In Depth News Commentary
US-Iran conflict – Fears of conflict finally receded, following a week of escalating tensions between the US and Iran. Tensions were high at the beginning of the week, as the US took full responsibility for the airstrike that killed Iranian General Qassem Suleimani on Sunday. The news sparked outrage, and fears of a war between the two countries mounted as Iranian officials vowed to retaliate. A retaliation came in the form of a counter airstrike, launched by Iran, on US military bases located within Iran. President Donald Trump was quick to respond to the attacks, reassuring the media that there were no casualties, and the attacks had resulted in only “minimal damage”. He then stated, “Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world,”. Following the retaliation, both countries have since moved to de-escalate the situation, as President Trump signalled that the US would not respond with military action.
US- Sino “phase one” deal – Following months of uncertainty surrounding the outcome of the US-China trade agreement, next week should see the signing of a “phase one” deal, as Vice Premier Lie He is set to travel to Washington to lock in Beijing’s commitment to the deal already announced in December by President Trump.
World Bank Forecast – The World Bank came out with revised estimates for 2020 global economic growth earlier this week. Following its weakest performance since the global financial crisis, the world economy is set for a modest rebound this year. Global growth is set to rise by 2.5% in 2020, up from 2.4% last year. This expansion reflects an expected recovery in both emerging and developed economies, as they are expected to accelerate to 4.1%, from 3.5% respectively as they shake off a turbulent 2019 amid economic uncertainty and geo-political tensions. For many other economies, growth is on track to decelerate, as investment and export figures remain weak, especially in the manufacturing industry. Continued trade tensions pose a concern to global growth in 2020, as reports suggest tensions could “re-escalate” between US and Chinese officials regarding the development of a “phase one” deal, as banks seem to be acutely aware that progress regarding the agreement so far could be easily revised.
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