Filtered by Subscriptions: Global Economics Use setting Global Economics
The extensive efforts to contain the coronavirus will cause GDP growth in China and emerging Asia to slow sharply in Q1. We still hope the economic and market disruption will prove temporary. But, given China’s prominent position in global supply chains …
31st January 2020
Having deteriorated throughout 2018-19, the most reliable global economic indicators have stabilised recently, suggesting that the world economy is passing the worst. A range of data for the G7 show this story holds at the country level too. However, …
30th January 2020
Table of Key Forecasts Global Overview – We think that global growth is at or near a trough, with leading indicators picking up around the world and some EMs already experiencing a revival. But the global recovery will be gradual and uneven. The US should …
27th January 2020
World trade volumes fell in November after a slight rise in October. But leading indicators suggest that a turnaround in global trade growth is just around the corner, though the recovery will be gradual. Recent data published by the CPB Netherlands …
24th January 2020
Flash PMIs for January offer further evidence of stabilisation in the world economy. With forward-looking indicators pointing to a gradual improvement, advanced economies are probably past the worst. Composite PMIs rose in the US, UK and Japan at the …
The deal signed yesterday between the US and China was broadly as expected and has not led us to change our economic forecasts. The apparent ceasefire in the battle over tariffs removes a downside risk to growth. But tariffs remain high and we suspect …
16th January 2020
Our estimates of Q4 GDP based on national monthly data and surveys imply that global growth slowed from 3.1% to about 2.6% in quarter-on-quarter annualised terms. But we suspect that this will prove to be the low point before a gradual recovery begins. …
14th January 2020
The assassination of Qassem Soleimani, a major figure in the Iranian regime, in a US airstrike last night has significantly raised the chances of an outright conflict between the US and Iran. We’ve previously estimated that a US-Iran war could shave …
3rd January 2020
Final manufacturing PMIs for December weakened a touch in most major economies, suggesting that global industrial activity ended 2019 on a slightly softer note. The surveys are still consistent with a modest rebound in growth in the manufacturing sector, …
2nd January 2020
Table of Key Forecasts Overview –Inflation in developed markets is likely to be stable in 2020 as a rise in energy inflation is offset by a drop in core. We forecast oil prices to rise to over $70pb in the coming years, so energy prices should now begin …
20th December 2019
We expect the global economy to bottom out around the first quarter of 2020, with growth recovering thereafter. However, the pace of this recovery will be relatively slow and, perhaps most importantly, it will be spread unevenly across regions. The US …
17th December 2019
The details of the reported “Phase One” trade deal between the US and China are sketchy and we are not convinced that it will hold. While the deal removes a downside risk, it does not justify a change in our central forecasts for GDP growth in the US, …
16th December 2019
Flash PMIs for December are consistent with advanced economies having lost momentum in Q4, and forward-looking indicators are yet to suggest that a material rebound is around the corner. Using flash PMIs for the US, euro-zone, UK and Japan, we estimate …
One of the biggest disappointments of this decade has been the stubborn weakness of global productivity growth. While we do not think that this is a permanent shift, a turn-around does not look imminent. And any improvement depends in part on countries …
13th December 2019
The WTO looks set to lose its power to rule on trade disputes this week. This will not immediately transform the economic or policy outlook since the body had been effectively side-lined already. But the failure of world leaders to get it back on track is …
9th December 2019
Now that all major economies have released their Q3 national accounts, it is clear that the world economy pulled off a third consecutive quarter of around 3% annualised growth. (See Chart 1.) And over the past six weeks or so, there has been mounting …
6th December 2019
We do not believe that there has to be a trade-off between preventing global warming and achieving economic growth. Even so, there is a clear risk that the world fails to prevent a significant further rise in global temperatures. Although it is only in …
3rd December 2019
Manufacturing PMIs for November suggest that industrial activity strengthened in most regions. This provides another welcome sign that the global industrial downturn may be bottoming out. In November, the global manufacturing PMI picked up slightly from …
2nd December 2019
We doubt that recent developments in Hong Kong will prevent the US and China reaching a “phase one” trade deal in the coming weeks. But it would do little to boost global growth. And given the fundamental differences between the two sides, tensions will …
September’s fall in world trade volumes was a blow to hopes that the global economy may have reached a turning point. There are some signs of stabilisation in leading indicators of trade, and base effects should push the annual growth rate above zero …
26th November 2019
Flash PMIs for November provide further evidence of a stabilisation in the industrial sector. But with labour markets on the cusp of a marked slowdown, overall economic growth is likely to remain subdued for a while yet. Using flash PMIs for the US, …
22nd November 2019
While we doubt that the growth of collateralised loan obligations has set the stage for a financial crisis in the near term, the risks of one happening further ahead have risen. Collateralised loan obligations (CLOs) are securitisation vehicles that hold …
While policy loosening has caused a marked easing of financial conditions around the world, lending growth is still quite subdued. We doubt that this will change, particularly since demand for loans is now weakening again. This is another reason to expect …
14th November 2019
More EMs’ income levels have fallen relative to the US’s than have risen this year, the first time this has happened since the 1990s. This is likely to be a sign of things to come in the 2020s. There are lots of ways of defining catch-up growth, but our …
13th November 2019
While the Fed seems to have pressed pause, we wouldn’t rule out a December cut. Policy will be loosened further in the euro-zone, Australia and several EMs. But the impact will be modest, particularly in advanced economies. Following a wholesale shift …
11th November 2019
Given Q3 national accounts data from early-reporting countries and monthly data from other economies, it looks like world GDP growth actually picked up a touch last quarter to just over 3% annualised. And there have been some encouraging signs about the …
8th November 2019
Manufacturing PMIs for October suggest that global industry remained weak at the start of Q4. However, we take some comfort from the fact that, at the world level, the surveys have stopped deteriorating. The release of Markit’s global manufacturing PMI …
1st November 2019
Globalisation has peaked. It may stall over the next decade, but a period of de-globalisation is increasingly likely. If this is driven by new technologies, it will not be bad for the world economy. But it could take a more malign, policy-driven, form. If …
29th October 2019
After a jump in July, world trade volumes rose again in August. But this is unlikely to be the start of a material recovery – indeed, most indicators point to subdued trade growth in the closing months of 2019. Recent data published by the CPB Netherlands …
28th October 2019
Flash PMIs for October indicate that underlying momentum in advanced economies has continued to weaken at the start of Q4. The weighted average of the US, euro-zone and Japan composite PMIs imply that the index for developed markets as a whole fell in …
24th October 2019
This Briefing is a reference guide with our latest views and forecasts for the US economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … United …
22nd October 2019
While the downside risks of a global trade war are often overstated, we think the bigger concern is that the world splits into competing regional blocs that do not cooperate on trade or investment. This could cause global supply chains to splinter and …
Given the widespread use of the US dollar in international trade and finance, policymakers outside the US have suggested that the dollar’s appreciation is partly to blame for the slowdown in the world economy. While US exchange rate moves do exert …
21st October 2019
This Update analyses the key Brexit events in British Parliament this week and highlights at what point we would be able to conclude that a Brexit deal is either done or dead. As such, the next week or so will be pivotal in determining whether the pound …
Upcoming state elections could help determine the pace of economic reform in India over the coming years. A win for the BJP in Haryana could provide reassurance for state assemblies elsewhere that contentious reforms need not be electorally unpopular. …
18th October 2019
Table of Key Forecasts Global Overview – Growth has not yet reached a bottom and we expect weakness in advanced economies to drive a further slowdown around the turn of the year. Widespread monetary policy loosening is already underway and we think that …
17th October 2019
Globalisation has peaked, with any further major integration is unlikely. In fact, a policy-driven period of de-globalisation is increasingly likely. Flows of trade and foreign direct investment have flattened off as a share of nominal GDP over the past …
15th October 2019
We estimate that the current wave of globalisation is responsible for around a third of the pick-up in global per capita income growth since 1990. Almost all of that reflects an improvement in productivity growth in emerging economies. For advanced …
10th October 2019
Available data suggest that world GDP growth was stable at around 3% annualised in Q3, which is below the ten-year average of 3.5% but stronger than the 2.5% pace recorded in the second half of last year. (See Chart 1.) Growth looks to have accelerated in …
History shows that waves of globalisation are driven by both technology and policy, but protectionist shifts alone tend to end them. In some cases, like in the 1970s, a moderate pushback by policymakers can cause globalisation to stall. But the experience …
8th October 2019
The global manufacturing PMI picked up again in September, but this was largely due to a jump in China’s index that we don’t think will be sustained. While it is still too early to call time on the downturn in global industry, it is at least of some …
1st October 2019
While world trade volumes rebounded in July, they only recovered ground lost the previous month. The big picture is that world trade is set to remain weak in the coming months as the global industrial downturn drags on. Data published this week by the CPB …
27th September 2019
With interest rates near the lower bound, central banks are experimenting with tiers. But they reduce the impact of rate cuts and do little to support banks’ profitability. Such efforts add to signs that monetary policy is near its limits. Recent weeks …
26th September 2019
Flash PMIs for September suggest that advanced economies ended Q3 on a weak footing. The surveys also point to weaker exports, jobs growth and core inflation. The fall in the euro-zone composite PMI, to a 75-month low, indicates that the economy almost …
24th September 2019
The ruling by the Supreme Court in the UK that the Prime Minister’s decision to prorogue Parliament was “unlawful, void and of no effect” and that the suspension should be “quashed” as soon as possible increases the chances of a delay to Brexit and …
Since securing re-election this year, the Modi government has made it a formal aim to almost double the size of India’s economy to US$5trn by March 2025. In our view, the government is likely to fall short of this lofty ambition. Even so, we think that …
23rd September 2019
Table of Key Forecasts Overview – Inflation has fallen in most economies, due partly to lower energy inflation. Our forecast that oil prices will stabilise in the months ahead is subject to upside risks from tensions in the Middle East. But against the …
20th September 2019
The attack on Saudi oil is unlikely to be a disaster for the global economy. Saudi production might resume quite quickly and even if it doesn’t, the implications for oil prices and developed economy inflation should be limited. But growing tensions in the …
16th September 2019
Consumer spending continues to be a relative bright spot in the global economy. Spending growth picked up to a healthy 2.9% quarterly annualised in the advanced economies in Q2 (see Chart 1), reflecting marked improvements in the US and Japan. But the …
12th September 2019
Negative policy rates have had some positive effects in the economies where they apply and the direct adverse consequences have been small. But the policy has contributed to a fall in long-term interest rates which is doing greater damage to banks’ …
5th September 2019