World events that impacted the economy

China's economy slowed while refugees and migrants arrived in Europe at an ever-growing place. Photo / AP

Jeremy Warner takes a look back at major world events in 2015 and weighs up their impact on the economy.

1) Declining oil prices

Saudi Arabia's decision to let the "markets decide" was admittedly taken in late 2014, but against expectations, it has stuck with this strategy and shows few signs of changing. Indeed, it may now be unable to.

A burgeoning budget deficit means it needs every cent it can get, and must therefore keep pumping just to stay afloat. The same goes for both other opec members and for Russia. The glut in supply may have become a much more prolonged affair than generally appreciated.

For now, the oil price seems destined to be stuck in a range of us$30 ($43.75) to us$60, providing a major economic boost for big consumers such as the united states and Europe.

If it is permanently anchored in this range, there are obviously also equal and opposite negative implications for big producers, including oil majors such as bp and shell.

2) Climate change breakthrough

it's easy to be cynical about the outcome of the cop21 agreement in Paris, but this too may in time have profound implications for the future of hydrocarbons. If nothing else it symbolically marked the point at which the world collectively decided, in principle at least, to set a course for a carbon-free economy.

With wind and solar on track to exceed 100 gigawatts in new installations for the first time this year, 2015 is shaping up to be a transformational year for energy supply.

3) Iranian detente

we are not yet there, but amid the sense of growing geopolitical instability, there was at least one piece of good news - 2015 was the year in which Iran came in from the cold. The promised end to sanctions will in time provide another substantial boost to oil supply, helping to keep the price low.

4) China slowdown

this was the year the wheels began to come off the Chinese growth story. Attempts to rein in runaway credit growth in combination with a vigorous official crackdown on corruption sent a chill through the world's fastest-growing major economy, causing it to stall completely at one stage this year.

A consequent end to the commodities "super-cycle" pushed some producer nations, including brazil, into recession. China's attempt to shift from reliance on investment and external demand to domestic consumption may in time be positive for the world economy, but the transition is testing Beijing's reputation for being able to walk on water to its limits.

5) Greek stand-off

that same sense of abatement in the eurozone crisis was underpinned by Greece's farcical - and fruitless - game of political brinkmanship over continued membership of the single currency.

Elected on an apparently irreconcilable agenda of both rejecting further austerity and remaining in the euro, Alexis Tsipras' populist government went to the wire and then capitulated, agreeing to a further austerity programme that was, in some respects, worse than the one originally rejected. For now, the euro has been saved. That there will be future, existential crises remains certain.

6) Migrant mayhem

as one European crisis subsided, another began. The response to the migrant crisis somehow managed to match even Europe's disastrous handling of its economic travails in bumbling, alienating, disjointed incompetence.

Misguided attempts to impose order on the middle east has succeeded only in sparking an invasion of migrants and a wave of jihadist terror on the west's own doorstep. German chancellor Angela Merkel's decision to accept 1 million Syrian refugees brought the EU to the edge of destruction, with borders re-imposed.