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The global energy market is in the early days of a radical redesign due to the need to cut greenhouse gas emissions. In this Focus , we introduce our long-term energy market forecasts, which are characterised by continued growth in energy consumption and …
27th April 2023
The physical risks facing commercial property are substantial with extreme weather events like floods and wildfires set to increase in both the US and Europe over the coming decades. Property markets have yet to fully price these in, especially in areas …
21st April 2023
The economic impact of the Oxford malaria vaccine, which has now been approved by regulators in Ghana and Nigeria, will depend on the pace and breadth of the rollout and how long immunity lasts for. But it could potentially have a large positive impact on …
20th April 2023
As countries age, falling working-age populations will make it harder to sustain growth in the size of the labour force. Lessons from countries that are already advanced in the ageing process suggest that the drag can be offset by raising female labour …
28th March 2023
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
The numerous “plans for growth” that have been announced by the Government, the Opposition, and various commentators in recent months vary in their analytical rigour but all miss one crucial point: many of the reforms required to lift the UK’s pitifully …
9th March 2023
The current economic downturn will mean that short-to-medium term property performance is under-par. But over a longer horizon, we expect real estate returns to reassert their traditional position somewhere between bonds and equities. Last year was an …
2nd March 2023
While it is in America’s strategic interests to build stronger economic ties with allies to counter China’s growth, its protectionist tendencies could undermine those goals and blunt the effectiveness of its interventionist foreign policy. Our work on …
22nd February 2023
The big sell-off in both equities and bonds that was a feature of 2022 has arguably created scope for them to fare a bit better in the coming years by reducing their valuations. Nonetheless, we don’t think they will provide spectacular returns over the …
21st February 2023
This interactive dashboard allows you to explore our long-term macroeconomic forecasts for the world's largest economies, including GDP growth, inflation and policy rates. If you have subscriber access to the data underlying this dashboard, you can …
If it isn't already, India will soon be the world’s most populous nation. But this doesn’t mean that policymakers can simply wait for the economic benefits to arrive. The key to unlocking India’s demographic potential is to develop the manufacturing …
15th February 2023
Click here to read full report. The Ukraine war has added to the forces reshaping the global economic system into two US-led and China-led economic spheres. While the economic diversity of the US-bloc should help it to adapt relatively easily, the …
13th February 2023
The energy crisis in Central and Eastern Europe (CEE) has lost some of its bite as natural gas prices have slumped and countries have made good progress in replacing Russian energy supplies. This has brightened the near-term outlook and reduced the risk …
6th February 2023
The process of “global fracturing” that we outlined in our annual Spotlight series last year will remain the dominant macro theme for the next decade. But speculation that it will result in the rise of a “petroyuan” on a scale sufficient to challenge …
17th January 2023
Although valuation premia in certain parts of the US stock market shrank significantly last year, we think there is still some room for this to continue in the coming decade and weigh on their relative performance. To re-cap, there was a marked reversal …
6th January 2023
Download the PDF for the full report here . Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections in this publication …
25th November 2022
The Ukraine war has sent the risk of Russian cyberattacks on the West soaring up the agenda, with an attack on critical infrastructure potentially bringing whole economies to a halt. In most cases, a few days of disruption would not actually put much of …
22nd November 2022
We suspect the underperformance of US equities that has accompanied the US dollar’s slump so far this month will become a feature from mid-2023, as the currency eventually comes under sustained pressure. Since the end of October, MSCI’s USA Index has …
16th November 2022
Malaysia heads to the polls on Saturday for a general election which, if the latest opinion polls are correct, will lead to a further period of unstable and fractured politics. This reduces the chances of meaningful economic reforms being passed and …
Although relatively low equity valuations sometimes point to a greater chance of outsized returns over longer time horizons, we do not think that this is the case for China’s stock market. After all, we expect Chinese companies to face several long-term …
20th October 2022
Central banks have the tools to deal with liquidity crises arising from rising interest rates and falling asset prices. Instead, the bigger threat is that higher interest rates produce large and simultaneous falls in asset prices that threaten the …
11th October 2022
If the UK government’s “new era of fiscal policy” boosts GDP growth as planned, the UK’s long-term prospects will be much improved. But the action announced so far will not achieve this. It is even possible that, by denting the UK’s fiscal credibility, …
30th September 2022
The post-pandemic recovery in travel and tourism still has some way to go in parts of the world that have been slower to lift restrictions, such as in Asia. And China’s reluctance to move away from its zero-COVID approach means tourism for leisure …
15th September 2022
Emerging markets will account for more than half of global GDP within the next decade. Headlining this, India is on course to become the world’s third largest economy by 2030. And EMs with rapid population growth, healthy manufacturing sectors or those …
6th September 2022
The Indian rupee has continued its long-run trend of depreciation against the US dollar this year, taking it to a record low of 80/$. It may still weaken further in the near term. However, there are reasons to think that that the rupee will reverse …
31st August 2022
We agree with PM Modi’s assertion in his Independence Day speech over the weekend that boosting female participation in the labour force could have a major positive impact on the economy, but in truth the government’s record in this area is poor. Looking …
15th August 2022
Download the PDF for the full report Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections in this publication are as …
12th August 2022
The composition of spending changes as consumers age, with a greater proportion allocated to healthcare, food and drink, and less to education, transport and recreation. The experience of countries that have already aged significantly, such as Japan, …
1st August 2022
US equities have plunged this year, but the S&P 500’s valuation remains a long way from looking low on most measures, including Shiller’s CAPE. This is a key reason why we expect the returns from US equities over the next decade or so to fall well short …
25th July 2022
Ageing populations will be one of the main structural challenges facing many economies over the coming decades. Ahead of a series of work analysing what can be learned from countries ageing rapidly, this Update starts by looking at which those are. The …
14th July 2022
The UN’s latest population projections highlight that demographic headwinds are set to mount in almost all economies outside Africa. The most significant downward revisions were to its forecasts for China, but we still think that the ultimate decline in …
13th July 2022
At the recent ECB’s annual forum, the world’s top central bankers argued that a return to a world of low inflation was unlikely. It is true that sustained undershoots of inflation targets are probably a thing of the past. However, policymakers’ renewed …
8th July 2022
While the current rise in inflation to near double-digit rates is clearly undesirable, it begs the question of at what point the costs of sustained higher inflation outweigh the benefits. We think that the tipping point is around 5%. This suggests that it …
30th June 2022
It is still too early to assess the lasting impact of the pandemic on productivity in developed economies. But we remain optimistic that the legacy could be a positive one. Productivity growth, in terms of output per worker, has swung about over the past …
24th June 2022
Despite the sharp fall in the US stock market this year so far, US equities still appear much more highly valued than their peers in the rest of the world. While that might not tell us much about the outlook for relative returns in the near term, …
10th June 2022
A falling fertility rate and declining employment among retirement age workers pose downside risks to our long-term forecasts for Japan’s labour force and GDP growth. However, with the female participation rate still climbing from record highs and job …
7th June 2022
12th May 2022
One benefit of the current rise in inflation, at least for governments, is that it is eroding the real value of public sector debt. But this will reverse only a small part of the pandemic-related rise in government debt ratios in DMs. And the impact on …
10th May 2022
We argued two years ago that the pandemic would accelerate changes that were already underway rather than trigger behavioural changes out of the blue. Now that most restrictions have been removed in advanced economies, spending on services and recreation …
6th May 2022
Substantial fiscal support helped to prevent a big rise in income inequality within developed economies during the pandemic. But inequality was rising in many DMs before then and could revert to that trend if technological advances disproportionately …
3rd May 2022
The valuations of mid- and large-cap equities in Japan have become even more attractive compared to those of their US counterparts following a further period of substantial underperformance in common-currency terms. That may bode well for their relative …
12th April 2022
The main long-run economic impact of the Ukrainian refugee crisis will be to boost the workforce of countries where the migrants settle, partially offsetting the unfavourable demographics that many of these areas face. According to the UN, some 10m …
29th March 2022
Claims that the war in Ukraine will prove to be a watershed moment that ends the dollar’s position at the heart of the global financial system are wide of the mark. It could accelerate the development of smaller trading blocs that use alternative …
23rd March 2022
Their net fall since the invasion of Ukraine means the valuations of European equities are now even lower relative to those of US stocks. While valuations have a mixed track record at predicting returns over short periods, they are key to our view that …
17th March 2022
It is highly likely that the war in Ukraine will accelerate Russia’s shift towards isolation and into autarky. (See here .) This will prevent Russia from catching up with more advanced economies, while the West will face some difficult choices as higher …
10th March 2022
One immediate effect of the war in Ukraine will be to push Russia several places down the league table of the world’s largest economies. However, the impact on the global economy over the long run will depend to a large extent on its political and …
2nd March 2022
Although the Fed is poised to step on the brakes to tackle the highest rate of inflation in four decades, we don’t expect the yields of US equities and Treasuries to rise to anywhere near their peaks in 1982 after the central bank jacked up rates. …
18th February 2022
Recent developments have supported our view that the pandemic will not do much permanent damage to the level of GDP in most countries, especially developed markets. Nonetheless, it will accelerate some of the structural trends that were already set to …
10th February 2022
We expect governments in advanced economies to take action to prevent public sector debt ratios from spiralling out of control as their populations age. However, this is uncertain, and the risk is some countries will end up on an unsustainable debt …
28th January 2022
Ahead of publishing our latest Long-Term Outlook next month, this Update sets out the assumptions we have made in our long term forecasts about both climate change and the efforts to prevent it. There is still huge uncertainty about whether countries will …
13th January 2022
