Global Economics Update What primary balances are needed to stabilise debt ratios? Public sector debt to GDP ratios are going to rise sharply and, in most cases, governments can tolerate this. But to retain the faith of financial markets, they might still need to make sure that debt... 5th June 2020 · 5 mins read
Global Economics Update Euro-zone incomes will be hit harder than US On the face of it, the surge in unemployment in the US implies that households are being hit harder by the crisis than those in Europe. But much of this reflects differences in the way that furloughed... 3rd June 2020 · 5 mins read
Global Economics Update PMIs point to slow industrial recovery May’s PMIs offer evidence that the global industrial sector is now on the slow road to recovery. But with demand extremely weak, activity is still far below normal levels and price pressures have... 1st June 2020 · 2 mins read
Global Economics Update Another global wave of austerity seems unlikely Unlike the period after the global financial crisis, we doubt that we will see a widespread trend of austerity to reduce public sector debt ratios. Nonetheless, austerity will still be undertaken in a... 26th May 2020 · 7 mins read
Global Economics Update Debt monetisation: are we already there? On the face of it, it might look like major economies have not yet reached the stage of debt monetisation. Where central banks are buying government bonds, it is on the secondary market, is supposed... 22nd May 2020 · 7 mins read
Global Economics Update Past the worst, but gradual recovery only May’s Flash PMIs revealed a partial rebound, suggesting that the global economy is past the nadir. But, the recovery in advanced economies appeared slower than that in China, and the services sector... 21st May 2020 · 3 mins read
Global Economics Update The virus assumptions underlying our forecasts The future of the coronavirus and measures to contain it are highly uncertain and beyond economists’ expertise. Nonetheless, both will be important in determining the outlook for the global economy... 15th May 2020 · 4 mins read
Global Economics Update Interpreting business surveys in a crisis Our best guess is that business surveys, such as the PMIs, understated falls in activity in April and we suspect that the next batch of surveys, released as early as next week, will do so again in May... 14th May 2020 · 7 mins read
Global Economics Update CPI measurement problems dwarfed by other concerns The impact of the lockdowns on the ability of statisticians to collect price data means that measures of inflation will be less accurate than normal. However, this will probably have little impact on... 6th May 2020 · 4 mins read
Global Economics Update Industrial output to fall at double-digit pace Manufacturing PMIs for April fell sharply, but the way the surveys are constructed means that conditions may be even worse than the headline figures suggest. Indeed, the sub-components of the surveys... 4th May 2020 · 2 mins read
Global Economics Update House prices to fall, but not crash Unlike in previous downturns, residential property has not been the root cause this time. Even so, house prices will not escape this recession unscathed. If policy support proves effective, if... 29th April 2020 · 4 mins read
Emerging Markets Economics Update Which countries will take the longest to recover? While we expect to see a sharp rebound in global activity once coronavirus-related restrictions are eased, GDP in most economies will still be below its pre-crisis path even after two or three years... 29th April 2020 · 6 mins read
Global Economics Update It’s probably a lot worse than the PMIs suggest As expected, after a dreadful month in March, the Flash PMIs for advanced economies got a whole lot uglier in April. While we suspect that they are not picking up the full scale of the declines in... 23rd April 2020 · 3 mins read
Global Economics Update Second wave effects: less severe but longer lasting? Plans to ease containment measures have raised fears of a second wave of coronavirus to come. In some ways, the world economy would be better prepared to deal with it. But the development of testing... 22nd April 2020 · 5 mins read
Global Economics Update Preventing layoffs won’t stop income squeeze Many countries have now announced wage-subsidy programmes to prevent widespread layoffs. Household incomes will still be severely squeezed by pay cuts. Nonetheless, limiting the rise in unemployment... 20th April 2020 · 4 mins read
Global Economics Update Modelling the shock to OECD household spending The early evidence suggests that household consumption in OECD economies may not have collapsed by as much as many fear in March. But as the boost from food stockpiling fades, overall consumer... 17th April 2020 · 4 mins read
