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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 …
22nd October 2019
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
The small uptick in the global manufacturing PMI in August offers little comfort about the state of the world economy. The index still points to very weak global production growth, the downturn in the US is deepening and the future output indices have …
3rd September 2019
The Prime Minister’s decision to suspend Parliament from sometime in the second week of September until 14 th October increases the downside risks to the British economy and the pound by decreasing the chances of a further delay to Brexit and increasing …
28th August 2019
World trade volumes contracted again in the second quarter, and forward-looking indicators suggest that trade growth is likely to stay subdued, just as the US-China trade war is heating up again. Data published last week by the CPB Netherlands Bureau …
27th August 2019
PMI surveys for August imply that growth in advanced economies has slowed further in the third quarter. But one crumb of comfort is that the weakness in manufacturing has not yet weighed much on services. Markit’s flash composite PMIs, published today, …
22nd August 2019
The current global economic slowdown may descend into something more serious if manufacturing drags services down with it. Fortunately, there are reasons to think that the spillovers from the industrial slump will continue to be limited, at least during …
21st August 2019
Inverted yield curves in the US and elsewhere tell us very little about the timing of future downturns and, for now at least, the economic data are more consistent with a slowdown than a downturn in the world economy. That said, there are clear risks to …
15th August 2019
We’re comfortable with our below-consensus forecast for global growth but, for now, the increasingly gloomy view priced into bond markets seems difficult to square with the latest economic data . Regular readers will know that we’ve been among the most …
8th August 2019
Sentiment regarding the near-term prospects for the global economy has soured over the past week or two, triggered in part by the escalation of the US-China trade war. Indeed, there are increasing signs – such as the slowdown in investment growth in many …
While the recent escalation of the US-China trade war may have occurred a bit earlier than even we had anticipated, it fits with our below-consensus forecast for global growth this year and next. What’s more, it reinforces our view that the direction of …
6th August 2019
China is left with few good options to hit back at the US in ways that wouldn’t be self-defeating. Rather than direct retaliation, officials are therefore likely to focus their efforts on broader measures to offset the drag from US tariffs, including …
The further fall in Markit’s global manufacturing PMI in July adds to the evidence that industry remained in the doldrums at the start of the third quarter, with forward-looking components suggesting that a recovery is unlikely anytime soon . The global …
1st August 2019
May’s small rise in world trade volumes added to evidence that trade growth may have begun to stabilise following the slump that began in Q4 last year. But we see little sign of a recovery coming any time soon. Data published yesterday by the CPB …
26th July 2019
Advanced economy PMI surveys for July revealed that the relatively resilient services sector struggled to support growth, as the industrial downturn deepened. And the latest results of the Global Business Outlook surveys support our view that the slowdown …
24th July 2019
The IMF has revised down its global growth forecasts, but they are still much stronger than our own. Its forecasts for advanced economies look particularly optimistic and we think that the changing monetary policy stance will take longer to bear fruit …
23rd July 2019
Table of Key Forecasts Global Overview – We see world GDP growth slowing further as the US succumbs to the weakness which is already evident elsewhere. The downturn in global manufacturing is spreading to the services sector and labour markets are also …
19th July 2019
Several timely economic indicators have lurched down recently, suggesting that even our below-consensus global growth forecasts might be too optimistic. But some are not as reliable as is often assumed while others paint a more encouraging picture. …
16th July 2019
Lagarde selection strengthens our conviction of ECB rate cuts and QE to come. Trump’s nominations may be less influential, but lend policy a dovish tilt. Next year’s change of guard at the Bank of England could be meaningful. Recent news about a number of …
11th July 2019
The global industrial downturn so far has been fairly broad-based, but cars have fared particularly badly. While some temporary factors have been to blame, the longer-term drivers of the slowdown point to prolonged weakness in the auto sector. Needless to …
10th July 2019
8th July 2019
The past month has brought evidence of a continued slowdown in global growth and this weakness now seems to be spreading to labour markets. While advanced economy employment growth held up very well during the initial stages of the slowdown, it has now …
5th July 2019
The continued broad-based decline in the global manufacturing PMI in June appears to confirm that the industrial malaise worsened in the second quarter . The global manufacturing PMI, published today, fell from 49.8 to 49.4, leaving it consistent with a …
1st July 2019
This report is only available as a PDF. Click to download. … Chief Economist's Note: Checking in on our key calls …
Facebook’s new currency, Libra, could be a significant step forward in reducing the cost of processing international transactions. However, it is very unlikely to become a widely-used global currency. Libra’s unveiling has inevitably invited comparisons …
28th June 2019
Given the recent economic slowdown, new Finance Minister Nirmala Sitharaman is likely to announce more accommodative tax and spending measures when she unveils the union budget for this fiscal year on 5 th July. Ms Sitharaman may choose to paper over the …
It seems likely that Presidents Trump and Xi will agree to another tariff ceasefire on the sidelines of this weekend’s G20 summit in Osaka, Japan. But given the differences between the two sides, we suspect that any truce will prove temporary. The …
27th June 2019
26th June 2019
After rounding off a weak first quarter, world trade volumes fell in April. As the global economy slows further, world trade growth is likely to be sluggish, almost irrespective of developments in the trade war. Data published today by the CPB Netherlands …
25th June 2019
This Briefing is a reference guide with our latest views and forecasts for China’s economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … …
PMI surveys for June imply that the slowdown in advanced economies worsened in the second quarter, as growth in the US dropped back towards the weak pace already experienced in the euro-zone and Japan. With price pressures easing too, the surveys support …
This report is only available as a PDF. Click to download. … Chief Economist's Note: Problems in Italy still bubbling under the surface …
Price pressures have weakened further against a backdrop of worsening prospects for the global economy. The recent fall in the oil price implies that energy effects will drag on headline inflation in the advanced economies over the coming months. …
20th June 2019
