A summer catch-up

The data released over the northern hemisphere summer break have suggested that economic recoveries in most countries have started to lose some steam. At the same time, while inflation is generally higher now that at the start of the summer, there are signs that it is nearing a peak in most places. Against this backdrop, while the major central banks have begun to discuss tapering asset purchases, the bigger picture is that policy settings will remain extremely accommodative.
Neil Shearing Group Chief Economist
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Global Economics Update

PMIs show growth easing and inflation pressures rising

The flash PMIs for September show that the pace of growth slowed across developed economies towards the end of Q3, suggesting that the boost to activity from reopening is fading. But inflationary pressures show no signs of abating, with indicators of firms’ price pressures increasing again in September.

23 September 2021

Global Economics Update

Thinking through how we could be wrong on Evergrande

If, contrary to our opinion and the consensus, a collapse of Evergrande ends up having a significant impact on the rest of the world, it will be because it first causes either major financial dislocation within China or a property-led slump in China’s economy. The latter is probably the bigger risk for the global recovery. In view of the wider interest, we are also sending this Global Economics Update to clients of our Emerging Markets Service.

Drop-In: Evergrande – What are the risks to China and the world? Chief Asia Economist Mark Williams and Senior China Economist Julian Evans-Pritchard will be joined by Senior Markets Economist Oliver Jones to take your questions about the Evergrande situation. They’ll be covering the implications of collapse for China’s financial system and growth outlook, and assessing the global markets fallout. Register here for the 0900 BST/1600 HKT session on Thursday, 23rd September.

22 September 2021

Global Economics Update

Surge in gas prices adds to near term price pressure

In this Update, we answer six key questions about the surge in natural gas prices. The key point is that it will keep inflation in DMs and many EMs above central bank targets for a few months longer than we had previously assumed. Governments are already preparing to limit the economic damage and central banks are likely to look through this temporary spike in inflation. But this comes at a time when a host of shortages are already pushing up prices and adds to the upside risks to our inflation and interest rate forecasts.

21 September 2021

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Emerging Markets Economics Update

Five years on from the “End of a Golden Age”

Five years ago this October, we published a piece arguing that the “golden age” for emerging markets had ended and that they were entering a period of permanently weaker growth. Since then, many of the structural problems that we anticipated have begun to bite and growth has weakened. There’s little that governments can do to restore economies to their previous rates of expansion since these were boosted by a series of one-off factors that can’t be repeated. But at the same time, there are few signs that they are embracing the policy reforms that could help cushion the slowdown.

18 August 2021

Global Economics Update

The global implications of a slowdown in China

The slowdown that we anticipate in China over the next 6-12 months is best viewed as a return to normality following a period of above-trend output. While it will be a headwind to growth in some industrial commodity producers, we do not think it will derail recoveries in the world’s major advanced economies.

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Global Economics Update

Delta variant is a much bigger threat to EMs than DMs

The apparent success of vaccines at preventing severe illness and death from the Delta coronavirus variant should mean that it does not pose a major threat to recoveries in most advanced economies. However, the rapid spread of the Delta variant poses a more significant threat to recoveries in large parts of the emerging world, where vaccination rates are lower.

14 July 2021
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