Filtered by Subscriptions: Global Economics Use setting Global Economics
Mobility data have weakened in many parts of the world in recent weeks as virus numbers either remain high or continue to climb, risking restrictions staying in place for even longer. The latest data out of Israel suggest that its speedy vaccine rollout …
9th April 2021
While Asian goods exports have fared better than those from the rest of the world and especially those from advanced economies over the past year, this performance gap should narrow as economies reopen. Global goods trade continued its strong recovery at …
8th April 2021
The rise in March’s global manufacturing PMI suggested that world industrial production continued to recover. But the headline index masked a divergence at the country level, with sizeable gains in advanced economies offsetting small falls in major EMs. …
1st April 2021
Mandates have spread into equality, climate change and house prices in recent months Implications are mixed; Fed lower for longer, but RBNZ may need to hike sooner On average, mission creep points to more variable and probably higher future inflation …
29th March 2021
Data from the CPB Netherlands Bureau suggested that world trade had shrugged off rising shipping costs up to January, with real goods trade rising by 2.5% m/m. The outlook is broadly positive. But if the grounding of the huge container ship in the Suez …
25th March 2021
March’s advanced economy PMIs painted a positive picture, with headline indices typically now well into expansionary territory. Supply shortages are boosting prices and constraining output to some extent, especially in the US. And the euro-zone PMI is …
24th March 2021
Our Mobility Trackers suggest that the recent rise in coronavirus infections and associated restrictions are weighing on activity in Latin America, emerging Europe and the euro-zone. In contrast, mobility in the US has continued to recover as restrictions …
23rd March 2021
Table of Key Forecasts Overview – Inflation will rise sharply in every major economy in the months ahead, driven by a rebound in energy inflation, tax changes, and supply shortages. On average, CPI inflation in the advanced economies looks set to rise …
19th March 2021
The recent pick-up in consumer spending in DMs has been characterised by a sharp rise in spending on goods. The next leg of the recovery will be focused on services as restrictions are removed. Spending on consumer goods is likely to slow, implying weaker …
17th March 2021
Both the hard data and more timely surveys imply that the major advanced economies have had a mixed start to the year. The US has fared particularly well, thanks to easing pandemic-related restrictions and strong fiscal stimulus. Most notably, $600 …
11th March 2021
The global semiconductor shortage appears to be largely the result of a strong revival in demand for goods including consumer electronics rather than pandemic-related supply disruptions. It should generally have limited implications for GDP, but it could …
9th March 2021
While it is still early days, the ingredients for a sustained pick-up in inflation over the next few years seem to be falling into place in the US. It is a different picture in other developed economies; indeed, we still think that medium-term inflation …
2nd March 2021
February’s global manufacturing PMI survey painted a positive picture, implying that output growth has continued to accelerate outside China and that employment is picking up. Supply shortages are boosting input prices, especially in DMs, but this …
1st March 2021
While the latest signs are that capacity constraints in global shipping are continuing to bite, we expect these to subside over the course of the year. Indeed, as vaccine rollouts allow economies to reopen, the pace of the recovery in goods trade should …
26th February 2021
If passed in full, President Biden’s $1.9tn American Rescue Plan would constitute a fiscal stimulus worth 1.4% of global GDP, coming hot off the heels of the $900bn deal struck in December. While a boon for the US economy, we think that the economic …
24th February 2021
With vaccines improving the economic outlook and labour market data surprising to the upside, we have revised down our unemployment forecasts for almost all major economies. But wider measures of labour market slack imply a growing divergence by region. …
23rd February 2021
The batch of flash PMIs for February suggest that shipping constraints and some goods shortages are raising costs for manufacturers. There are some signs that these cost pressures are being passed on to consumers. Outside of the US, price pressures in …
19th February 2021
Taken alone, prolonged restrictions on international travel would do little to hinder the global recovery since overseas tourism is a small share of world GDP and some of the lost spending would be made up. But the aggregate masks a wide range of effects. …
18th February 2021
While new COVID-19 infections have dropped, our Mobility Trackers have shown only a slight pick-up in activity as tight restrictions remain in place in many economies. Vaccine rollouts have been slow in the euro-zone and most EMs, but much faster in the …
One legacy of the pandemic is a huge expansion in central banks’ balance sheets. Fears that this will automatically boost inflation are overdone. So, too, are worries that central banks will provoke a destabilising rise in bond yields by selling their …
17th February 2021
When analysing the effect of COVID-19 on business balance sheets, most attention is given to the surge in debt. But this ignores the fact that non-financial firms in DMs have built up a pile of excess cash worth $1.6tn (4% of GDP), so their balance sheets …
10th February 2021
Global growth slowed throughout the fourth quarter and most economies entered the new year on a weak footing. We have limited hard data for 2021 so far, but timely surveys and our high-frequency Mobility Trackers are generally consistent with a further …
One threat to economic recoveries this year is that governments withdraw their generous fiscal support too quickly. So far, that threat does not seem to be an imminent one. That said, the level of fiscal support is set to remain more generous in the US …
9th February 2021
Taper talk is premature and purchases typically won’t slow until next year There is absolutely no rush for central banks to shrink their balance sheets But when they do, the process will require some creative thinking Talk of tapering in recent weeks has …
4th February 2021
Despite some dire public health situations, GDP outturns from the raft of recently released data have surprised on the upside in Q4. While some of the strength was due to industrial and construction sectors, the surprise lay in the resilience of some …
3rd February 2021
The volatility caused by retail investors co-ordinated on the r/Wallstreetbets forum does not pose a direct threat to the global economy, but it does illustrate some of the financial vulnerabilities that can stem from ultra-loose monetary and fiscal …
1st February 2021
The global manufacturing PMI survey for January suggests that the industrial recovery lost a bit of steam at the start of the year. It also provided some evidence that, in addition to lengthening supplier delivery times, supply-chain disruptions and …
In this Update , we take stock of the key elections that are scheduled around the world in the coming year and discuss the implications for economic policy. While elections in advanced economies are unlikely to produce any decisive changes in direction, …
We expect household incomes to rise in most countries this year as easing restrictions allow people to get back to work. The outlook for incomes is brightest in North America, particularly given the likelihood of further fiscal transfers in the US. But …
28th January 2021
Another increase in world trade in November meant that it exceeded its pre-pandemic level, though exports remained depressed in the US and emerging Europe. Since November, container freight rates have surged, reflecting shipping supply struggling to cope …
26th January 2021
The flash PMIs for January suggest that the US economy shrugged off containment measures at the start of 2021, but that restrictions did indeed weigh on activity elsewhere in DMs. The surveys also provide some evidence that supply shortages are exerting …
22nd January 2021
The surge in global shipping costs over the past six months is likely to be short-lived and several factors will dampen the full pass-through to consumer prices. Even so, it adds to a growing list of developments that point to a rise in inflation over the …
19th January 2021
Our COVID Mobility Trackers indicate that activity weakened towards the end of Q4, and data up to mid-January suggest that it took another leg down at the start of 2021. With countries still in the early stages of their vaccination rollouts, we are …
18th January 2021
Advanced economy headline inflation rates are set to jump by an average of nearly 2%-pts in the coming months as energy inflation picks up and, in some cases, the effects of last year’s temporary cuts in VAT cuts go into reverse. But with core inflation …
15th January 2021
Our GDP forecasts for this year sit some way above the rest of the market. The greatest risks to this upbeat view stem from unanticipated shifts in the virus and the fight against it, rather than the more orthodox macro events that typically derail …
13th January 2021
While the economic fallout will not be as severe as it was with the first lockdowns, the surge in virus cases will weigh on activity in Q1. Vaccine rollouts should provide a boost to the global recovery, but not until the second half of the year. …
12th January 2021
The risks to vaccination programmes fall into three groups: procurement, deployment, and effectiveness. In the coming few months, deployment issues will be a key limiting factor in most countries. These should be overcome relatively quickly in DMs, but …
8th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
5th January 2021
Developments from the past two weeks reinforce the message that 2021 will be a year of two halves for the world economy. In the near term, high/rising infections in most major economies mean that restrictions will be tightened or kept in place for longer, …
4th January 2021
The relative resilience of real global merchandise trade during the pandemic has reflected several factors, most importantly robust goods spending in advanced economies. Merchandise trade flows are likely to flatten off next year as the removal of …
23rd December 2020
Table of Key Forecasts Overview – Energy price base effects will drive up inflation in the first half of 2021, but central banks will look through this. Indeed, in most cases, inflation should be around or below target over the second half of 2021 and …
17th December 2020
We expect 2021 to be a better year for the global economy than most envisage. GDP growth in many major economies will surprise on the upside, with those that suffered the sharpest downturns this year generally rebounding fastest. Nonetheless, policy …
December’s flash PMIs revealed that restrictions in the euro-zone and the UK continue to weigh on services activity and that advanced economy manufacturing is still faring well. Meanwhile, building price pressures in the US point to inflation there rising …
16th December 2020
One of the biggest upside risks to our forecasts is that households spend the extra savings that they have accumulated during the past few months. If they do, North America and the UK look likely to benefit more than the euro-zone. Chart 1 shows that …
11th December 2020
Recent data confirm that global economic activity has continued to recover from the height of coronavirus restrictions in Q2. But while activity in China is now above its pre-virus level, there is still a major shortfall in other economies, including …
10th December 2020
In Q3, the balance sheets of developed market banks were in good shape and credit losses stayed ultra-low. Defaults are likely to rise as policy support recedes, but we think the banks are well-placed to cope. Most banks in the US, Japan, and developed …
3rd December 2020
The global manufacturing PMI rose for the seventh consecutive month in November. Restrictions seem to have weighed on industry in parts of Europe, but nowhere near as much as in March and April. And with recoveries elsewhere still strong, global …
1st December 2020
While world GDP was probably still about 3% short of its end-2019 level at the end of Q3, world trade had recovered to 1.5% below its pre-virus peak. As long as industry remains relatively unscathed by renewed restrictions in Europe and the US, trade …
30th November 2020
While a difficult few months lie ahead for many economies, the news of effective vaccines has led us to revise up our world GDP growth forecast by 0.8%-pt and 0.5%-pt, to 6.8% and 4.6%, in 2021 and 2022. The positive effects will be biggest in DMs, while …
27th November 2020
Central banks keen to bridge a difficult period before vaccines are rolled out… … and reduced fiscal stimulus shifts onus of supporting recovery to monetary policy The legacy of the virus will warrant rock bottom interest rates for several years The …
25th November 2020