Economy in review 2015

1) Markets see sharp routs ahead of Fed's rate move

The U.S. Federal Reserve finally raised interest rates on Dec. 16, 2015, ending an extraordinary period of government intervention in the financial markets that started at the height of the recession.  

Although the global markets eased slightly after the Fed's rate hike, emerging markets were largely disappointing over the year as they anxiously awaited the Fed's rate decision, which were compounded by the negative effects of their own local risks. 

AFP photo
The MSCI Emerging Markets Index fell by around 16 percent in 2015, while investors had pulled more than $500 billion from emerging-market equity funds by the end of November 2015, according to the Institute for International Finance. 

Emerging markets, headed by China, will be under sharp focus in 2016 in the wake of further capital outflow to developed markets. According to International Monetary Fund figures, the corporate debt of non-financial firms across major emerging markets exploded from $4 trillion in 2004 to more than $18 trillion as of 2014.

2) Local, foreign risks send Turkish lira into freefall

The Turkish Lira was one of the worst performing currencies in 2015 amid a number of local and global risks, losing around 20 percent of its value over the year. 

The lira fell to record lows of 3.00 to the U.S. dollar over the summer due to domestic political uncertainty both ahead of and after June elections, escalating violence in the country, rising geopolitical risks, growing tension with Russia, the prospect of a lowered credit-rating outlook, the possibility of a U.S. rate hike, as well as questions raised over the independence of the Turkish Central Bank amid harsh...