India’s economy continues to show resilience this year and annual GDP growth is likely to come in stronger than the 6.3% we had been forecasting. While inflation is well within the RBI’s tolerance range, the renewed surge in food prices in November is a …
23rd November 2023
A year of the most aggressive monetary tightening in a generation is expected to end with the major DM banks leaving rates on hold at their December meetings. Following our briefings on the world in 2024 , our senior economists will be held a special …
Our Emerging Europe Chart Pack has been updated with the latest data and our analysis of recent developments. Russia and Turkey had a strong first half to the year, but large policy tightening is likely to result in slower growth in 2024. Inflation will …
The South African Reserve Bank opted against responding to last month’s larger-than-expected rise in inflation with an interest rate hike, leaving the repo rate unchanged at 8.25% today. But officials continued to strike a hawkish tone and it looks like …
Europe Commercial Property Valuation Monitor (Q4 2023) …
This page has been updated with additional analysis since first publication . High services inflation will stop Banxico from cutting for now Mexico’s mid-month inflation reading of 4.3% y/y in November provides signs that the disinflation process is …
Despite the Riksbank Executive Board insisting that it might raise interest rates again in the coming months, we would be very surprised if it does so. Instead, we think the next move will be a rate cut next May, and expect the Bank to then cut rates …
CBRT delivers another large hike, end of tightening in sight Turkey’s central bank (CBRT) delivered another 500bp interest rate hike, to 40.0%, at today’s meeting and suggested that it is very close to the end of the tightening cycle. A final 250bp hike …
This page has been updated with additional analysis since first publication. PMIs consistent with continued recession Despite the rise in the euro-zone Composite PMI in November, it remained consistent with the economy contracting 0.2% in Q4. (See Chart …
This page has been updated with additional analysis since first publication. Something for everyone, but bigger point is labour supply is too low The net migration figures for the year to June 2023 give some ammunition to both sides of the political …
Riksbank peaks at 4% The Riksbank’s decision to leave interest rates on hold at 4.0% today was not a major surprise given that financial markets were pricing in only a 10% chance of a hike while economists were evenly split between a hike and a hold. (We …
This page has been updated with additional analysis since first publication. Sticky price pressures will add to the Bank of England’s unease The rise in the flash composite activity PMI, from 48.7 in October to 50.1 in November, is still consistent with a …
BI on hold, end of the tightening cycle Bank Indonesia today left interest rates unchanged and the comments from the press conference suggest this marks the end of the tightening cycle. With growth likely to struggle and inflation set to remain weak, …
While subdued capital spending has contributed to the slump in productivity, the recent plunge in the capital/labour ratio can only partly be explained by the surge in net migration. It is now a well-documented fact that Australia’s labour productivity …
The net giveaway the Chancellor announced in the Autumn Statement is designed to curry favour ahead of an election late in 2024. However, fiscal policy is still being tightened in 2024/25 and it looks as though whoever wins the election will have to …
22nd November 2023
Coal prices in both Europe and Asia will fall next year as growth in demand eases. But the fall in Europe should be larger as we expect demand there to outright contract. This should ensure that coal prices in Asia trade at a premium to prices in Europe …
Post-SVB bank lending holding up well Credit where credit is due The SVB crisis back in mid-March sparked fears of a credit crunch, particularly among regional banks who are the principal source of funding for commercial real estate. Post-SVB, while the …
We think investor enthusiasm about AI could yet boost equity prices further. Boardroom drama at OpenAI – one of the most well-known AI research companies – has been in the news this week, after the CEO was unexpectedly removed from his role, only to …
The Israeli government’s budget deficit is widening sharply and we think it will breach 5% of GDP next year. Provided the length of the war and the increase in the deficit are short-lived, we don’t think this will cause funding problems and the …
Fiscal risks in Latin America have largely been out of the spotlight over the past year, but we think that public debt concerns will build over the coming years. Sovereign defaults seem more likely than not over the next few years in a handful of …
China steel output should fall some more The monthly fall in China’s steel production should continue over the next two months, but the outlook is a little brighter in 2024. Elsewhere, production rose in October, and India’s production in particular …
Equipment investment continues to struggle Aside from the plunge in the volatile transport component, the October durable goods orders data suggest that business equipment investment continues to struggle in the fourth quarter. The 5.4% m/m plunge in …
US equities’ outperformance this year is due almost entirely to the few industries that include “Big Tech” firms, as the rest of the US stock market fared similarly to equities in the rest of the world. While we expect a broader stock market rally next …
For more detailed analysis of the Autumn Statement, see our UK Economics Focus here . Chancellor chips away at fiscal tightening ahead of an election The net new giveaway the Chancellor announced today of £14.3bn in 2024/25 (0.5% of GDP) is a bit bigger …
Chief Property Economist Andrew Burrell and Andrew Wishart , who leads our UK housing coverage, held a client briefing shortly after the release of the November Nationwide House Price Index for a discussion all about what to expect from the UK market …
We continue to forecast a small fall in euro-zone yield spreads over Bunds in the next year or so. However, rising risks to the upside in recent months and differences in fiscal positions between countries may mean that the relative picture for some …
This page has been updated with additional analysis since first publication. Consumption bouncing back The batch of Polish activity data for October provide clearer signs that the economy has turned a corner and that a recovery is taking hold, driven by …
One year into his premiership, Anwar Ibrahim has made very limited progress on his key reform objectives. Given his weak position in parliament, we don’t anticipate this will change anytime soon, and we remain downbeat on the country’s medium-term …
Inflation rises, but SARB will take comfort from weaker core pressures The larger-than-expected rise in South Africa’s headline inflation rate, to 5.9% y/y in October, is likely to reinforce central bank policymakers’ hawkish rhetoric when they meet …
Economic growth in Singapore rebounded strongly in the third quarter of the year, but we don’t expect this strength to last. A combination of weaker global demand and high interest rates will cause growth to slow over the next couple of quarters. The …
Recession still looking likely and labour market weakening as expected Bank will probably signal that inflation will return to 2% target earlier than thought Quicker disinflation opens the door to rate cuts in the second half of next year The labour …
Faced with much higher interest costs, Finance Minister Chrystia Freeland outlined very little in the way of new spending measures in the Fall Economic Statement today. Most of the focus was on non-monetary housing-related policies that will have little …
21st November 2023
Fed offers something for everyone There is something for everyone in the minutes of the Fed’s early November policy meeting. The FOMC still just about maintained a tightening bias, but the overwhelming impression is that officials thought rates had …
A team of our senior economists recently held a special online briefing all about the key economic themes which will shape 2024. The team discussed risks across developed and emerging economies, and outlined our views on how growth, inflation and …
The EU’s criticism of French fiscal policy is not in itself a major concern. But France’s debt-to-GDP ratio may well rise over time rather than declining as the government intends. The key problem is a very large primary deficit which the government plans …
Overview – Housing market activity is likely to recover from here, driven by falling mortgage rates. That said, they are set to remain high relative to recent history. Our view is that mortgage rates won’t drop below 6.0% before the end of the forecast, …
Brazil and Mexico will outperform others in the region this year, but that’s likely to flip on its head in 2024 as they slow – and by more than most expect – while the Andean economies recover. Rapid wage growth will keep inflation above target for some …
Overview – Surprisingly resilient demand, high inflation, and limited supply mean a severe drop in house prices will be avoided. With the peak in mortgage rates now behind us and the labour market in good shape, there is no clear trigger for another …
The economy’s third-quarter strength was not the start of a renewed acceleration and we continue to expect GDP growth to weaken. Regardless, resilient economic growth has not prevented a continued easing in wage and price inflation, and we still think the …
Spike in rates takes sales to fresh 13-year low Existing home sales fell sharply to a fresh 13-year low in October as the 8% peak in mortgage rates in the same month caused buyers and sellers to withdraw from the market. Mortgage applications for home …
The fall in US Treasury yields has driven rebounds in the yen and renminbi against the US dollar, and we expect this trend to continue through at least the next year or so. Amid the rally in “risky” assets over the past week, gains in FX markets against …
This page has been updated with additional analysis since first publication. Core inflation pressures muted There was good news all round in the October CPI report, with the overall CPI falling in month-on-month seasonally adjusted terms for the first …
Emerging Markets Chart Pack (November 2023) …
Sticking to aggressive easing ... for now The Hungarian central bank (MNB) cut its base rate by another 75bp (to 11.50%) as expected today, and we think it will continue to lower rates in similar steps until the end of Q1. That said, with the disinflation …
Shifts in the long-term outlook for interest rates relative to GDP growth have left the fiscal position in most developed economies looking more precarious. Unless governments manage to reduce their sizeable primary deficits, market concerns about public …
Key insights from our new CE Climate Reporting Tools …
Note: We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. This page has been updated with additional analysis since first …
We are doubtful that the recent strength of consumption is because real incomes are being understated, as some have suggested. It is more likely that so-called “excess savings” were previously underestimated, but even the latest estimates imply those …
20th November 2023
Since early 2020 there has been a clear divergence in performance between data centers and the traditional commercial real estate sectors. Looking forward, we expect the hyperscale sub-sector will continue to outperform off the back of growing cloud …
