Another step towards a “soft” Brexit

The proposals expected to come out of the Cabinet meeting at the Prime Minister’s country retreat, Chequers, are unlikely to be accepted by the EU. But the decision to align UK product standards with those of the EU is an important change in the Government’s approach, and takes it a step closer to removing its red line of leaving the Customs Union.
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Japan Economics Weekly

Post-Olympics public spending boost, BoJ holding firm

Japan’s government appears to be lining up a stimulus programme to prevent an economic downturn after the Tokyo Olympics next year. While increased public spending would provide a welcome boost to GDP, we don’t believe there’s any particular reason to expect a post-Olympics slowdown. Meanwhile, the Bank of Japan is bucking the global trend towards additional monetary easing. Unlike some commentators, we don’t think that loosening by other major central banks puts the Bank of Japan’s policy framework under pressure.

21 June 2019

Emerging Markets Economics Chart Book

EM growth running at a three-year low

EM GDP growth slowed to just 3.3% y/y in Q1, its weakest pace since the first half of 2016, and our Tracker suggests that it remained sluggish in Q2. Growth should pick up a little in the second half of the year. Large commodity producers, such as Brazil, Russia and South Africa, are likely to find their feet again after a terrible performance in Q1. And Turkey and Argentina should recover from the downturns caused by last year’s currency crises. But growth will remain weak and, in most cases, our 2019 and 2020 GDP growth forecasts are below consensus.

21 June 2019

Emerging Asia Economics Weekly

Growth continues to weaken, rates to be cut further

After a very weak first quarter that saw GDP growth in many countries drop to a post-financial crisis low, the most recent data suggest growth across Emerging Asia has continued to slow. Weak growth is likely to prompt further interest rate cuts over the coming months across the region. Despite leaving rates unchanged on Thursday, we expect the central banks of the Philippines and Indonesia to loosen monetary policy at their next meetings.

21 June 2019
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