Filtered by Topic: Monetary Policy Use setting Monetary Policy
Overview – The economy faces a period of weak growth as US tariffs and uncertainty over the future of the USMCA weigh on exports and investment. We forecast quarterly GDP growth of less than 1% annualised on average for the rest of 2025. Tariff effects …
2nd July 2025
Table of Key Forecasts Global Overview – We expect global GDP growth to slow a touch in the next couple of years, as President Trump’s policies weigh on US activity and fiscal policy provides less of a prop to growth in China. India will be a relative …
30th June 2025
Overview – We expect tariffs to have only a modest impact on both real economic growth and price inflation. Admittedly, we do see annualised GDP growth slowing to around 1.5% in the second half of this year, but it should gradually recover from the second …
26th June 2025
Table of Key Forecasts Overview – EM exports have held up well this year despite higher US tariffs, but the growth outlook over the second half of the year looks more challenging. We expect a slowdown in most EMs and our forecasts generally sit below …
Overview – We expect GDP growth across most of Asia to soften in 2025, with many countries likely to record below-consensus growth. The risk of escalating trade tensions remains a key concern, particularly for Vietnam, which is highly dependent on US …
Overview – Australia’s economy is struggling to gain momentum, while the recent rebound in activity in New Zealand isn’t likely to be sustained. As the lull in activity lifts spare capacity, underlying price pressures should continue to ease in both …
Overview – Exports would almost certainly have weighed on China’s growth whatever happened this year, but US tariffs – even at their reduced rate – will worsen the drag. Fiscal support has been propping up domestic demand but will provide less of a …
25th June 2025
Overview – The threat posed by US trade protectionism to the region, for now, appears muted. An improvement in the terms of trade for most countries should mean less downward pressure on currencies and, alongside low inflation, set the stage for more …
23rd June 2025
Overview – The euro-zone’s strong first-quarter growth rate was a result of tariff front-running and will be reversed in Q2 and be followed by weak growth in the second half of the year. Further ahead, we think the euro-zone will grow more slowly than …
Overview – The Bank of Japan will stay on the sidelines for a few more months as GDP growth softens and trade tensions cloud the outlook. But with the labour market set to remain very tight, wages rising strongly and inflation on track to overshoot the …
Overview – The Israel-Iran conflict creates significant uncertainty over the outlook. Our working assumption is that it eases relatively soon, in which case economic growth across the region should pick up. But the turn to fiscal tightening in the Gulf …
19th June 2025
Overview – Emerging Europe is generally less vulnerable than other EM regions to higher US import tariffs, but we have still nudged down some of our GDP growth forecasts for this year. We think the region will follow diverging paths – with Czechia and …
18th June 2025
We'll be online discussing the outlook for Latin American economies and financial markets in an online briefing on Wednesday 18th at 10am ET/3pm BST . Sign up here . Overview – Mexico has emerged from the US’s shift to protectionism better than was feared …
12th June 2025
Note: we will be online to discuss India’s macro and markets outlook and to take your questions at 9am BST/4.00pm SGT on Tuesday, 10 th June. Register for the event here . Overview – India’s economy has had a strong first half of the year and is poised …
9th June 2025
Overview – Our working assumption is that the 90-day pause on the Trump administration’s reciprocal tariffs will be made permanent, with tariffs remaining at 10% for most countries apart from China. Providing Congress soon recycles the tariff revenue into …
16th April 2025
Overview – We’ve become more concerned about the outlook for the economy due to the drags from higher businesses taxes and the more uncertain global backdrop being bigger than we thought and the boost from government spending being smaller. Our forecasts …
31st March 2025
Overview – Economies across Sub-Saharan Africa are amongst the least affected EMs by the protectionist shift that the US is embracing. And growth in the region is set for a modest pick-up on the back of lower inflation and easing monetary policy. But …
28th March 2025
Overview – We’ve raised our GDP growth forecasts across most of the region for this year and think that Central and Eastern European (CEE) economies will pick up pace going into 2026, despite the headwind from US tariffs. An end to the war in Ukraine …
27th March 2025
Table of Key Forecasts Global Overview – We expect the world economy to grow a touch slower in the next couple of years than it did in 2024. Trump’s policies will drag on US growth, policy support will not prevent a slowdown in China’s economy, and looser …
Following the series of US tariff announcements in early April, we have revised our forecasts. You can find the updated forecasts here . Overview – We have raised our assumption for the average US tariff rate that Canadian exporters will face, to a level …
Overview – GDP growth in the Middle East and North Africa will pick up over the next couple of years supported by rising oil and LNG output from the Gulf. However, lower oil prices will result in tighter fiscal policy in parts of the Gulf, particularly …
Table of Key Forecasts Overview – EM GDP growth picked up towards the end of last year, but the outlook is increasingly challenging – and not just because of US import tariffs. Weaker capital inflows, lower commodity prices and tight policy will all drag …
26th March 2025
Overview – Increased US tariffs will exacerbate a broader slowdown in exports. China’s economy will also face continued drags from the property downturn and wider deflationary dynamics. A sizeable fiscal loosening will provide a partial offset but won’t …
Overview – We expect economic growth across the region to remain subdued, with most economies set to record below-trend and below-consensus growth this year. While lower interest rates will provide some support to growth, this boost is likely to be offset …
25th March 2025
Overview – Both Antipodean economies seem to have turned a corner at the end of last year, and we expect the recoveries to gather momentum in the coming quarters. Given the tight labour market and elevated public demand, we believe the RBA will only …
Overview – The euro-zone will get a boost from Germany’s decision to ditch its fiscal rules and ramp up defence spending, as well as the relaxation of the EU’s budget rules. But governments other than Germany won’t loosen policy very much, and the …
21st March 2025
Overview – Mexico is one of the most vulnerable countries to US import tariffs and, at best, the economy will just about eke out positive growth this year. More sweeping tariffs than we have embedded in our forecasts could easily tip the economy into …
20th March 2025
While trade tensions create downside risks, we expect GDP growth to be around trend this year. And following another strong showing in this year’s spring wage negotiations, wage growth will remain high enough to keep inflation above the Bank of Japan’s 2% …
17th March 2025
Overview – India’s economy is emerging from its recent soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 75bps of …
11th March 2025
President Trump’s trade and other policies might cause turbulence over the next few years, but they are unlikely to derail the megatrends which will shape the global economy in the long run. We still expect AI to drive a revival in productivity growth …
25th February 2025
Overview – We expect the incoming Trump administration’s policies to have a mildly stagflationary impact on the economy. Assuming that Trump introduces tariffs and immigration curbs via executive action by the middle of next year, we would expect GDP …
19th December 2024
Tab le of Key Forecasts Overview – Headwinds to growth will remain strong in 2025 and our forecasts lie below the consensus. While more protectionist US trade policy will hit China and Mexico, the impact for most is likely to be limited. Currencies will …
Table of Key Forecasts Global Overview – We expect 2025 to be another year of reasonably healthy global GDP growth and a continued normalisation of monetary policy. To the extent that tariffs hurt the global economy, the damage will be less than …
Overview – The near-term economic outlook has brightened, with lower interest rates feeding through and consumption benefitting from the recent strong pace of real income growth. That should help to drive quarterly GDP growth above 2% annualised in the …
18th December 2024
Overview – Slowing growth across Emerging Europe in recent quarters has set a downbeat tone heading into 2025. With domestic and external headwinds remaining strong, we think that most economies in the region will disappoint consensus expectations for …
17th December 2024
Overview – Falling inflation and looser monetary policy will help GDP growth to accelerate across Sub-Saharan Africa next year. A shift towards trade protectionism in the US will hurt certain sectors in certain countries, but is unlikely to have a …
Overview – China’s leadership has signalled that policy will be loosened further, which will provide a near-term prop to activity. But we still expect China’s growth to slow next year, because of the more challenging external environment and a further …
Overview – We expect economic growth in the euro-zone to remain sluggish. This is partly due to adverse demographics and structural forces hampering the competitiveness of industry. But past monetary tightening will continue to weigh on investment and …
16th December 2024
Overview – We expect another year of below-trend and below-consensus GDP growth in most of Asia in 2025, as tight fiscal policy and weak exports weigh on output. In China, a slowdown in construction will act as a further drag. Inflation is back to (or …
13th December 2024
Overview – Tight policy, deteriorating terms of trade and, in Mexico’s case, US trade protectionism will keep GDP growth in Latin America weak and below consensus expectations in the coming years. Fiscal risks will remain in the spotlight as governments …
12th December 2024
Overview – Although their recent performance leaves much to be desired, we believe that both Antipodean economies are on the cusp of a cyclical upswing. But while the RBNZ has ample room to support the recovery without stoking inflation risks, the same …
Overview – GDP growth in the Middle East and North Africa will accelerate in 2025 on the back of higher oil production in the Gulf. The UAE will be the Gulf’s top performing economy and, elsewhere, we expect that growth in Egypt and Morocco will …
11th December 2024
This publication has been updated to reflect changes to our forecasts after the October GDP release on 13th December 2024. Overview – Despite the deterioration in the outlook for the UK's key trading partners, we remain optimistic that UK GDP growth will …
10th December 2024
Overview – After a stellar run, India’s economy has entered a softer patch that will continue for a few more quarters. We think that will portend an underperformance in local equities relative to other major benchmarks. Headline CPI inflation is likely …
Overview – We are not expecting the planned fiscal policies of the government to derail the economy – we expect GDP to grow by 1.0% this year and by a decent 1.5% in both 2025 and 2026. Instead, the main influence of the government’s plans to raise public …
1st October 2024
Overview – A pivot towards fiscal and monetary stimulus should support China’s growth in the near-term. But the economy continues to be propped up by investment, still elevated levels of construction, and the willingness of trading partners to allow …
27th September 2024
Table of Key Forecasts Global Overview – The global economy has hit a soft patch with the euro-zone virtually stagnant, the US labour market flagging and China rationing its policy stimulus. We expect this weakness to persist around the turn of the year …
26th September 2024
Overview – With the inflation battle all but won, weak GDP growth will force the Bank of Canada into more aggressive action, with a couple of 50bp interest rate cuts to end this year. We expect the Bank to adopt a more measured pace of loosening in 2025, …
25th September 2024
Table of Key Forecasts Overview – Aggregate EM growth is entering a softer patch, despite the tailwind from the Fed’s easing cycle. Growth concerns will prompt central banks in much of Asia to cut interest rates. But stubborn inflation pressures elsewhere …
Overview – A combination of falling inflation and looser monetary policy should help growth to accelerate across Sub-Saharan Africa from early next year. But tight fiscal policy will constrain the recovery and our growth forecasts sit below the consensus. …
