We are pleased to publish full-year results in line with our expectations. Our innovative product offering, appropriate distribution channels, extensive international presence and prudent risk management have all contributed to the significant improvement in our results.
Latin America is a major producer of commodities and the recent drop in oil prices is impacting the region’s countries in different ways. Which countries could benefit from lower international quotations - and why are others negatively impacted?
Oil prices have been in freefall over recent months, from their peak of 114.81 USD onJune 20 2014, to 48.47 USD on January 28 2015 (see chart 1). The 57.8% contraction is associated with an increase in output, combined with lower demand. On the supply side, the recent shale revolution in the US has raised production in the country to the highest level in three decades. In counterpart China, which is the main consumer (12% of total oil consumption), has demanded lower volumes due to the slowdown in GDP growth. The OPEC decision on November 27 to keep production at the same levels, contributed to the downwards pressure on oil prices. The goal behind OPEC´s decision is to discourage investments in new shale fields, as it reduces their relative profitability.
Balkan economies are open to external trade and as such are dependent on global economic developments. They are intimately connected to the Eurozone and benefited last year from clearer signs of improving situation in economies of this significant trading partner. Internally, the Balkans still struggle with subdued domestic demand which is hampered by high unemployment rates.