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There is no doubt that world trade growth has slowed sharply this year. However, we are wary of reading too much into the latest slump in trade. Exports from and imports to advanced economies have held up well, and there are tentative signs that overall …
8th December 2015
The world looks in good shape to cope with the tightening in US monetary policy which we think will, finally, begin later this month. The November Employment Report confirmed that the US economy is still recovering, despite the pain being inflicted on the …
4th December 2015
Manufacturing PMIs suggest that global manufacturing growth remained steady in November, despite a sharp slowdown in the US. … Global Manufacturing PMI …
1st December 2015
The broad money supply is growing steadily and the growth of credit to nonfinancial companies has been recovering in recent months. With bond yields still very low and several central banks likely to loosen policy over the coming year, monetary conditions …
30th November 2015
After many delays we think the US Fed will – finally – raise rates in December. However, the global easing cycle is likely to continue next year,for several reasons. Underlying inflation in Japan and much of Europe is set to stay well below central bank …
26th November 2015
World trade growth remains frail largely as a result of the continued lacklustre performance of emerging economies. However, we don’t think this is an early sign of a widespread downturn in the global economy. … Weak EMs drag down global trade …
24th November 2015
Flash PMIs published today and yesterday suggest that manufacturing growth has continued at a moderate pace in advanced economies in November, notwithstanding the weakness of some emerging economies. … Flash Manufacturing PMIs …
This Update aims to provide some perspective on the recent slides in oil and copper prices and the new record lows for the Baltic Dry Index of global shipping costs. It includes a more positive view on the outlook for copper (and other industrial metals) …
20th November 2015
Advanced economies have proved resilient this year in the face of a slowdown in emerging markets (EMs). As it happens, we think EM growth is likely to recover, gradually, in the coming months. But even if it doesn’t, the fallout for the rest of the world …
The continued slide in the price of copper has added to concerns about global growth. However, the industrial metal’s track record at diagnosing the health of the world economy has actually been shaky for many years. Other, better indicators are now …
18th November 2015
While media headlines have focused on low energy prices and the risks of deflation, core inflation has actually risen in most advanced economies in recent months. However, it has done so for very different reasons; in the euro-zone and Japan, currency …
The annual G20 leaders’ summit, to be held in Turkey on 15-16 th November, should be less acrimonious than many previous gatherings. Tensions over exchange rate policy, global imbalances, fiscal and monetary policy have marred many previous summits, but …
13th November 2015
The renewed weakness in global commodity prices, notably oil and copper, is obviously a concern forproducers and will continue to constrain activity in the mining sector. However, the current pessimismlooks overdone. We still expect prices to recover …
The OECD’s warning yesterday that weak trade growth may herald an economic downturn is wide of the mark. Trade in goods has continued to grow in line with industrial output and the link between trade and economic growth is, in any case, not particularly …
10th November 2015
Although the addition of China’s currency to the SDR basket may provide a short-term boost for the renminbi, its appeal as a reserve asset will be constrained by lack of convertibility and liquidity and by concerns that China’s economy and markets are not …
6th November 2015
Concerns that a hard landing in China may tip the world into a fresh recession look increasingly wide of the mark. The latest business surveys and credit data suggest that China itself may be regaining some momentum. In the US, the strong dollar and low …
5th November 2015
Many commentators have suggested that the next global recession may be just around the corner. In contrast, our view is that the balance of risks to world growth this year and next now lies on the upside. This Update summarises six reasons why the …
Unemployment rates in the US, euro-zone, Japan, and UK are likely to continue falling gradually over the coming years. However, the prospects for wage growth in these four economies vary considerably. … What are the prospects for labour markets and …
4th November 2015
The final Markit manufacturing PMIs for October reinforce our view that global growth is holding up much better than many seem to fear. Indeed, the headline readings for the US, China, the euro-zone and Japan all rose compared to September. … Global …
2nd November 2015
Data released so far indicate that the world economy held up fairly well in Q3, contrary to widely-held fears of a sharp deceleration. What’s more, global growth is likely to strengthen over the coming year or so as China’s policy stimulus feeds through …
30th October 2015
Monetary conditions remain highly accommodative in most advanced economies, notwithstanding the rise in corporate bond yields since the beginning of the year. Meanwhile, broad monetary aggregates are expanding and private sector credit is rising at a …
28th October 2015
The US Fed now looks likely to leave interest rates unchanged until next March before tightening policy more rapidly than the markets anticipate. Many other major central banks, meanwhile, are still on track for further policy easing. In particular, ECB …
Preliminary PMIs published by Markit today suggest that activity in advanced economies picked up in October. Claims that the world economy is in the throes of a broad-based downturn are clearly overstated. … Flash Manufacturing PMIs …
23rd October 2015
The volume of world trade fell again in August, continuing its weak run this year. Exports from emerging economies have been particularly sluggish, although they have held up much better in volume terms than in values. … Advanced economy exports …
This week’s news that the ECB discussed cutting its deposit rate further below zero has revived discussion of the limits to, and effects of, negative interest rates. Their use by several European central banks shows that cutting rates below zero has a …
The collapse of oil prices since mid-2014 has exposed the huge variation in the public finances of the world’s major oil exporters. Poorly managed emerging economies such as Russia and Venezuela had no resources with which to cushion the blow whereas the …
22nd October 2015
The global recovery has slowed this year but is likely to accelerate again during the coming quarters. We expect world GDP growth to be only 2½% for 2015, using our own estimates for China, but to pick up to over 3% in both 2016 and 2017. China itself …
20th October 2015
Headline inflation fell below zero in a number of major economies in September, but we expect the latest bout of deflation to be short-lived. That said, the further drop in inflation expectations in Japan and the euro-zone over the past few months …
15th October 2015
We estimate that global GDP growth will slow to around 2½% this year, taking into account ourassessment of China’s actual growth rate. However, the world economy should recover in 2016 asactivity in China picks up and output in Brazil and Russia …
9th October 2015
Disappointing payrolls data from the US, weak commodity prices and another downbeat set of business surveys have fuelled fears that global growth is collapsing. However, we continue to think these worries are overdone. While some key emerging economies …
7th October 2015
The recent turbulence in equity markets has highlighted how vulnerable global investor sentiment is to developments in China, but the risks to the world economy are smaller than many assume. Although China’s growth has slowed sharply in recent years, we …
6th October 2015
The Trans-Pacific Partnership (TPP) agreement which was announced today may not see the light of day for some years. Assuming, however, that it is eventually implemented, it should have large and positive implications for global growth, albeit only over a …
5th October 2015
Many have argued that China’s attempts to prevent its currency from weakening conflict with its efforts to keep domestic monetary conditions loose. But China’s monetary indicators still point to a pick-up in economic growth. What’s more, there is little …
September’s final manufacturing PMIs suggest that the global economy expanded at a moderate pace in Q3. Indeed, although Markit’s global manufacturing PMI fell from 50.7 to 50.6 in September, it is still consistent, on the basis of past form, with world …
1st October 2015
The peak rate of interest in the next tightening cycle is likely to be lower than in the past. Indeed, we estimate that the so-called “neutral rate” is now only around 3% in the US and UK and substantially lower in the euro-zone and Japan. Partly for this …
28th September 2015
The volume of world trade, which has been sluggish all year, fell outright in July. The latest weakness has been concentrated in emerging economies, and Asia in particular, but exports from the US have also been falling in year-on-year terms. … Exporters …
23rd September 2015
Preliminary PMIs published by Markit today have added to concerns that China’s economy is slowing, but the latest activity data, which are more reliable, have been more encouraging. Meanwhile, growth is holding up well, for now, in the euro-zone. … Flash …
Many commentators, including the Bank of England’s Chief Economist, have suggested that the turmoil in emerging markets (EMs) over the last few months is just the latest phase of the global financial crisis that began in 2008. What’s more, as the full …
22nd September 2015
An increase in headline inflation is now “baked in the cake” for most economies. The effects of last year’s oil price slump are set to drop out of the annual comparison in the coming months and fears that a hard landing in China will tip the world economy …
15th September 2015
In the unlikely event that China’s growth rate collapses in the coming years, global growth would decline sharply simply because China accounts for such a large share of the world economy. But the knock-on effects on activity elsewhere would be smaller, …
11th September 2015
Fears about the health of the world economy have centred on China, but the bulk of the slowdown over the past year has actually been due to weaker growth in commodity exporters. The outlook varies by country, but these economies are likely to be less of a …
9th September 2015
We expect developed economies to weather the fallout from China’s August “devaluation” and the subsequent weakness in world equity markets quite well. Activity in the emerging world has slowed further and Brazil and Russia have slipped into recession. …
4th September 2015
The IMF’s call for central bankers to refrain from tightening policy may have fuelled fears that the world is on the brink of a major downturn. We think the picture is not so gloomy. Emerging economies have certainly slowed, but the major developed …
3rd September 2015
Final manufacturing PMIs for August suggest that the pace of global growth has held up fairly well, despite weaker activity in China. … Global Manufacturing PMI …
1st September 2015
The recent panic in global markets has been reflected in a wave of commentary to the effect that monetary policy has lost its power. We disagree. Central banks’ track record on inflation in advanced economies has not been as bad as the headlines might …
The latest monetary data suggest that the pace of growth in the major advanced economies remains solid. Global monetary conditions are likely to remain very loose over the coming years, which in turn should support activity. … Advanced economy credit …
The gyrations in equity and commodity markets have raised expectations that global monetary policy will remain looser for longer than previously expected, but we think that the fallout will actually be fairly modest. The People’s Bank of China may loosen …
28th August 2015
This report is only available as a PDF. Click to download. … Trade rebound suggests world economy is down but not out …
25th August 2015
Among the “flash” business surveys published today, the fall in China’s manufacturing PMI has, understandably, attracted the most headlines. However, surveys for the other major economies suggest that growth elsewhere is holding up fairly well. … Flash …
21st August 2015
Reports that the IMF has decided not to add the renminbi to the SDR basket until September 2016 at the earliest miss two more important points. First, China’s currency may not be added to the basket for several years; and second, SDR “membership” is much …
20th August 2015
