Exports won’t rise much further While some of the rise in exports in January was likely due to the timing of the lunar new year, they should have continued to rise faster than imports across this quarter, with net trade likely to provide a small boost to …
17th February 2021
Jobs created despite lockdown and fall in GDP The preliminary estimate of euro-zone Q4 GDP was revised up slightly in today’s release, and confirmed that the hit to the economy from the autumn lockdowns was much smaller than in Q2 last year. Meanwhile, …
16th February 2021
Q4 growth beats expectations but slow vaccine rollout clouds outlook The Q4 GDP data for Central and Eastern Europe revealed that all countries other than Poland grew at the end of 2020. But there was a marked divergence across the region that can be …
Inflation to stay high until middle of the year Saudi inflation rose to 5.7% y/y in the first month of the year as softer food inflation was more than offset by stronger transport inflation. Higher global oil and food prices, combined with the lingering …
Inflation rises again, but CBN in no mood to tighten policy The latest jump in Nigerian inflation, to 16.5% y/y in January, on the back of surging food price pressures, is likely to increase pressure on the central bank (CBN) to tighten monetary policy. …
Strong Q4 to be followed by Q1 stumble The robust 6.0% q/q rise in Colombia’s GDP in Q4 marks a solid end to 2020, but the recovery will slow sharply in Q1 due to the tightening of restrictions. The outturn was in line with our forecast, but below the …
15th February 2021
Recovery stalling Industrial production edged down at the end of last year but held up reasonably well during Q4 overall. At the start of this year, we think output will have been roughly unchanged; manufactures seem to have adapted to lockdowns quite …
Comparatively well-placed The slightly smaller-than-expected 0.6% q/q increase in Danish GDP in Q4 left the economy 3.1% smaller than it was in Q4 2019. (See Chart 1.) Although activity is likely to slow in Q1 – on the back of tighter virus restrictions …
Recovery to continue at decent pace in 2021 Revised Q4 GDP data show that Singapore’s economy rebounded more strongly than first thought at the end of 2020. Buoyant global demand for electronics and pharmaceuticals and strong fiscal support should see the …
Tourism slump to drag on Thai recovery Thailand’s economic recovery slowed in the final quarter of last year, and the worsening prospects for the tourism industry mean we are cutting our GDP growth forecast for 2021 from 6.0% to 4.5%. Today’s figures show …
Recovery to keep surprising to the upside The strong rise in GDP in Q4 left output just 0.5% below pre-virus levels. And while most economists expect a renewed contraction this quarter due to the second state of emergency, we think that output will be …
Commercial property borrowing beginning to show signs of life Commercial real estate debt growth picked up in January, seeing its strongest rise since April. That likely reflects a sharp increase in investment deals completed at the tail-end of 2020. …
12th February 2021
Low inflation means RBI can keep policy loose CPI inflation dropped back to a fraction above the RBI’s long-term target in January, its lowest since 2019. It should remain well inside the target band over coming months as easing supply constraints offset …
Smaller-than-expected contraction in Q4, Q1 should be better GDP figures show that Poland’s economy contracted by 0.7% q/q in Q4, which is likely to have been among the larger falls across Europe. Containment measures are likely to be lifted slowly in a …
Norway still better placed than most The larger-than-expected increase in Norwegian mainland GDP in Q4 confirms that Norway is faring much better than its European peers. Activity is likely to have weakened at the start of 2021, but higher oil prices and …
Avoiding a technical double-dip recession The media headlines have focused on the record-breaking 9.9% decline in annual GDP in 2020, but t he rise in GDP in Q4, despite the COVID-19 lockdown in November and restrictions in December, is further evidence …
Recovery falters at tail end of 2020 Turkey’s industrial production and retail sales figures for December add to the evidence that the economic recovery slowed sharply at the tail end of 2020. This weakness has almost certainly carried over into this year …
Renewed weakness supports case for additional rate cut The small 0.1% m/m rise in Mexico’s industrial production in December confirms that the economy lost significant momentum at the end of last year. The renewed economic weakness may help to convince …
11th February 2021
Housing market cooling sharply The January RICS survey suggests that the housing market has embarked on the next leg of its journey through the pandemic. The lockdown and the looming end of the stamp duty holiday have caused a sharp drop in buyer demand …
Economy set to backslide more sharply in Q1 Malaysia’s economy shrank in Q4 due to a large second wave of the virus and is likely to have contracted much more sharply at the start of 2021. The economy should soon begin to recover again now that the …
Commercial crude stocks approaching pre-virus levels US commercial crude stocks fell last week, while implied product demand strengthened. We expect these trends to continue over the coming months, as COVID-19 containment measures are eased . The EIA’s …
10th February 2021
Inflation unlikely to remain so subdued for long The fall in core CPI inflation to 1.4% in January, from 1.6%, illustrates that price pressures remain weak, but base effects will drive both core and headline inflation back above 2% over the coming months …
Inflation falls, but rate cuts still unlikely until later in the year The drop in Egyptian inflation to 4.3% y/y in January leaves the headline rate below the lower bound of the central bank’s (CBE) target range but, if we’re right in expecting inflation …
Recovery still struggling The flash estimate of Saudi Q4 GDP showed that the economy continued to recover at the end of 2020 but it remained slow-going. Tighter virus containment measures and deeper oil production cuts mean that the economy is likely to …
Norwegian core inflation to fall back to target Core Norwegian inflation edged down in January and will continue to fall back this year as the inflationary boost from previous krone weakness fades. The Norges Bank will be in no rush to raise interest …
Slip into deflation no cause for concern Headline consumer price inflation returned to negative territory last month, but this was largely due to a shift in the timing of the Lunar New Year. In fact, producer price inflation turned positive for the first …
Rising inflation makes rate cut in Mexico less likely The rise in Mexican inflation in January makes Thursday’s interest rate decision a close call, although we still think a 25bp rate cut is more likely than not. Meanwhile, the further increase in …
9th February 2021
Credit growth continues to slow as policy turns less supportive Credit growth in China dropped back further last month due to a broad-based slowdown in both bank and non-bank lending. Credit is likely to continue decelerating as the PBOC focuses on …
December’s severe weakness a one-off The collapse in wage growth in December was entirely due to a fall in bonus payments. Wage growth will have bounced back in January and should soon turn positive as the labour market tightens and corporate profits …
Manufacturing recovery stalling Data published today show that German industrial production was flat in December and we suspect that output will have fallen slightly since then as virus containment measures continued to take a toll and supply chain …
8th February 2021
Third wave proving far less damaging than the first The resilience of the Economy Watchers Survey in January suggests that the third wave is causing far less economic damage than the first did. That supports our non-consensus view that the economy will …
Rising inflation takes rate cuts off the table … for now The further rise in Russian inflation to a near two-year high of 5.2% y/y in January will remove any chance of an interest rate cut in the coming months. The central bank will wait for evidence that …
5th February 2021
Labour market recovery likely to regain momentum soon The muted 49,000 increase in non-farm payrolls in January illustrates that the recent wave of COVID-19 cases is still weighing on the economy. But with infections now dropping back sharply and the …
Hours worked rise despite slump in employment While the slump in employment in January suggests GDP growth will slow sharply this quarter, the unexpected rise in hours worked supports our view that GDP will at least continue to increase, and the strength …
House prices start to slip The drop in the Halifax house price index in January confirmed that the turn of the year coincided with a change of momentum in house prices. We expect house prices to continue to drop back over the course of 2021 as the stamp …
The contraction in Indonesian GDP eased slightly again at the end of last year, but a failure to control the virus means the recovery is likely to be slow and fitful in the quarters ahead. Figures published today show that Indonesian GDP contracted by …
Inflation to stall central bank easing Inflation broke through the upper boundary of the central Bank’s target range for the first time in two years in January and is likely to lead the Bank to pause its easing cycle. But with price pressures set to fall …
Retail Sales to ease from here The decline in retail sales in December largely just reflects the impact of Black Friday sales. Given the reopening of the Victorian economy in Q4 consumption probably still rose strongly in the quarter. Retail sales values …
Further signs of optimism about construction activity this year The Q4 data showed a first rise in reported construction workloads since Q4 2019, albeit a modest one. With expectations more upbeat too, this could suggest activity has turned a corner. But …
4th February 2021
Consumption likely to fall in Q1 December’s data show that euro-zone retail sales rose at the end of last year. But restrictions have been tightened in many economies since then and non-essential shops remain closed in several countries, including …
Star performance starts to fade The construction industry outperformed the rest of the economy in 2020 by being the first and only sector to see output recover to its pre-virus level. But the unexpected dip in the construction PMI in January suggests that …
Net trade to remain broadly neutral December’s rise in exports partly reflects higher commodity prices and with goods import volumes above pre-virus levels, we think that net trade won’t be a big contributor to GDP growth over coming quarters. The 2.8% …
Commercial crude stocks to remain on a downward trend Commercial crude stocks continued their counter-seasonal decline last week, even as net imports rebounded and refinery throughput eased back slightly. We expect inventories to decline further over the …
3rd February 2021
Threat of higher interest rates drives up mortgage demand The threat of higher interest rates drove mortgage demand higher in January, with refinancing activity seeing a particularly large gain. A narrowing spread means we expect the upcoming rise in …
Inflation jump partly due to temporary factors The jump in inflation in January reflects several one-off factors, some of which will be reversed in February. Headline inflation is likely to rise to around 2% by the end of the year, but will drop back next …
Recoveries held back by tightening of virus restrictions January’s batch of whole economy PMIs suggest that that economic recoveries in the region have struggled to gain more momentum at the start of this year as fresh virus outbreaks have prompted a …
Slow start to the year, downside risks mounting The final Composite PMIs suggest that economic activity in the euro-zone contracted in January. We suspect that the economy has become more resilient to pandemic-related restrictions than it was a year ago, …
Inflation rises again, but further tightening unlikely Turkey’s headline inflation rate rose again in January and may edge up a little further in the next few months, but we think that the central bank has probably done enough to convince investors that …
PMIs point to decent start of 2021 India’s PMI readings for January suggest that the economy is still rebounding and, with fiscal policy finally being loosened significantly, a decent recovery over the coming quarters looks a stronger bet now than it did …
Unemployment rate should continue to decline in 2021 The fall in the unemployment rate to 4.9% in New Zealand means the rate is already past the peak and we expect the labour market to continue to tighten throughout 2021. The 0.6% q/q rise in employment …
2nd February 2021
