South Africa’s inflation figures for July, due next Wednesday, are likely to show a temporary drop (probably to 4.3%) and the headline rate is likely to rise back to around 5% by early 2027. But we remain of the view that inflation will subsequently drop …
13th August 2026
Strong growth won’t tip the balance towards tightening The acceleration in Polish GDP growth to 0.9% q/q in Q2 underscores that the economy has come through the energy shock in good health and remains an outperformer within Europe. This strong growth is …
This page has been updated with additional analysis since first publication. Resilience in Q2 unlikely to last The 0.3% m/m rise in June and 0.4% q/q rise in Q2 (consensus & CE forecast 0.4%, BoE 0.3%) shows that the economy weathered the energy shock …
Pick up in housing activity unlikely anytime soon July’s RICS survey shows that the near-term housing outlook remains weak and the risks to our forecast that house prices will rise by 1.5% in the year to Q4 2026 are still skewed to the downside. But …
Overview – Strengthening economic growth will not provide much of a lift to the housing market, which we expect to remain in its structural malaise as mortgage rates stay above 6% over the forecast period. We expect total home sales of 4.7m this year to …
12th August 2026
AI is widely considered a threat to India because of the economy's reliance on call centres and BPO. But that consensus is missing how AI is driving changes within the economy. This special online briefing on, Wednesday 26th August, showed you how India's …
President Hakainde Hichilema enters tomorrow’s general elections in Zambia as the frontrunner, buoyed by progress on long-running sovereign debt restructuring and a strong copper windfall. The next presidential term is likely to see stronger GDP growth …
Surprise rebound, but outlook remains poor The stronger-than-expected pick-up in Russian GDP growth to, 1.3% y/y in Q2, is unlikely to be sustained. With headwinds to growth mounting over the second half of the year, we think Russia’s economy will broadly …
The Bank of Korea faces a tricky balancing act. The AI boom is powering chip production and tech exports, but domestic demand remains subdued. Inflation concerns were enough to push the Bank to raise rates for the first time since 2023 last month – will …
US CPI data for July seem unlikely to swing the balance on the FOMC one way or the other, so developments around the Strait of Hormuz and the US August price data are likely to be key. For now, we think the odds of a September hike are ~50/50. US core CPI …
The soft activity data out of Brazil recently highlights that the bumper Q1 GDP growth was a flash in the pan and points to a slowdown towards 0.3-0.4% q/q over Q2-Q3. Taken together with signs that heat has come out of the labour market, we’re becoming …
The Philippines risks falling behind in the AI revolution. Unlike much of the rest of the region, it is neither benefiting significantly from the surge in AI-related electronics exports nor well positioned to capture the productivity gains from wider AI …
September rate hike still just about in play The 0.21% m/m rise in core CPI in July does not really swing the debate for either the doves or the hawks on the FOMC, with our preliminary estimate ahead of the PPI data tomorrow pointing to a similar gain in …
Further inflation rises to come India’s headline consumer price inflation edged up to a 19-month high of 4.5% y/y in July and further rises are going to follow. We maintain our view that the RBI will start hiking interest rates over the coming months. …
Korea’s chipmakers have announced huge investment plans which means that the near-term risks to our GDP forecasts are tilted to the upside. But we expect the AI boom to run out of steam in 2028 so the good times won’t last. It is well known that Asia is …
Media reports point to renewed scrutiny in Brazil over whether the central bank’s widely watched economic survey is pushing up public sector borrowing costs. But the key issue is that Brazil’s real neutral interest rate (r*) is higher than in most other …
11th August 2026
The argument that S&P 500 earnings growth is broadening out doesn’t really stack up. It remains highly concentrated in two of the three ‘big-tech’ sectors, even allowing for a pick up in some others. Admittedly, those two big-tech sectors – information …
Governments in parts of Sub-Saharan Africa are increasingly turning to interventionist measures to boost refining of commodities. But many of the conditions to make this a success, including transport infrastructure, power supply, and a credible policy …
AI’s global economic shockwaves – From investment boom to productivity gains Capital Economics is pleased to invite you to this special in-person event at Vantage Venues in Toronto from 08:30am-10:00am on Wednesday, 23 September AI is already reshaping …
31st July 2026
Vietnam is set to remain one of Asia’s fastest-growing economies over the rest of the decade. The government could probably push growth towards its target of 10% between now and 2030 by further loosening fiscal and monetary policy, but doing so would come …
Home sales activity remains anaemic The modest fall in existing home sales in July will probably be followed by further declines in the next few releases, reflecting the steady rise in mortgage rates through June and July, which reached a high of 6.8% at …
AI’s global economic shockwaves – From investment boom to productivity gains Capital Economics is pleased to invite you to this special in-person event in the Humaniti Hotel Montreal, from 08:30am-10:30am on Tuesday, 22 September AI is already …
Lower inflation leaves the door open for further easing The drop in Brazilian inflation in July, to 4.4% y/y, leaves the door open for the central bank to continue its easing cycle with a 25bp cut at its next meeting in September. The outturn was down …
Lower interest rates and an improving bank lending environment mean we expect euro-zone investment to pick up in H2, allowing the full-year total to rise by somewhat more than the 15% annual rate of the past couple of years. Pan-European (excl. UK) …
While Turkey has come through the energy shock without major balance of payments strains, the trade-off facing policymakers between reducing inflation and restoring external balance is getting starker. The economy requires a weaker lira and weaker …
Private sector credit growth in Saudi Arabia has slowed sharply over the past year and we think it’s likely to act as a headwind to the recovery in non-oil sectors from the Iran war. Private sector lending in the Kingdom has been weakening since the …
While the RBA’s decision to leave rates unchanged today was widely expected, the Board took pains to reiterate that it remains prepared to tighten policy further if needed. However, despite its tough talk on inflation, we don’t believe the Bank will go as …
RBA tones down hawkish bias just a touch The RBA predictably left rates unchanged at its meeting today.While the Board continued to talk tough on inflation, we don’t believe that it will go as far as to hike rates again this cycle. The RBA’s decision to …
The m/m declines in both consumer and producer prices in July largely reflect the pullback in global oil prices. But falling prices also underscore that domestic deflationary pressures remain entrenched. We expect both consumer and producer price …
10th August 2026
The nomination today of Bank Indonesia’s senior deputy governor, Destry Damayanti, as the sole candidate to replace Perry Warjiyo is a welcome development. It should help ease concerns over the central bank’s independence and is one of a number of recent …
AI’s global economic shockwaves – From investment boom to productivity gains Capital Economics is pleased to invite you to this special in-person event in The Hyatt Regency, Boston from 08:30am-10:30am on Thursday, 24 September AI is already reshaping …
One question frequently asked by clients about the latest refresh of our EM Financial Risk Indicators is why currency crisis risks have remained so low through the energy shock. In part, it reflects shifts in trade related to energy and AI. But the …
With Labour MPs unlikely to stomach big spending cuts and the markets unlikely to tolerate big increases in borrowing, higher taxes perhaps worth up to 0.8% of GDP may do the heavy lifting in funding Prime Minister Burnham’s policy ambitions. We suspect …
Equity markets shrugged off last week’s big downside surprise in US payrolls but would probably find negative news on US inflation harder to absorb. That would also put renewed pressure on the yen, which is already slipping back after the recent round of …
Thailand’s re-elected government began its new term with a strong mandate and a rare opportunity to pursue structural reform to boost long-term growth. Six months on, that opportunity risks being squandered as short-term policy priorities take precedence. …
Iran’s financial lifeline has been cut by the US blockade, and the economy will remain in a very depressed state unless it can secure concessions. But whether this happens ultimately comes down to the degree of economic pain that the Iranian regime is …
The cacophony surrounding a recent US-Japan intervention to shore up the yen has focused largely on what it says about the international monetary system. Less attention has been paid to the domestic economic conditions that weakened the currency so much …
A jam-packed episode begins with Group Chief Economist Neil Shearing joining David Wilder to discuss what a surprisingly weak US employment report means for expectations that the Federal Reserve will cut interest rates in September. Neil and David are …
7th August 2026
We would not read too much into the fall in payrolls in July, but the lack of wage pressures clearly reduces the need for the Fed to raise rates soon unless the price data next week deliver a big upside surprise. Hiring loses momentum The 23,000 decline …
The latest payrolls data raise the bar for a rate hike next month, but we still think the Fed will hike by more than is discounted over the coming year. That would spark a sharp sell-off at the short end of the Treasury curve and do little to help the …
Following last week’s stronger-than-expected preliminary estimate of second-quarter GDP, this week brought more good news on the labour market front. The 75,100 surge in employment in July marked the third consecutive monthly rise and brought the …
Chinese supply isn’t easy to replace The US is drafting a ban on imports of Chinese optical transceivers, according to a Reuters report published this week. Optical transceivers are the components that convert electrical signals into light so that data …
After four years of near-continuous contraction, the industrial sector is getting back on its feet. In fact, since September 2025, manufacturing output has risen by 3.8%, almost three times the 1.3% rise in services output over the same period. July’s …
What might de la Espriella mean for BanRep? Abelardo de la Espriella’s swearing-in as president today will make Colombia the latest country in Latin America to shift to the right . Investors have reacted positively, with the peso up close to 19% against …
Weak July jobs report will revive concerns about the labour market Although the hiring weakness in the July employment report has not been reflected in the broader set of labour market indicators, it is still likely to revive concerns among Fed officials …
Employment doing much better The surge in employment in July following last week’s strong preliminary second-quarter GDP growth estimate is further evidence that the economy is gaining momentum after a weak start to the year. While the Bank of Canada is …
This Focus provides a detailed analysis of recent changes in US tariff policy and discusses what future changes are likely. It addresses some key questions about how the new Section 301 and Section 232 tariffs compare to the previous Section 122 and IEEPA …
The art of the deal keeping quiet Developments surrounding the status of the Strait of Hormuz have caused another volatile week for oil prices. Oil prices fell sharply in the first half of the week after the US cancelled strikes on Iran and progress was …
