Drop In Oil Prices Research Articles

Innovative management of food enterprises in terms of import substitution and import dependence

The article discusses the new policy of import substitution in Russia. The replacement of imports by domestic counterparts is a priority of Federal and regional authorities. Innovative management should primarily take into account the new economic conditions which exist and will soon operate a food company. Describes the factors that have a negative impact on the efficiency of innovative management of dairy plants: the drop in oil prices, decline in exports, domestic oil prices, the devaluation of the ruble. The analysis of the indicators of import dependence and import substitution in the dairy group food. The analysis of indicators of the food industry showed that the indicator of self-sufficiency in the last 10 years have been below the 0.90 standard. In 2007, the industry reached self-sufficiency ratios 0.8146 that is still below the required standard more than 10%. These calculations allowed us to attribute the production of dairy products to import-dependent food industry. Therefore, in this industry were conducted further research based on the indicators “import” and “self-sufficiency”. Used methods of statistical control showed that the inverse correlation between these indicators does not exist. So, the volume of the imported imports depends on other factors and only increasing their own production, this figure does not decrease. Therefore, in the production of milk and dairy products need more reforms to improve the indicators of self-sufficiency. Providing the population of our country milk and dairy products in need of rapid change to increase its own production of dairy products. Thus, features of innovative management of dairy enterprises are determined by the modern conditions of import substitution.

Experimental and Numerical Studies of CO2 EOR in Unconventional Reservoirs

This article, written by Special Publications Editor Adam Wilson, contains highlights of paper SPE 179634, “Experimental and Numerical Studies of CO2 EOR in Unconventional Liquid Reservoirs With Complex Fracture Networks,” by Jianlei Sun, SPE, Amy Zou, and David Schechter, SPE, Texas A&M University, prepared for the 2016 SPE Improved Oil Recovery Conference, Tulsa, 11–13 April. The paper has not been peer reviewed. This study investigates oil-production mechanisms from the matrix into the fracture by simulating two laboratory experiments as well as several field-scale studies and evaluates the potential of using carbon dioxide (CO2) huff ’n’ puff to enhance oil recovery in unconventional liquid reservoirs (ULRs) with nanodarcy-range matrix permeability and complex natural-fracture networks. This study explores the mechanisms contributing to oil recovery with numerical modeling of experimental work and investigates the effects of various parameters on oil recovery. Introduction CO2 injection has been recognized as one of the more important and successfully applied enhanced-oil-recovery (EOR) processes in the US since the start of the first commercial CO2-injection project in 1972. Statistics show that, out of the 153 active CO2 EOR projects worldwide, 139 of them are in the US. CO2 flooding is the only EOR method in the US that has been consistent and economical since the drop in oil prices in the 1980s. One of the main advantages of CO2 injection is that CO2 can achieve miscibility with the resident hydrocarbon when minimum miscibility pressure (MMP) is attained. Although CO2 flooding has demonstrated the potential of increasing oil production in conventional reservoirs, if this EOR process were to be applied to ULRs, the oil-recovery mechanism could not be considered the same as that during a conventional CO2 flooding because of the differences in reservoir petrophysical properties, fluid-phase behavior, and the fundamental mass-transfer mechanisms. In general, diffusion during gas injection has been recognized as a critical mechanism that affects the oil recovery in fractured reservoirs. If the diffusive flow in the matrix is being neglected during simulation, the calculated result will underestimate productivity. Furthermore, complex fracture geometry has been proposed for hydraulic fracturing because of the intersection between hydraulic fractures and in-situ natural fractures. Numerous simulation and experimental studies have evaluated production performance of complex fracture networks. However, there is no extensive work regarding the potential of CO2 huff ’n’ puff in complex fracture geometries.

Arab government budgets: selected indicators

This statistical file is concerned with Arab government budgets as it assumes that the sharp drop in oil prices coupled with ongoing regional conflicts have caused significant deficits in the budgets of most Arab countries, especially Arab oil-exporting countries, where governments had to implement a wide range of fiscal reforms aiming at rationalizing public spending and enhancing public revenues. On the other hand, lower oil prices have eased pressures on public finance in Arab oil-importing countries, especially in light of the rising cost of energy subsidies. Yet, many of these countries had also to proceed with structural reforms to reduce fuel subsidies and control the budget. Tables 1 and 2 provide statements on government revenues and grants, including estimates of government revenues as a percentage of gross domestic product (GDP), while Tables 3–5 show hydrocarbon and tax revenues, including estimates of these revenues as a percentage of total public revenues. Tables 6 and 7 provide statements on government expenditures, including estimates of government expenditures as a percentage of GDP, while Tables 8 and 9 deal with the structure of expenditures, showing estimates of current and capital expenditures along with figures on the functional classification of current expenditures. Overall surplus/deficit figures for Arab government budgets along with projections of the general government fiscal balance are shown in Table 10.

ECB-Global: Introducing ECB's Global Macroeconomic Model for Spillover Analysis

In a highly interlinked global economy a key question for policy makers is how foreign shocks and policies transmit to the domestic economy. We develop a semi-structural multi-country model with rich real and financial channels of international shock propagation for the euro area, the US, Japan, the UK, China, oil-exporting economies and the rest of the world: ECB-Global. We illustrate the usefulness of ECB-Global for policy analysis by presenting its predictions regarding the global spillovers from a US monetary policy tightening, a drop in oil prices and a growth slowdown in China. The impulse responses implied by ECB-Global are well in line with those generated by other global models, with international spillovers in ECB-Global generally on the high side given its rich real and financial spillover structure.

Nonlinear effects of oil prices on inflation, growth, budget deficit, and unemployment

In oil-exporting countries such as members of the OPEC, fluctua-tions in oil prices exert a significant impact on the domestic econo-my. Currently, a sharp reduction in oil prices results in several ad-verse effects; however, for such a crude-oil exporter that is also an importer of petroleum products as Vietnam, does a rise or drop in oil prices is beneficial to its development? This paper attempts to de-termine the oil price threshold while analyzing oil price effects on several macro factors, such as inflation, GDP growth, budget deficit, and unemployment rate over the 2000–2015 period. Using TVAR model, we detect an oil price threshold of USD27.6/barrel. Moreover, an increase in the price of oil, which exceeds this threshold, will cause a rise in inflation, budget deficit, and unemployment rate. Still, there is no significant evidence of the impact of oil prices on GDP growth.

Ready to collaborate? Operator and supply chain under the spotlight

In the last 12 months or so, particularly with the drop in oil price, there’s been a lot of speculation about the future of the Australian oil and gas industry. Strenuous efforts are being made to bring down costs, reduce complexity and expedite the completion of major capital projects. Yet with the commodity price looking likely to be subdued for some time, serious questions persist. How can we sustain activity in Australia, secure the investment needed to continue exploration and appraisal drilling, for the next wave of projects? In looking for answers to these challenges, collaboration is a theme that comes up time and time again. But what does it actually mean? What does it look like in practice? Who does it well and how? And which companies are reaping the rewards of great collaboration? To fill this knowledge gap we are launching a survey which will look at many aspects of collaboration in the Australia and compare this with the results of similar surveys conducted in the UK. We will be looking to survey both operators and service companies working in the Australia and find out: What does collaboration mean? What constitutes effective collaboration? How do companies view themselves and each other as collaborators? How does collaboration in Australia compare with companies in the North Sea? We hope a better understanding of collaboration could help companies in Australia continue to improve productivity and efficiency, adopt new ways of working, and truly make the most of Australia’s abundant resources.

Fiscal consolidation and growth in Serbia, 2015-2017: Program, accomplishments and drivers

Despite the encouraging progress in economic and fiscal trends in 2015 and 2016, Serbia is still far from high economic growth and healthy public finances. In this paper, we provide an in-depth analysis of the drivers of the economic recovery and the fiscal deficit decrease in the previous two years. In both cases, the analyses have shown that the observed improvements rest, to a large extent, on short-term and unplanned factors that are easily exhausted. Economic activity was under a significant impact of external growth drivers - a strong drop in oil and food prices, decreased interest rates and faster recovery of the region and the Eurozone. This is why practically all countries in the region, and not just Serbia, exceeded GDP forecasts by about 1 p.p. in 2015 and 2016. The fiscal deficit was decreased primarily through a surprisingly high public revenue collection, while for the most part, the planned savings were not achieved. Fiscal risks, particularly those pertaining to poor business performances of public and state-owned enterprises, practically remain the same in 2017 as they were in 2014. All this indicates that the improved economic and fiscal trends leave no room for complacency, but should be observed as a rare opportunity to implement structural reforms in a somewhat more favourable environment without a direct pressure of an impending crisis. If this opportunity is missed now, the reforms will have to be implemented in a far less favourable environment and will thus be far more difficult.

Focus: “Now it is a question of dignity”: A dark year for Algerian unions

8 | International Union Rights | 24/3 FOCUS | FREEDOM OF EXPRESSION “Now it is a question of dignity”: A dark year for Algerian unions It was just before midnight when union leader, Raouf Mellal, heard banging on the door of his hotel room in the Algerian city of Tizi-Ouzo. It was the police. They demanded that he get dressed and come down to the local police station immediately. They had no arrest warrant and no legal right to seize him but it would have been pointless to resist. Mellal is President of the independent national union of electricity and gas workers, (Syndicat National des Travailleurs de l’Électricité et du Gaz, SNATEGS). He was not the only one to be seized on the night of 20 March 2017. Nine other colleagues, including five members of the union’s leadership committee staying at the hotel, were also taken into custody. Down at the police station they were grilled about their union activities. Mellal was repeatedly told he was not a legitimate union leader, even though he had been elected in July 2016. They weren’t released until 2pm later that afternoon. Mellal and the SNATEGS leadership had travelled to Tizi-Ouzo on the eve of a planned march in the city, part of the actions for a three day national strike against the state owned energy provider Sonelgaz. Workers were fed up with low pay, bad management and lethal working conditions at the company. Over the course of the next three days from 21 to 23 March 2017, the police went to extraordinary measures to stop a series of sit-ins and rallies across the country. While the march at Tizi-Ouzu was prevented by blockades and the arrest of the union leaders, police attacked peaceful protestors including women at a sitin at Sonelgaz’s distribution centre in Bejaia the next day. On the third day of the strike, police arrested some 400 trade unionists who attempted to protest outside the Sonelgaz headquarters in Algiers. Despite the violence and intimidation, SNATEGS recorded a spike in union subscriptions and thousands of workers took part in the strike. Propping up the Algerian economy Sonelgaz is the second largest enterprise in Algeria, employing more than 87,000 workers. It provides gas and electricity to the nation and for export across Africa and Europe. Its contribution to the Algerian economy, which is heavily dependent on oil and gas, is immense. However, as the government grapples with an economic slump due to the global drop in oil and gas prices, attacks on democratic unions in Algeria have increased. SNATEGS, as the only independent union representing workers at Sonelgaz, has faced some of the worst oppression by authorities. “Sonelgaz is the sole provider of gas and electricity in Algeria. It is a vital sector but workers’ basic salary is only 200 euros a month. In contrast, the basic salary in Morocco is 600 euros, even though Algeria exports electricity to Morocco and is the main provider of energy in North Africa”, says Mellal. SNATEGS, which was registered in 2013, has succeeded in rapidly boosting membership to more than 35,000 workers, the large majority of whom are under 35 years old. Its president, at age 37, is one of the youngest union leaders in the Arab world. But his success as a union leader has had a heavy toll. “As president of our union I am suffering. I am totally repressed. My career is destroyed. I lost my job three years ago”, Mellal recalls. He began working in the legal department at Sonelgaz in 2013. Just a year later he was fired for his union activities but worse was to come. Sentenced for whistleblowing In December 2016, Mellal was sentenced in absentia to six months in prison and a fine of 50,000 Algerian Dinars (US$455), after being accused of illegally obtaining documents. These documents, which were freely available online, exposed the inflation of electricity bills by Sonelgaz over a tenyear period affecting eight million households. Mellal has already lost an appeal against his sentence, and will be allowed one final chance to clear his name before his freedom is denied. Mellal also faces a further...

MODERN AGRICULTURAL POLICY OF IMPORT SUBSTITUTION AND MANAGEMENT IN AGRICULTURAL COMPLEX OF RUSSIA

The article discusses the causes and conditions under which Russia entered a new phase of implementation of the state policy of import substitution in agriculture. In terms of Western sanctions caused by the events in Ukraine, sharp drop in oil prices and other commodity prices, Russia has found itself in a difficult economic situation. Leaders of the Russian Federation have repeatedly raised the issue of import imported food products on the domestic production, but their decision was not always positive and systematic, and only the events of recent years give us hope for positive results. The authors argue that, despite the multifactorial problem, the economic policy of import substitution in the agricultural sector has real prospects for successful implementation of programs to ensure food security of country.

Oil Prices: Governance Failures and Geopolitical Consequences

ABSTRACTThis article links two major areas of work on the geographies of oil: socially produced scarcity and the ‘new realities’ of oil, with wider geographical inquiries, mainly global energy governance. It explores how in the current context characterised by oversupply, power stands out as a key factor in the geopolitics of prices, the interactions amongst energy institutions, the role of supply and demand, and the preferences of the actors involved. Geopolitical approaches find a niche in the gaps left by the increasing complexities of global energy governance. In this regard, energy geopolitics may be thought of as ‘governance by other means’, an alternative to failed external energy governance solutions. The article then focuses on the consequences of the drop in oil prices on producer countries and how it will impact the major issues that dominate the literature on energy security. It concludes by stating that there is a need to rethink the geopolitics of energy security in order to incorporate the global governance institutions’ failure to facilitate cooperation as another cause of the re-securitisation of energy policies.

Assessment of Value Added Tax on the Growth and Development of Nigeria Economy: Imperative for Reform

Value Added Tax (VAT) is a consumption tax that is being charged and embraced by many developed and developing countries, which is relatively easy to administer and very difficult to evade. The economic development and growth of any nation depends on government ability to generate adequate revenue in order to effectively provide various infrastructural facilities to satisfy the needs of the population and takes its position among the nations in the global village. The global oil glut has adversely affected the revenue position of Nigeria. The over 60% drop in oil price to below $40per barrel was unanticipated by the government. This has resulted to over 80% fall in the yield(spread) per barrel of oil produced in Nigeria, steep decline in the country’s revenue,2016 budget deficit of over N 2trillion,continuing devaluation of the Naira, slowing Gross Domestic Product( GDP) growth, reduced inflow of foreign direct investment, rising inflation and growing unemployment. The government at the federal level has put a stop on capital projects, while allocation to the states of the federation has reduced resulting in the inability of many states provide relevant infrastructural facilities and pay workers’ salaries ranging from five months to eight months. It is therefore very clear that there is the need to diversify the revenue base of the nation, and Value Added Tax (VAT) is a major revenue source of advanced nations of the world, which much attention is not focused on this area by the federal government of Nigeria. The main focus of this work was to evaluate the impact of VAT on Nigerian economy between its introduction to date to discover the imperativeness of its reform. Ex-post-factor, descriptive and analytical research approach were adopted for the work. Data of VAT and GDP were obtained from 1994-2015, and analyzed to determine the relationship that has been existing between them. It was discovered that VAT has a positive relationship with GDP. The coefficient of the model indicate that a 1% increase in VAT will lead to a 0.88% increase in GDP . This shows a perfect positive correlation between VAT and GDP.It therefore becomes imperative for a reform in VAT.In conclusion,VAT is due for a total reform in rate and clear definition of exempted goods and services.We recommend that the curent 5% should be review upward to a minimum of 10%,Integrated Tax Offices should be stenghtened to increase efficiency and effectiveness,Federal Inland Revenue Service should address tax evasion,government should use VAT revenue judiciously to encourage tax payers and government should clearly define excempted goods and services so as to charge vatable goods that are currently not vatable.

Falling oil prices: Causes, consequences and policy implications

Following four years of high stable prices at about 107 $ per barrel, crude oil prices have fallen sharply since summer 2014 and are projected to stay at low level for an extended period. There are multiple factors which are being considered behind this plunge in the oil's prices. Most observers have conjectured that domestic oil boom in the United States and Iraq is the major cause for the falling oil prices. Some have suggested that a major shock to oil price expectations occurred after the November 2014 meeting of OPEC, when they did not cut production despite the steady increase in non-OPEC oil production.In the first part of the publication, we quantitatively analyzed the effect of various factors on the oil prices and then we studied the contribution of geopolitical strategies of US and Saudi Arabia towards this oil crash. We conduct comparatively analysis of the recent drop in oil prices with previous incidents up to 1996. We than show that the demand and supply formula cannot be implemented to the current oil plunge.We studied the economic and financial consequences of the current oil bust. Lastly the paper discusses the projections of oil prices.

Impacts of low oil price on China and the world natural gas industry chain

Since the second half of 2014, the crude oil price has been in rapid decline, which poses profound impacts on the global natural gas industry chain. The issue started to surface in the oil and gas sector on how to survive in such a situation. In this paper, an overview was first made on the world natural gas industry chain experiencing from the high-oil-price period to the low-oil-price period, then the influences of low oil price on natural gas production patterns, prices and development prospects, etc., and finally discussion focus was put on the challenges and opportunities brought about by the sustained low oil price to the natural gas industry chain in present China. The results are concluded as follows. First, under such low oil price situation, oil and gas companies at present have to cut capital expenditure to such a degree that the oil and gas output will be both of particular concern in the future. Second, low oil price will compel the falls of global natural gas prices to different degrees, so natural gas economy will drop greatly compared with crude oil prices. Third, such a low oil price will exert more severe impact on the high-cost unconventional natural gas sector; as a result, many unconventional oil and gas companies have suffered frequent bankruptcy at abroad, while such companies in China are holding different attitudes towards unconventional natural gas. Fourth, the oil and gas M&A market remains a laggard due to many other reasons. Fifth, this drop in oil prices is just occurring at the time when natural gas is developing so rapidly in China, which will bring both challenges and opportunities to the industrial structural reform of natural gas in China.

An overview of the enzyme potential in bioenergy-producing biorefineries

Biorefineries are considered as an integrative thinking that focuses on the possibility of obtaining as many added-value products as technically and economically feasible. However, in practice most biorefineries comprise only enzymatic or chemical pretreatment followed by biofuel generation. The drop in oil prices may menace the development of this young industry, as has happened before in history. This has become a fundamental reason for which the biofuel industry should not consider only biofuels production, but enzyme and non-fuel based chemicals as well. Hence, this work aims at overviewing the most important enzymes involved in biotechnological processes and to describe their role in biorefineries. Bioethanol, biogas and biodiesel biorefineries are overviewed, along with the integrated and industrial types. Finally separation and purification processes in biorefineries are discussed. © 2016 Society of Chemical Industry

انهيار أسعار النفط ومحاولات الإصلاح في الدولة الريعية : الجزائر مثالا = Drop in Oil Prices and Attempts of Reform in Rentier States : The Case of Algeria

​تأثّرت الجزائر، بصدمة انهيار أسعار النفط الراهنة على مستوى أرصدة المالية العامة والحساب الخارجي. وتمثّل الصدمة الراهنة مناسبة حقيقية لإطلاق إصلاحات اقتصادية عميقة. تُحاول هذه الدراسة مُعالجة هذه الإشكالية.

The Prospect of Infrastructure Public‐Private Partnerships in Kuwait, Saudi Arabia, and Qatar: Transforming Challenges into Opportunities

This article examines the prospect of using infrastructure public‐private partnerships (PPPs) within Kuwait, Saudi Arabia, and Qatar in light of the drastic drop in oil prices since mid‐2014. It argues that, while PPPs appear to be a strategic policy option for the three Gulf Cooperation Council (GCC) states to tackle growing fiscal deficits, these states are constrained by numerous governance‐related, administrative, and regulatory challenges that make PPPs problematic. Effective implementation of the inherently complex and contractual PPP policy requires addressing the existing institutional, economic, bureaucratic, and cultural constraints within these three states. This article concludes with recommendations to mitigate these challenges, that require serious political will and sufficient time to yield positive results, and to attract international investors and contractors to the Gulf region. © 2016 Wiley Periodicals, Inc.

The geopolitical impact of the shale revolution: Exploring consequences on energy prices and rentier states

While the shale revolution was largely a US’ affair, it affects the global energy system. In this paper, we look at the effects of this spectacular increase in natural gas, and oil, extraction capacity can have on the mix of primary energy sources, on energy prices, and through that on internal political stability of rentier states. We use two exploratory simulation models to investigate the consequences of the combination of both complexity and uncertainty in relation to the global energy system and state stability. Our simulations show that shale developments could be seen as part of a long term hog-cycle, with a short term drop in oil prices if unconventional supply substitutes demand for oil. These lower oil prices may lead to instability in rentier states neighbouring the EU, especially when dependence on oil and gas income is high, youth bulges are present, or buffers like sovereign wealth funds are too limited to bridge the negative economic effects of temporary low oil prices.

Prospects for Hydrogen Production in Oil Shale Processing Industry in Estonia: Initial Aspects of Life Cycle Analysis

Climate initiatives as well as unpredictable changes of oil prices, requires fossil fuel industries urgently consider transition towards production of decarbonized fuels. Oil shale processing industry in Estonia also has been substantially effected by oil price drop. To improve the economic feasibility of the oil shale processing plant in Estonia, integration of a hydrogen production unit based on catalytic steam reforming technology with pressure swing adsorption purification is analysed in this paper. Methodology for evaluation of conventional oil shale processing industry transition to hydrogen production industry considering initial life cycle assessment elements is discussed in the paper.

Egypt Strives To Bolster Economy With Foreign Investment, Imports

Middle East Special Section An international bidding round for oil and gas announced on 1 August is Egypt’s most recent move to bolster its lackluster economy. The country is facing a severe dollar shortage as a drop in tourism, capital, and exports have caused international reserves to sink by more than half to USD 16.4 billion since the political instability in 2011. Economic activity and vital imports also have been limited by the country’s arrears owed to foreign oil companies. In July, Petroleum Minister Tarek El- Molla said the arrears were reduced to USD 3.4 billion in 2015–2016 from USD 3.5 billion a year earlier. He said the crude oil and natural gas received from the foreign partners’ share during 2015– 2016 was worth USD 5.4 billion, and Egypt paid the partners USD 5.5 billion. Egypt was once an oil exporter, but declining production and increasing subsidized consumption have turned it into a net importer. It is dependent on imported gas largely from Iraq and Jordan to keep pace with the country’s demand. The high cost of energy subsidies in Egypt has contributed to the country’s budget deficit and the inability of the Egyptian General Petroleum Corporation (EGPC), the country’s national oil company, to pay off its debt to foreign operators. In the fiscal year (FY) 2013– 2014, Egypt spent USD 18.2 billion on oil product subsidies and USD 1.8 billion on electricity subsidies. In FY 2014–2015, the Egyptian government projected the cost of oil product subsidies to fall to USD 9.2 billion as a result of its implemented subsidy reforms and the drop in global crude oil prices since mid-2014. However, Egypt’s spending on electricity subsidies has increased and is budgeted to cost USD 3.6 billion in FY 2014–2015. To avoid significant backlash from the public at the prospect of dwindling subsidies, which now account for approximately one-fifth of the government’s total budget, the country is looking to increase production by appealing to foreign investment in its oil and gas sector. From 2012 to 2013, Egypt’s dry natural gas production declined by 5%. Substantial natural gas discoveries in the Mediterranean Sea and in other areas have been undeveloped because the price that the government was willing to pay foreign operators for the gas was too low, making some projects commercially unviable. However, in recent years Egypt has signed deals to pay foreign operators a higher price for the natural gas they produce.

World Economic Prospects

Overview: global economy unfazed by Brexit vote Our world GDP growth forecast for 2016 has been revised down this month, to 2.1% from 2.3%. In large part, this reflects a weaker profile in the US where growth is now seen at only 1.5% this year (from 2% before) following a weak H1. For 2017, however, our global growth forecast is unchanged at 2.6%. This reflects the fact that, more than a month after the UK Brexit vote, conditions in the global economy look relatively positive. Financial markets, after an initial dip, have rallied strongly with world stocks above their pre‐referendum levels and high‐yield bond spreads narrower. One reason for this is a real improvement in the pattern of incoming economic data, especially in the advanced economies. The Citigroup economic surprise index for the G10 has risen to its strongest reading since the start of 2014. Meanwhile, back‐to‐back strong employment reports in the US suggest consumer spending should remain resilient there. The renewed drop in oil prices in recent weeks should also be a broader, if modest, positive for global growth. Lower bond yields have also helped, although insofar as these reflect expectations of policy easing, moves so far have been limited: Japan's recent policy easing proved disappointing in scale, while the bolder Bank of England moves have come too recently and operate too narrowly to have had much impact. There are also still considerable weaknesses in the global economy. Weak banks in Europe could damage credit supply, investment remains sluggish in the advanced economies and world trade growth is still very modest. This month sees our world trade growth forecasts revised down to 2.6% for 2017 and 3.3% for 2018 (from 3.4% and 3.9%) as we expect the trade‐GDP elasticity to remain lower for longer. Given these weak points, we continue to take the view that there is a case for a relaxation of fiscal policy in the advanced economies, and especially a boost to government investment which has dropped considerably over recent years in the G7.