Few saw Britain voting to leave the European Union in 2016, though the decision will likely have important implications for global trade in the coming years. And it almost goes without saying that most polls failed to anticipate Donald Trump’s election victory in the U.S. Halal economy however has been showing some great growth.
Here is a discussion on top 3 trends in 2017 that will have global implications, do leave your thoughts in comments below:
Global Impact of President Trump:
With Donald Trump in the White House, America’s relationship with the world is on the edge of changing in some important ways. The key policies like international relations, trade relations and last but not the least, the policies regarding the issue of energy and environment are most vulnerable to the effect. The possible impacts expected out of Trump’s presidency could be:
- There could be a significant change on the dynamics of the bilateral relationship between US and Russia, which had become strained during Obama’s presidency over the case of Ukraine, Syria and cyber-hacking.
- The North Atlantic Treaty Organisation (NATO) would face some shakes-up after the President attacked the organisation and characterised its members as ungrateful allies who benefit from US largesse.
- Renegotiating or withdrawing from NAFTA would disrupt intertwined supply chains, adversely impacting the business of America.
- Based on what President Trump can do unilaterally, there is likely to be a significant pullback in current environmental policies, growth in the US energy sector, and strengthened trade partnerships between Asian countries.
Halal Economy Reaching New Heights:
Halal economy is one of the fastest growing industries that is trending in the global market. The halal economy has already surpassed $1.9 trillion in global market size and is expected double in the next 3 years. With rising interest, the halal economy industries are expected to expand in the four major groups: food, travel, lifestyle and finance.
The most lucrative halal markets are those in North Africa and the Middle East. Several countries such as Saudi Arabia, Qatar, Oman or the UAE have also high incomes and consumption per capita, which further booms the halal market turnover. And while the future seems bright for the ‘Halal Brand’, the possible ambiguity is in the fact that some 80 percent of the Halal trade is done by non-Muslim countries, both in the West and East, who have become perhaps the biggest benefactors of this new phenomenon.
Brexit’s Long-Term Impact on Global Growth:
The United Kingdom’s exit from the European Union would mark a reversal in the global trend toward greater economic integration.
There have been many attempts to model the macroeconomic consequences of Brexit, nearly all of which find that there will be a long-term loss of GDP for the UK economy compared with the status projections of remaining fully in the EU and its single market.
Brexit will likely lead to an increase in inflationary pressure on the UK economy, resulting in weakening of consumer spending and high cost charges on imported goods.
The inflation level is expected to hit 4% by the middle of 2017.
While the UK being completely broken off by the EU and adopting WTO member rules of trade with EU, the UK economy may fall by as much as 10%. The automobile industry would likely be most affected: 20% increase in tariffs for British car exporters.
In addition to the above crisis, market uncertainty, increased inflationary pressure, and devaluation of the pound could push the UK economy to mild recession in 2017.
Sudeshna Nepal is a researcher with Frost & Sullivan. She can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830