Western and Gulf financial assistance.

Exploring the inflationary effect of oil price in the US

2019 ◽  
Vol 13 (1) ◽  
pp. 60-76 ◽  
Author(s):  
Amine Lahiani
Keyword(s):  
Growth Rate ◽  
Structural Breaks ◽  
Oil Prices ◽  
Oil Price ◽  
Inflation Expectations ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Content Type ◽  
The Us ◽  
The Relationship

PurposeThe purpose of this paper is to explore the effect of oil price shocks on the US Consumer Price Index over the monthly period from 1876:01 to 2014:04.Design/methodology/approachThe author uses the Bai and Perron (2003) structural break test to split the data sample into sub-periods delimited by the computed break dates. Afterwards, the author uses the quantile treatment effects over the full sample and then, by including sub-periods dummies to accommodate the selected structural breaks that drive the relationship between inflation and oil price growth.FindingsThe findings include a decreased transmission effect of oil price changes on inflation in recent years; a varied elasticity of inflation to the growth rate of oil prices across the distribution; and, finally, evidence of asymmetry in the relationship between the growth rate of oil prices and inflation, with a higher transmission mechanism for decreasing rather than increasing oil prices.Practical implicationsPolicymakers should remain alert to monitoring potential inflation increases and should take precautionary measures to anchor inflation expectations, because inflation reacts differently to positive and negative oil price shocks. Moreover, authorities should consider the asymmetric reaction of inflation to oil price shocks to adopt an appropriate monetary policy strategy to achieve the price stability target.Originality/valueThe paper used a quantile regression model with structural breaks, which has not yet been used in the literature.

Economic demise set to continue, but farming is a hope

2015 ◽  
Keyword(s):  
Prime Minister ◽  
International Aid ◽  
Local Economy ◽  
Economic Decline ◽  
Content Type ◽  
Trade Relations ◽  
Political Implications ◽  
External Demand ◽  
The Government ◽  
Political Turmoil

Significance The hryvnia crisis, which has seen the currency's value plummet, has deepened. However, as reported by Reuters, the NBU decision was suddenly reversed following heavy criticism from Prime Minister Arseniy Yatsenyuk, who said the move was bad for the economy. Overall, Ukraine's economy continues to be weak and vulnerable to shocks. The local economy had already been struggling for most of 2012-13, owing largely to weak external demand and deteriorating trade relations with Russia. However, the political turmoil that the country found itself in soon after the February 2014 change of power exacerbated these troubles significantly. Impacts Continued economic decline will prompt the government to take new unpopular belt-tightening measures in order to get international aid. Rapid economic reforms increase the risk of mass social discontent with far-reaching political implications. Should key merchandise exports fall further, producers could face an effective loss of their main markets.

Leading central banks mould investor sentiment

2015 ◽  
Keyword(s):  
Central Bank ◽  
Federal Reserve ◽  
Developing Economies ◽  
Investor Sentiment ◽  
Oil Prices ◽  
Central Banks ◽  
Euro Crisis ◽  
Content Type ◽  
The Us ◽  
Country Specific

Significance In the worst start to a year for US equities since 2008, the benchmark S&P 500 index fell 0.7% during the week ending January 10. December's employment report showed US non-farm payrolls rising by a robust 252,000, but average hourly earnings declined, accentuating deflationary fears. The dollar continued to strengthen against the euro on concerns about a possible euro crisis over Greece and the introduction of sovereign QE by the ECB. With the US Federal Reserve preparing to raise rates, investor sentiment remains fragile. Impacts The tug-of-war between central bank largesse and country-specific, geopolitical and economic risks will become more intense. Markets will focus on renewed fears of 'Grexit' and on concerns about German opposition to an ECB sovereign QE programme. The relentless oil prices slide, exacerbated by the dollar's strength, will put further strain on EM assets. The ruble is likely to weaken further, increasing the scope for contagion to other developing economies.

Low oil prices will force policy choices on Azerbaijan

2015 ◽  
Keyword(s):  
Oil And Gas ◽  
Banking System ◽  
Oil Prices ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Policy Choices ◽  
The Past ◽  
Fiscal Space ◽  
Will Force ◽  
The Impact

Subject The impact of prolonged low oil prices. Significance Hydrocarbons drove rapid economic expansion in the past. The associated increase in income fuelled the growth of domestically oriented sectors, such as trade and construction. Publicly financed infrastructure spending, using the fiscal space created by oil and gas revenues, also contributed. Impacts Sluggish oil production will compound the impact of persistent low oil prices. Fiscal consolidation will also require a stronger focus on the prioritisation of spending. Devaluation has not fully restored competitiveness but is a source of stress for the banking system.

Trump win will force Abe to recalibrate key policies

2016 ◽  
Keyword(s):  
Nuclear Weapons ◽  
Exchange Rate Policy ◽  
Arms Race ◽  
Hillary Clinton ◽  
Content Type ◽  
The Us ◽  
Rate Policy ◽  
Economic Partnership ◽  
Will Force ◽  
Regional Comprehensive Economic Partnership

Significance Tokyo had prepared for a Hillary Clinton victory, and is alarmed by comments during Trump's election campaign that raise doubts over the US-Japan defence alliance and raise fears that economic cooperation will give way to conflict. Impacts As Abe diverts resources into stabilising US ties, other policy areas may receive less attention. Exchange rate policy could re-emerge as a point of tension in Japan-US relations. With the Trans-Pacific Partnership likely to collapse, Japan may inject fresh energy into the Regional Comprehensive Economic Partnership. US 'abandonment' would force Japan to strengthen its independent defence capabilities, sparking a destabilising arms race with China. The idea of Japan acquiring nuclear weapons is a non-starter.

OPEC deal would encourage US shale producer rally

2016 ◽  
Keyword(s):  
Gulf Of Mexico ◽  
Oil Prices ◽  
Oil Price ◽  
Eagle Ford Shale ◽  
Eagle Ford ◽  
Content Type ◽  
Service Companies ◽  
West Texas ◽  
The Us ◽  
Shale Recovery

Significance The US shale industry has emerged from the worst of the crude price downturn battered, but also leaner and more efficient. Many shale producers are eager to return to growth, buoyed by a more stable oil price at around 50 dollars per barrel. However, oil prices need to rise somewhat higher still to give enough of a jolt to the industry to see US oil production return to meaningful growth. Impacts Oilfield service companies, especially fracking specialists, stand to gain if shale drilling activity picks up on the back of higher prices. The Permian shale in West Texas will lead any US shale recovery, due to its lower costs and large reserves, boosting the region’s economy. The Bakken and Eagle Ford shale plays will follow the Permian shale in a price recovery. Prices above 70 dollars per barrel would probably be required for investment to return to Gulf of Mexico deepwater projects.

Iraq's Abadi likely to survive reform challenge

2015 ◽  
Keyword(s):  
Public Sector ◽  
Public Spending ◽  
Strong Support ◽  
Financial Assistance ◽  
Content Type ◽  
The Public ◽  
Us Military ◽  
The Us ◽  
Step Down

Significance Criticism of his reforms, which involve sweeping cuts to government positions and an anti-corruption drive, has mounted in recent weeks despite initially receiving strong support from Shia politicians. However, parliamentarians are now openly debating whether parliament should withdraw its support for the reforms, with some even suggesting that Abadi should step down. Impacts Abadi's reform drive may stall if he is forced to reverse his cuts to government positions and create new ones to rebuild his support base. Failure to rein in public spending will affect Iraq's attempts to seek international financial assistance. Abadi's weakening would strengthen the Shia militias, and thereby reduce prospects for reconciliation with the Sunni community. It would also increase attempts by hardliners to sideline the US military in the fight against ISG. Abadi may well climb down on the public sector salary issue and attempt to depoliticise it.

US consumption may start to pick up

2015 ◽  
Keyword(s):  
Trade Balance ◽  
Oil Prices ◽  
Energy Prices ◽  
Trust Fund ◽  
Content Type ◽  
Consumption Expenditures ◽  
Us Economy ◽  
West Texas ◽  
Personal Consumption ◽  
The Us

Significance One of the conundrums of the US economy that will influence the Federal Reserve's timing of an interest rate rise (currently projected for September) is where the savings from low energy prices have gone. Oil prices have dropped sharply since September 2014, from 97 dollars per barrel for West Texas Intermediate in June 2014 to 60 dollars per barrel today. Yet US personal consumption expenditures (PCE) only grew by 2.7%, well below the rate of growth of personal income, 4.1%. Impacts Greater spending on petrol will help the Highway Trust Fund slightly, but not before a new funding package is due by July 31. Low oil prices will outweigh consumer savings in such producing states as Texas and North Dakota. Greater consumer spending will adversely affect the US trade balance, as imports will rise due to the strong dollar.

The laptop ban will force adjustments by Gulf carriers

2017 ◽  
Keyword(s):  
Low Cost ◽  
Middle Eastern ◽  
Electronic Devices ◽  
Security Systems ◽  
Content Type ◽  
The Us ◽  
Low Cost Carriers ◽  
Will Force ◽  
The Uk

Significance Washington and London from March 25 enforced a new requirement that laptops and other electronic devices must be checked into the hold by airlines serving certain Middle Eastern airports. The US restrictions apply, among others, to the 'Gulf Three' carriers -- Emirates, Etihad and Qatar Airways -- although the UK rule does not. Impacts As Gulf airlines retrench, Airbus could be hit, with slower sales of its A380 'Superjumbo'. Airports may reorganise their security systems to segregate air-side passengers affected by the restrictions from those who are not. UK low-cost carriers (LCCs) and charter airlines will face some difficult choices on charging and turnaround times.

Gulf pressure will force southern Yemenis to deal

2018 ◽  
Keyword(s):  
United Arab Emirates ◽  
Prime Minister ◽  
Living Conditions ◽  
Content Type ◽  
Wide Range ◽  
Will Force ◽  
The City

Significance The fighting started on January 28, when the secessionist Southern Transitional Council (STC) acted on its threat to topple the Saudi-backed government, taking control of most of the city and besieging the prime minister. The STC draws support from militias including salafi fighters recruited, trained and equipped by the United Arab Emirates (UAE). Impacts The STC will struggle to build its support outside Aden in areas such as Abyan. STC efforts to put forward a political programme could create disunity, given the wide range of ideologies among its supporters. The Saudi-led coalition will invest more resources in improving living conditions in southern Yemen. Crisis contained, the coalition will refocus military efforts to capture the long-disputed central town of Taiz.

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