Discipline difficulties meet demand delusion While we learned this week that OPEC+ is sticking to its plan to gradually raise oil output from April (see here ), question marks over production discipline within the group and the strength of global oil …
7th March 2025
Period of strong growth comes to an abrupt end The sharp slowdown in Brazil’s GDP growth, to just 0.2% q/q, in the final quarter of last year confirms that the economy’s recent period of strong growth has come to an abrupt end. We now think the economy …
Another 50bp cut on the cards The rise in Mexico’s headline inflation rate, to 3.8% y/y in February was entirely driven by non-core inflation and therefore won’t be a major concern for the central bank. Indeed, we think that the weakness in the economy …
The latest IPF Consensus Survey was broadly unchanged from the previous forecast round. Total returns at the all-property level are forecast to be 8.0% p.a. over 2025-29, with views ranging from a high of 9.3% p.a. and low of 7.1% p.a. That puts our …
US may be seeking more market access It’s been another eventful week on the tariff front, with the Trump administration going ahead with 25% tariffs on Canada and Mexico (as well as an additional 10% on China) on Tuesday before then announcing carve outs …
Taiwan vulnerable to semiconductor tariffs China, Mexico and Canada have so far been the focus of Trump’s tariff measures. But it seems likely other countries will soon enter the firing line. Given its large trade surplus with the US, Taiwan is an …
This page has been updated with additional analysis since first publication. House prices may be starting to lose some momentum The small 0.1% m/m fall in Halifax house prices in February is at odds with the 0.4% m/m rise in the Nationwide measure and …
Biggest pay hikes since 1991 forthcoming Japan’s Trade Union Confederation (RENGO) revealed yesterday that its members are requesting a 6.09% rise in pay (including seniority pay hikes) in this year’s spring wage negotiations (Shunto). That marks an even …
Foreign and domestic demand both under pressure Export growth cooled over the first two months of 2025, with tariff front-running providing less of a boost to demand than we had anticipated. This slowdown comes before any substantial hit from tariffs, …
RBA won't provide much interest rate relief The minutes of the RBA’s February meeting confirmed that the Bank’s decision to cut rates last month had come down to the wire. Moreover, with concerns still persisting about lingering inflation risks, the Board …
The shift in the ECB’s tone today to acknowledge the increased uncertainty surrounding the outlook has pushed euro-zone bond yields up slightly, extending their surge over the past few days. Given recent developments, we have raised our forecasts for the …
6th March 2025
Weak global demand a risk to OPEC+ plans The recent confirmation from OPEC+ that it intends to go ahead with the plans to gradually increase oil production from April has coincided with ongoing signs of weakness in global oil demand. Although OPEC+ has …
OPEC+ has now confirmed that it will finally begin to unwind its oil production cuts from the start of next month, providing a gradual boost to Gulf oil sectors and GDP growth. But with oil prices sliding and Aramco reducing its dividend, questions are …
Recent strength of GDP and employment data irrelevant amid existential tariff threat Even if tariffs soon lifted, Bank could cut by more than markets are pricing in this year If tariffs are sustained, Bank could eventually return interest rates to …
This third edition of our annual Climate Economics Outlook updates our long-term emissions forecasting framework to incorporate our latest macroeconomic and energy views. Note: You can create your own emissions scenarios with our interactive Emissions …
Alongside today’s decision to cut the deposit rate from 2.75% to 2.50%, the ECB adjusted its messaging to signal that the outlook for monetary policy has become less clear. We still think that the Bank will lower interest rates further but now forecast …
The unravelling of US exceptionalism in stock markets since Donald Trump returned to the White House on 20 th January has been mainly driven by concerns about the US’ dominance of AI and the relative health of its economy (which has also dragged down …
An immersive, interactive guide to the most pressing issue facing the global economic outlook. Click below to start exploring and learn which economies are most exposed to higher tariffs, which are most vulnerable to them, and the steps that could be …
Trade deficit hits all-time high as importers continue to rush to beat tariffs The ballooning of the trade deficit to a record high of $131.4bn in January once again stemmed from a huge surge in imports as businesses rushed to fast-track orders before new …
Exports to the US reach a record high amid tariffs The huge increase in exports in January was in line with the timely advance US data released last week and implies US importers looked to front-run tariffs ahead of Donald Trump’s return to the Oval …
Period of unanimous support for rate cuts is over The ECB’s decision to cut its deposit rate from 2.75% to 2.50% today came alongside new language which shows that policymakers are becoming less certain about the future path of interest rates. Looser …
Although our forecast for first-quarter GDP growth is now down to -1.9% annualised, we still believe that, on balance, the US economy will escape recession and rebound in the second quarter, as the distortion caused by the unseasonably severe winter …
In this Update , we put into context the recent surges in Bund yields, German equities, and the euro that have been triggered by expectations of a significant loosening of fiscal policy in Europe’s biggest economy. We have discussed here the economic …
CBRT cuts again, easing cycle has further to run The communications accompanying the decision by the Turkish central bank (CBRT) to cut its policy rate by 250bp again today, to 42.50%, suggest that policymakers were reassured by the fall in inflation in …
Retail sales drop at the start of 2025 January’s fall in retail sales adds to the impression that the euro-zone economy started 2025 on a weak footing. We expect consumer spending growth to be subdued in the coming quarters. The 0.3% m/m fall in euro-zone …
Higher costs drive construction activity to post-pandemic low The headline CIPS construction PMI dropped to 44.6 in February, from 48.1 in January, which was the lowest reading since May 2020. Part of the decline was due to a sharp fall in the volatile …
Vietnam has seen a surge in exports to the US in recent years and arguably emerged as the biggest winner of Trump’s first trade war with China. However, Vietnam’s huge bilateral trade surplus with the US makes it a likely target for penal tariffs in …
Shunto set to result in stronger pay hikes than last year With Japan’s trade unions requesting an even larger pay hike in this year’s spring wage negotiations (Shunto) than they did a year ago, we now expect the negotiations to result in a base pay hike …
Rates on hold (again), no change likely this year Bank Negara Malaysia (BNM) today left its main policy rate unchanged at 3.0%, and once again made clear that it was in no rush to adjust its monetary policy settings anytime soon. The decision comes as no …
Rebound in inflation this year means no further Riksbank cuts CPIF inflation rose in February to 2.9%, supporting our view that the Riksbank’s loosening cycle is over. CPIF inflation (2.9%) and CPIF inflation excluding energy (3.0%) were both stronger …
President Donald Trump's decision to grant a one-month exemption to the Big Three Automakers (Ford, GM & Stellantis) is something of a disappointment given the earlier heavy hints from his Commerce Secretary Howard Lutnick that more widespread relief was …
5th March 2025
Notice: This publication was revised on 07/03 to accurately reflect the deficit on the funds budget in 2024, taking into account the funds used for the local government refinancing scheme that year. The original version of the publication stated that …
While the 0.1% q/q rise in GDP in Q4 of last year was stronger than we and most other forecasters expected, the combination of higher taxes for businesses announced in last October’s Budget, a lingering drag from the previous interest rate hikes and …
Five years ago, we were downbeat about the immediate prospects for the largest city real estate markets, the so-called gateways, and that view has proved correct. But we also argued that this malaise would be short lived and strong fundamentals would be …
February’s batch of PMIs across the Gulf were generally softer and we think that non-hydrocarbon sectors in the Gulf will record weaker growth this year. In contrast, Egypt’s economy appears to be recovering from its slowdown last year induced by shift …
Services sector holding up despite policy uncertainty After the slew of weaker activity and survey data in recent weeks, the small rise in the ISM services index in February should provide some reassurance that the floor is not falling from under the …
Although industrial metals prices have risen following the National People’s Congress (NPC) in China, we still think that prices will fall over 2025 and 2026 given that the policies outlined do not go far enough to address the structural headwinds facing …
The agreement on a reform of the national fiscal rule reached by Germany’s likely next coalition partners suggests they will implement a significant fiscal stimulus of perhaps around 1% to 2% of GDP over the next two years. This could lift GDP growth by …
Fall in applications signals a weak Spring sales outlook The sharp fall in home purchase mortgage applications in February confirms that the rebound in mortgage rates late last year is suppressing home purchase demand. Recent declines in Treasury yields …
We don’t see anything in the outcomes of China’s NPC meetings to abandon our upbeat near-term view on the country’s stock market. China’s equities have been pushed in all sorts of directions lately, albeit more up than down. Late last year there was the …
This page has been updated with additional analysis. Risks of deflation easing While we still think the SNB is most likely to err on the side of caution and cut its policy rate by a further 25bp on the 20 th March, higher than expected inflation in …
Prabowo Subianto came into office in Indonesia in October pledging to raise economic growth to 8%, up from around the 5% rate it has been stuck at recently. However, the policy changes he has introduced so far risk causing trend growth to slow. One of …
Little prospect of a reflationary rebound Chinese policymakers have stuck with an ambitious target for real GDP growth but have become more cautious on the outlook for nominal growth and inflation. And while they did deliver some increase in fiscal …
Weak productivity growth will tie the RBA’s hands Although activity picked up firmly in Q4, private demand remained relatively sluggish. Even so, with productivity growth dismal and unit labour cost growth accelerating, the RBA is unlikely to loosen …
Germany loosens the purse strings The announcement by Germany’s Chancellor-in-waiting, Friedrich Merz, that the parties which are likely to form the next government have agreed to substantially boost defence and infrastructure spending is a major policy …
4th March 2025
President Trump’s decision to follow through with tariffs on Canada, Mexico and China, combined with further weak economic data in the US, has resulted in a further flight to safety across financial markets. That may well prove an overreaction – Trump …
The ‘race for space’ following the pandemic and shift to remote work is evident in both the UK and US, with houses becoming more expensive relative to flats. And that premium for larger homes looks set to endure. While there may be a further small …
