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The IMF’s latest projections for global growth, published today, are in line with ours (using official figures for China) and point to healthy global GDP growth of about 3½% in the coming year or two. … IMF’s forecasts reflect a bright economic …
18th April 2017
Geopolitical concerns have boosted demand for safe-haven assets in the past week, and have pushed up measures of implied volatility in equity markets. But experience suggests that geopolitical events rarely have long-lasting economic consequences and the …
13th April 2017
Global monetary conditions remain supportive for the world economy. In the four major advanced economies, bank lending to both households and non-financial companies is expanding steadily, and interest rates are set to stay very low. … Money and credit …
Global growth has picked up in recent months and looks set to be fairly strong for the next two years. The US economy has a lot of momentum even without the planned fiscal stimulus, and prospects for the euro-zone have brightened despite political …
11th April 2017
Upbeat economic data for the first quarter of the year have prompted us to raise our forecasts for growth in several economies. But underlying wage and price pressures remain exceptionally low outside the US, meaning that central banks other than the Fed …
7th April 2017
Aggregate measures of credit growth in advanced economies have slowed sharply in the past month or two. But this is almost entirely due to weakness in the US, which we do not expect to last. What’s more, a range of other indicators suggest that the …
6th April 2017
The world economy has entered the second quarter in good shape. Business surveys edged higher in March and point to strong global growth in Q1. Consumer confidence in advanced economies has risen to a ten-year high, consistent with a big increase in …
5th April 2017
The latest PMIs suggest that global manufacturing activity remained strong in March, adding to evidence that the global economy is in good shape. Surveys also suggest that pipeline inflationary pressures in advanced economies may be close to peaking. … …
3rd April 2017
Policymakers in the world’s major central banks have struck a more hawkish tone in recent weeks, but we expect policy to be tightened only in the US this year. While the ECB may announce plans to taper its asset purchases as soon as September, suggestions …
29th March 2017
The latest data suggest that the recovery in world trade which appeared to take hold at the end of last year has continued in 2017. What’s more, the immediate outlook seems reasonably bright, with many indicators pointing to even stronger trade …
27th March 2017
The “flash” PMIs, published by Markit earlier today, suggest that a strong and broadbased global recovery has continued in March, even though the numbers for Japan and the US slipped a little compared to February. … Flash PMIs …
24th March 2017
The forces which have weakened the relationship between unemployment and inflation in recent decades are likely to persist, or even gather strength, in the coming years. If so, wage and price pressures will remain subdued even as the world economy reaches …
23rd March 2017
Labour markets have continued to recover in all of the four major advanced economies in recent years but prospects for wage growth still differ considerably. The rise in earnings growth in the US is likely to continue. But a large amount of spare capacity …
20th March 2017
The recent drop in oil prices has raised the question of how the world economy would cope with a another sustained slump in prices. While some big oil producers would take a hit, and inflation would fall sharply, we suspect that global growth would be …
17th March 2017
There is an increasingly common view that we are on the cusp of a global policy tightening cycle. However, while we no longer expect many central banks to loosen policy further, we expect interest rates in many advanced economies to remain at rock-bottom …
16th March 2017
The most noteworthy thing about this weekend’s gathering of finance ministers and central bank governors in Baden-Baden may be that it turns out to be as uneventful as previous G20 meetings. If so, this would be good news as it would signal that the US is …
15th March 2017
Headline inflation is now above the target in the US and close to it in the euro-zone and UK. We expect the average inflation rate in advanced economies to be fairly stable at around 2-2½% for the next two years or so. However, underlying inflation rates …
14th March 2017
The most recent retail sales and industrial production data for several advanced economies have not been as strong as the business surveys. While the reasons for this discrepancy are not clear, it does suggest that first-quarter GDP growth will be less …
8th March 2017
Business and consumer surveys suggest that the strong start to the year continued in February. The global composite PMI remained close to a three-year high and is consistent with world GDP growth of around 3½%. Headline inflation has rebounded sharply …
6th March 2017
Global manufacturing continued to expand very strongly in February, according to the latest batch of PMIs, published today. Indeed, the PMIs of nearly all the major advanced and emerging economies rose, or at least came in at fairly high levels. … Global …
1st March 2017
The striking pick-up in world GDP growth since early last year is partly due to China’s policy stimulus and the stabilisation of oil prices, but it also reflects the recovery from the financial crisis. Looking ahead, growth is unlikely to accelerate …
It seems increasingly likely that the much anticipated Trump fiscal stimulus will not take place until later this year. But economic growth and headline inflation have both picked up in the US and this has strengthened the case for the Fed to raise rates …
27th February 2017
The latest data suggest that global trade growth picked up at the end of last year and business surveys suggest that it remained strong in January. What’s more, President Trump may be beginning to row back from some of his more radical protectionist …
24th February 2017
Credit growth has slowed in the US in recent months, but has edged higher in other advanced economies. As a result, we expect overall credit growth in advanced economies to continue at around 5% or so in year-on-year terms. Meanwhile, bank lending in …
22nd February 2017
Preliminary PMIs, which were published by Markit earlier today, point to continued strong growth in advanced economies in February and are consistent with our view that global economic growth is set to pick up a bit this year. … Flash PMIs …
21st February 2017
While some policymakers have floated the idea that the Fed should begin to shrink its balance sheet soon, we suspect that it will proceed very slowly. And as other central banks will be adding to their assets until well into 2018, it will be many years …
Nominal GDP growth in advanced economies has picked up over the past twelve months or so and is likely to remain fairly rapid during the coming two years. This should help households, firms and governments cut their debt burdens, and this in turn will …
17th February 2017
The new US administration has made a lot of noise about currencies during its first few weeks. But there is little chance of it engineering a move away from the system of free-floating exchange rates between advanced economies, and none whatsoever of it …
16th February 2017
OPEC is unlikely to sustain the production cuts which it implemented in January, but we expect a combination of rising global demand and increased US shale production to keep prices fairly stable for the next year or two. For the world as a whole, this …
13th February 2017
Household spending has picked up in advanced economies recently, and a combination of strong labour markets, lower debt burdens and loose monetary conditions means the outlook is fairly bright. … What are the prospects for consumer …
10th February 2017
The lesson of 2016 is that political shocks often have limited economic consequences. This implies that a period of political chaos or paralysis in Washington may not make much difference to the US economy. However, we suspect that success for eurosceptic …
7th February 2017
Business surveys point to a pick-up in activity at the beginning of the year, particularly in advanced economies. Indeed, the US economy and labour markets are approaching full capacity even though President Trump has not yet announced his planned fiscal …
3rd February 2017
The new “future output” indices, released by Markit alongside their usual complement of PMI data, at best track, rather than lead changes in economic growth. But they do appear to provide a useful check on the headline figures around one-off events such …
In this Focus we consider the outlook for the world economy this year and next, in light of two of the biggest concerns which have preoccupied investors in recent months: US economic policy under President Trump and prospects for China. In both cases we …
2nd February 2017
If the US introduces an across-the-board tariff or border adjustment tax, world trade would not com to a standstill. We suspect that other governments would tread carefully before ratcheting up a trade war, but that they would eventually retaliate in some …
1st February 2017
Business surveys published by Markit earlier today point to a broad-based pick-up in growth at the beginning of the year, with advanced economies in particular gaining momentum. They also signal a further increase in headline inflation in the months …
We estimate that world GDP growth was unchanged in Q4 last year at around 3½% annualised. This is well below its pre-crisis average, but is fairly rapid by more recent standards. What’s more, we expect global growth to remain fairly strong in both 2017 …
31st January 2017
The widespread pick-up in activity and rebound in inflation in advanced economies during recent months has reduced the pressure for central banks to ease policy further. But only in the US do we expect interest rates to rise sharply. With economic growth …
27th January 2017
The pick-up in world trade in the last quarter of 2016 adds to the evidence that the global economy gained momentum late last year. But the key question is whether the new US administration will bring this recovery to an end. Donald Trump’s first few days …
25th January 2017
For now, we don’t know what the US policy will be towards the dollar. If Donald Trump seriously wants a cheaper currency, the best way to achieve it might be through a multilateral agreement comparable to the 1985 Plaza Accord. But reaching such an accord …
24th January 2017
Preliminary PMIs, which were published by Markit today, suggest that growth in the world’s largest advanced economies started the year on a positive note. As such, they do nothing to change our view that global growth is likely to accelerate a bit this …
The world economy looks set to grow more rapidly this year than last. A substantial fiscal stimulus in the US will boost its growth rate, but will have only a limited impact on the rest of the world. With price pressures building in the US but not …
20th January 2017
On the eve of Donald Trump’s inauguration, we still have little detail on what trade policies he will pursue. Here we set out the potential global impact of the various measures he and his team have proposed. … Reconsidering the threat to global trade …
19th January 2017
Consumer price inflation is set to rise sharply in most advanced economies, with the US rate likely to reach around 3% by the middle of this year. However, talk of “global reflation” seems wide of the mark. In many countries, underlying price pressures …
11th January 2017
The world economy is entering 2017 with stronger growth and rising inflation, but prospects for the rest of the year are more mixed. Activity has picked up in unison across the major economies in recent months, and the recent rise in energy prices will …
6th January 2017
The final PMIs for December 2016 add to evidence that the world economy was in good nick at the end of last year and that price pressures have increased. We expect global growth to pick up a bit this year, and headline inflation to rise substantially. … …
3rd January 2017
The latest data show that world trade fell in October, continuing the renewed slowdown since 2015. Looking ahead, while world trade is unlikely to collapse, it will probably remain sluggish for years to come. … Prospects for world trade still …
22nd December 2016
We expect growth in the US to pick up next year as a result of Donald Trump’s planned fiscal stimulus, but in several other advanced economies it is likely to slow. Although headline inflation is set to rise almost everywhere, core inflation should remain …
20th December 2016
Preliminary PMIs, which were published by Markit today, suggest that growth in advanced economies picked up in December and provide more evidence that the world economy is ending the year on a strong note. … Flash PMIs …
15th December 2016
Even before the latest rise in oil prices, the average inflation rate in the G7 was set to rebound to over 2% early next year. In the US, Donald Trump’s planned fiscal stimulus should boost US demand at a time when the economy is already near full …
13th December 2016
