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The US recovery has gained momentum over the past month, but tentative signs of improvement elsewhere have already faded, as shown most clearly by the latest business surveys. The US looks set to pull further ahead of the other major economies in the …
12th March 2013
Average inflation in advanced economies was below 2% y/y in January and we expect it to decline further over the course of the year. Global demand should be fairly weak, not least due to the recession in the euro-zone. Falling oil prices and an …
7th March 2013
The latest business surveys suggest the pick-up in activity early this year has softened almost everywhere, except the US, as the PMIs dropped back in most advanced and emerging economies in February. … Recovery falters, except in the …
5th March 2013
Five years after the financial crisis, there is growing optimism that the world economy is finally on the mend. However, the deleveraging process is far from complete. Further public sector austerity is in store for most advanced economies while more …
28th February 2013
Today’s disappointing GDP figures published by the euro-zone and Japan for the fourth quarter of 2012 underline that, even if activity has picked up at the start of this year, it has done so from a very low base. We expect growth to remain weak and …
14th February 2013
Recent data underline that, other than in the US, very loose monetary policy is still not translating into faster credit growth. … Global Monetary Indicators …
13th February 2013
Next week’s G20 gathering in Moscow will be overshadowed by talk of currency wars. But in our view, competitive exchange rate devaluations do not pose a significant threat to the global recovery. … Talk of currency wars to dominate G20 …
8th February 2013
Business surveys suggest that global growth picked up towards the end of 2012 and in early 2013, although they are still consistent with relatively low growth by historical standards. Meanwhile, inflation in advanced economies continued to fall towards …
7th February 2013
Financial markets and many businesses have become more optimistic about the global economic outlook, but consumer confidence has typically remained weak. We expect households in the US and Europe in particular to become a bit more optimistic in the coming …
30th January 2013
Preliminary survey data for January suggest the recovery in Chinese manufacturing is continuing and activity is picking up in the US. They also suggest the euro-zone recession may be easing, for now at least. … Business surveys point to positive start …
24th January 2013
The world economy is likely to grow at a similar pace this year as in 2012. Some downside risks have diminished, at least for now, including the threat of euro break-up, the US fiscal cliff and a “hard landing” in China. But even if the euro-zone holds …
15th January 2013
2013 has begun with more optimism about prospects for the global economy. The latest survey evidence suggests many countries ended 2012 with greater momentum than they had a few months earlier, but we doubt that this positive mood will last. … Is the New …
8th January 2013
We expect the major central banks to persist with ultra-loose monetary policy for at least two more years but inflation to remain at historically low levels. This is largely because global demand is likely to stay weak due to a combination of fiscal …
19th December 2012
Recent proposed changes to the monetary policy framework in several countries may signal slightly greater tolerance for inflation. But they do not mean the authorities are relaxing their grip on price stability. Far from being about to take off, we expect …
If it were not for the euro-zone crisis, world economic growth would probably gather pace next year. Prospects for the US are brightening, there has been significant progress with private sector deleveraging and we think oil prices are more likely to fall …
10th December 2012
Some commentators argue that the recent build-up of non-financial corporations’ liquid assets in many countries is impeding business investment. However, the rise in cash balances dates back a couple of decades and does not appear to be closely related to …
5th December 2012
The global manufacturing PMI rose in November as conditions improved in China and the rate of contraction slowed in much of Europe. But the latest reading still points to weak global growth, large regional divergences and continued recession in Japan and …
3rd December 2012
Some commentators argue that growth of world per capita income over the coming few decades will be much lower than in the past, because technological progress has slowed or because of the depletion of natural resources or the effects of climate change. We …
22nd November 2012
World GDP recovered a bit in Q3 after a very weak second quarter. Looking forward, growth is set to strengthen a little in China and remain steady in the US. But this should be offset by continued recession in Japan and a much steeper contraction in the …
15th November 2012
The public disagreement between the IMF and euro-zone reveals underlying tensions over whether core euro-zone governments will accept haircuts on their share of Greece’s public debt and concern among the IMF’s non-European shareholders that it is pumping …
14th November 2012
Even when the dust finally settles from the global financial crisis, we doubt that the world will return to the high growth rates achieved before 2008. Slower expansion of the labour force, the lingering effects of the crisis itself and the problems in …
9th November 2012
Business surveys for October suggest the global recovery began the fourth quarter at the same subdued pace it recorded in the summer. They also suggest that the US and euro-zone economies continued to diverge, Japan remained in recession and China is …
6th November 2012
The jump in grains prices due to the exceptionally hot summer in the US still feeds headlines warning of another global food price shock similar to that in 2007-08. More recently, the spectre of agricultural export bans has reappeared too. But the true …
29th October 2012
We expect the euro-zone to experience a deep recession next year but the US to grow steadily, reflecting the region-specific nature of the crisis in Europe, improving fundamentals in the US and the fact that some form of break-up of the euro-zone would …
24th October 2012
The global recovery has slowed once more and growth is likely to remain subdued for at least another year. Admittedly, prospects for the US are relatively bright, but this is not sufficient to offset mounting problems elsewhere. Expectations of stronger …
22nd October 2012
Whether or not you believe the IMF’s new estimates of the fiscal multiplier, budget cuts are due to intensify in advanced economies next year and will last longer than many had expected. … No end in sight for global …
12th October 2012
Finance ministers and central bankers from the G7 meet tomorrow in Tokyo ahead of the annual gathering of the IMF and the World Bank there, which concludes on Sunday. Although these meetings can very occasionally spring a surprise, there does not appear …
10th October 2012
The IMF has reduced its projection for global growth this year yet again, and is now getting close to the 3% forecast which we have stuck to since January. However, while the IMF has also reduced its forecast for next year, we believe it is still …
9th October 2012
The world’s current account imbalances have narrowed since 2008 as a result of the downturn in the US and the surge in investment in China. However, we think they will widen again in the medium term, as China’s share of world output rises and its …
3rd October 2012
The latest purchasing managers’ surveys suggests global manufacturing conditions improved a little in September relative to August. But they are still consistent on past form with very low global growth. What’s more, the prospects for a sustained …
1st October 2012
Inflation has fallen sharply this year and is likely to remain low. Admittedly, the rise in the price of oil and some agricultural commodities since June will push the headline inflation rate back up a bit in the near term. But we expect it to drop once …
25th September 2012
Disappointing trade figures have prompted us to cut our forecast for the growth of world trade volumes to just 2% this year. This is much lower than last year’s growth, and is slightly lower than our forecast for world GDP growth. What’s more, prospects …
21st September 2012
The recent decline in oil prices supports our view that a third round of quantitative easing from the US Fed is unlikely to cause global inflation to take off. Unfortunately, the boost to economic activity from additional monetary stimulus probably won’t …
20th September 2012
Even if it is sustained, this year’s rise in agricultural prices will have little impact on headline consumer prices, particularly in advanced economies. What’s more, we expect commodity prices to drop back sharply in the coming months as global demand …
13th September 2012
Global business surveys suggest there has been a more marked slowdown in the growth of manufacturing activity than in services in the past four months. But the former is a better indicator of the state of the global cycle. What’s more, surveys of both …
10th September 2012
A coordinated release of official stocks is one possible trigger for a correction in oil prices, but we still think that it is neither imminent nor necessary. A more realistic assessment of the prospects for demand should be sufficient to drag the price …
6th September 2012
The industrial slowdown which began in the second quarter has accelerated and is affecting advanced and emerging economies alike. GDP is likely to contract in the euro-zone and Japan in Q3, while growth in the US is below trend and China’s economy is …
4th September 2012
It looks as if global GDP growth slipped below 3% on an annualised basis in the second quarter of this year, its lowest level since early 2009. We expect no improvement in the second half of the year. … World GDP growth slows further in …
15th August 2012
Many commentators argue that central banks in advanced economies have all but run out of ammunition. We disagree. Admittedly, the room for further conventional policy stimulus is fairly limited, but there is scope for expanded asset purchase programmes …
8th August 2012
The global economy, which slowed sharply in the second quarter, has made a poor start to the third. Growth appears to have slowed in most of the major advanced economies in July, supporting our view that GDP is likely to contract in the euro-zone, the UK …
2nd August 2012
Some agricultural commodity prices have hit record highs this week, but the rate of increase of these prices is much lower than it was in 2007 or 2011, while energy prices are still lower than they were a year ago. Fears that central banks will keep …
20th July 2012
The euro-zone crisis is taking its toll on the rest of the world. Activity slowed in all major economies in the second quarter, including the US, China and Japan. We expect growth to pick up in the US and China in the second half of the year, but Japan’s …
18th July 2012
Fears of the “worst drought in the US in 25 years” have led to a spike in US grain prices and understandably added to concerns about another global food inflation shock. However, there are at least six reasons why these concerns are overdone. … Six …
12th July 2012
Hopes that the EU was finally getting to grips with its crisis and that monetary stimulus would boost global demand have faded. With euro break-up risk likely to rise in the second half of the year and monetary policy looking increasingly impotent, things …
9th July 2012
The increase in protectionist policies since 2008 has so far had only a modest impact on world trade. Looking forward, however, pressures to adopt more damaging trade barriers may increase, particularly if the global economy weakens further. … How big a …
6th July 2012
Compared to 2008-09, South Africa is now less vulnerable to financial contagion as a result of a fresh shock to the global economy, most notably from a break-up of the euro-zone. But at the same time, policymakers have less room to boost domestic demand …
3rd July 2012
With the US recovery faltering and prospects for Japan and the euro-zone worsening, there are growing risks that global growth will fall short even of our below-consensus 3% forecast this year. … Global slowdown gathers …
The slump in oil prices results from faltering global demand and growing fears of an escalation of the euro-zone crisis. As such, it is wishful thinking to imagine that cheap oil can itself generate a recovery. … Collapse in oil prices will not save …
22nd June 2012
The best that can be said about the Los Cabos summit is that it appears to have been less fractious and better organised than November’s meeting in Cannes. But it seems to have done precious little to address the world’s underlying economic problems which …
19th June 2012
Our working assumption is that there will only be a limited break-up of the euro-zone, with Greece and one or two other smaller countries leaving this year or next but policy-makers managing the process sufficiently well to keep the rest of the union …
18th June 2012
