TRENDS TO WATCH IN 2018 AND BEYOND
►Cheap energy to drive growth in the 2020s
The report sees oil and gas prices holding up close to $60 until the early 2020s and falling to $40 in current prices by
2032. This is due to growth of energy supplies from fracking, economic activity dematerializing, reducing the energy content of GDP, and the substantial growth in the use of renewables for power generation, according to the report. “The falling real price of energy will impede the growth of those resource based economies that fail to diversify but will boost growth in the majority of economies” it said.
►Climate change starts to impede growth in some countries
Previously the consensus economic view was that the negative economic impacts of global warming would only seriously start to affect the world economy after 2050. It now looks as though this will happen earlier and we have tentatively adjusted forecasts for countries with major coastal population centers close to sea levels. The report assumes increased infrastructural spending for flood defenses and estimates that global sea levels will be12 cm higher than in 2017 by 2032.
►Weaker oil price changes political balance in Middle East
Currently the Saudi Arabian economy is 54 percent larger than the Iranian economy and 94 percent bigger than the Israeli economy. “By 2032 the Iranian economy will be bigger while the Israeli economy will be nearly as large and, with 10 percent of its employees in tech, a technological superpower. The diminishing relative size of oil economies will affect the political balance in the region,” the report says.