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Global Economics

Global Economics Update

Global Economics Update

How much does Taiwan matter?

Taiwan matters far more to the world economy than its 1% share of global GDP would A further escalation in cross-strait tensions that cut Taiwan’s export off from the rest of the world would lead to renewed shortages in the automotive and electronics sectors and put further upward pressure on inflation. In view of the wider interest, we are also sending this Emerging Asia Economics Update to clients of our Global Economics Service.  

8 August 2022

Global Economics Update

PMIs: Weak industrial activity taking pressure off supply

July’s fall in the global manufacturing PMI supported other evidence that the industrial sector is in or close to recession and the forward-looking indicators point to further weakness to come. At least the weakness of demand has caused backlogs of work to ease and suppliers’ delivery times to improve, which should ultimately take some of the pressure off inflation.

1 August 2022

Global Economics Update

Your questions about the Global Economic Outlook

We held an online Drop-In event yesterday to discuss our Q3 Global Economic Outlook and the forecasts within it (see an on-demand recording here). This Update addresses several of the client questions that we did not have time to answer during the event.

28 July 2022
More Publications

Global Economics Update

The natural gas crisis and the global economy

The news today that Gazprom will further reduce its natural gas supply to Europe increases the likelihood of recessions in the euro-zone, UK and parts of Emerging Europe. It also supports our view that inflation pressures will be relatively persistent in Europe, so the ECB and the Bank of England will be forced to raise interest rates further than markets expect. While some economies will benefit from higher gas prices, the net effect will be negative for the global economy. Drop-In (Weds, 27th July): Will high inflation and monetary tightening result in a global recession? Join this 20-minute briefing on our Global Economic Outlook to find out which economies are vulnerable and which could outperform. Register here.

Global Economics Update

PMIs: Recessions knocking at the door

Another month, another set of downbeat PMIs for advanced economies. The demand indicators weakened markedly in the US and the euro-zone for the second month in a row, crossing over into recessionary territory. The flipside of the softer demand is that capacity constraints are alleviating, causing pipeline price pressures to weaken. But we are still well away from central banks easing off on the brake pedal. Drop-In (15:00 BST, 27th July): To mark publication of their latest quarterly Outlook, our Global Economics team will lead a 20-minute briefing about which economies are more vulnerable to a downturn but also where we expect outperformance. They’ll also discuss our latest views on how inflation will continue to dominate policy decision-making – but also why we think some central banks could reverse course on rates starting next year. Register now.

Global Economics Update

Questions (and answers) on the turmoil in Sri Lanka

We held a Drop-In earlier today to discuss recent developments in Sri Lanka, where the economic and political crisis is going from bad to worse. This Update answers several of the questions that we received. In view of the wider interest, we are also sending this Emerging Asia Economics Update to clients of our Emerging Markets Overview and Global Economics Services.

Global Economics Update

What rate of wage growth is acceptable for central banks?

Even though workers are accepting cuts in their real pay, nominal wage growth is still above “acceptable” rates for central banks in DMs of 3% to 4%. This underlines why interest rates need to head into restrictive territory to weaken economic activity sufficiently to bring wage growth back down to these rates. Drop-In (Weds, 6th July): How far has 2022’s food supply shock raised the stakes for monetary policymakers and governments? Join this 20-minute session to find out about the market outlook and the economic risks around elevated food prices. Register now

Global Economics Update

PMIs point to marked easing of goods price pressures

Policymakers will have breathed a small sigh of relief at the latest manufacturing PMI surveys because they contained lots of signals that global goods price inflation will ease later this year. Demand softened, backlogs cleared, delivery times improved, inventories rebuilt, and shortages were reportedly their least severe since the start of 2021. However, the flip side is that global industrial activity is stalling. Drop-In (Weds, 6th July): How far has 2022’s food supply shock raised the stakes for monetary policymakers and governments? Join this 20-minute session to find out about the market outlook and the economic risks around elevated food prices. Register now

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