Global Economics Update Services get pummelled in March; worse is to come The March Flash PMIs for advanced economies were dreadful. The composite PMI for DMs plummeted to a level just shy of its all-time low. With the lockdowns only getting underway, worse will come in... 24th March 2020 · 3 mins read
Global Economics Update Financial conditions now as tight as during the GFC Financial conditions in advanced economies are now almost as tight as they were in 2009. So far, this has been the result of an economic shock rather than strains within the financial system itself... 23rd March 2020 · 5 mins read
Global Economics Update How to think about the long-term effects of the virus The immediate effects of the coronavirus on the global economy are becoming increasingly clear and point to a sharp fall in output across the world. Recession looms. The effects over the longer term... 19th March 2020 · 4 mins read
Global Economics Update Downturn now set to be deeper than the financial crisis What were downside risks to the global economy just a few days ago are fast morphing into our central scenario. We now expect global GDP to fall by about 1% this year, which would be twice the decline... 18th March 2020 · 3 mins read
Global Economics Update Will fiscal policy ride to the rescue? With central banks already having used up most of their ammunition, we are now reliant on governments to prevent the global recession from turning into something even worse. We are optimistic that the... 18th March 2020 · 4 mins read
Global Economics Update Slump in tourism to knock 0.7% off world growth Travel and tourism is clearly one of the hardest hit sectors in the coronavirus crisis. In a realistic scenario where travel and tourism dropped by 50% for six weeks, annual global GDP growth would be... 17th March 2020 · 4 mins read
Global Economics Update What more can policymakers do? There is much more that central banks could do to ease any strains that appear in financial markets. But with interest rates now more or less back to their effective lower bound in the US, euro-zone... 16th March 2020 · 4 mins read
Global Economics Update How much would school closures cost the economy? School closures are one of the main ways in which government attempts to manage the spread of the coronavirus will dent economic activity. While parents can work around the closures to some extent... 13th March 2020 · 5 mins read
Global Economics Update Can the virus be contained with little economic pain? Some countries have managed to control the new coronavirus without large-scale quarantines or economic shutdowns. But they have achieved this by preventing the virus from spreading within the... 11th March 2020 · 3 mins read
Global Economics Update From economic crisis to banking crisis? One of the few crumbs of comfort amid the turmoil in financial markets over recent days is that the global banking system does not appear to be in imminent danger. This reduces the risk that a severe... 11th March 2020 · 4 mins read
Global Economics Update Is the risk of deflation back? While the drop in oil prices will push inflation down in the near term, the bigger disinflationary risk could stem from the effect of the coronavirus on economic activity. Indeed, we said after the... 10th March 2020 · 3 mins read
Global Economics Update Oil price slump not a positive for global economy While falling oil prices have historically been deemed a net positive for global demand, there are several reasons to think that the latest slump will only add to the immediate headwinds facing the... 9th March 2020 · 3 mins read
Global Economics Update How bad could the coronavirus hit get? Given the uncertainty about how the coronavirus will evolve, and how governments will respond, it is easy to envisage ways in which the hit to global GDP will be larger than the 1%-pt we have now... 4th March 2020 · 6 mins read
Global Economics Update G7 leaves door open to rate cuts, but no promises Today’s G7 statement about likely measures to tackle the effects of the coronavirus fell short of hopes of a major coordinated policy response. This raises the risk that central banks will disappoint... 3rd March 2020 · 2 mins read
Global Economics Update Policymakers in DMs to respond to coronavirus risks It is now likely that the central banks of major developed markets (DMs) will follow Australia in loosening monetary policy to help their economies weather the impact of the coronavirus. But there is... 3rd March 2020 · 4 mins read
