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Pause on reciprocal tariffs reduces risks for CEE President Trump’s 90-day pause on “reciprocal” tariffs has reduced the scale of downside risks to the global economy, and our new working assumption is that US tariffs on most economies stay at the 10% …
11th April 2025
China rather than US trade big concern for Africa Africa’s direct damage from tariffs imposed by the US should be limited, but the indirect hit will be larger if global growth weakens, and financial spillovers materialise. After US President Trump dialed …
At some point a partial rollback in tariffs is likely… The effective US tariff rate on China started the year at 11% (based on 2024 weights). It is now at 145%. Earlier this week we noted that tariff rates above 100% would cause Chinese exports to the US …
Opportunities for India amid tariff chaos All of our analysis of the latest twists and turns in the trade war – notably President Trump’s decision to postpone reciprocal tariffs (bar China) for 90 days – can be found here . Of course, things are subject …
A weaker renminbi, just not against the dollar China’s response today to President Trump’s 34% “reciprocal tariff” on China was more aggressive than we had anticipated . (Initial thoughts on Trump’s tariff on China can be found here .) The moves take the …
4th April 2025
If the US tariffs on imports from the EU announced this week are kept in place, our current assessment is that this will lower GDP growth across Central and Eastern Europe (CEE) by 0.3-0.4%-pts on average over the coming year. Judging by the sharp …
Direct hit from Trump tariffs to be limited African economies will, for the most part, be relatively unaffected by US President Trump’s tariff announcement this week, at least directly. But it may cause indirect harm through lower commodity prices. And …
Near-term hit from tariffs for India won’t be big Our response to the Liberation Day tariff announcements includes analysis of the global macro impact here , the financial market impact here , online briefings that can be viewed on demand here and various …
Trump’s auto tariffs to deal limited blow to SA South Africa finds itself in the firing line from US President Trump’s auto tariffs, but the macro impact will be limited and other developments over the past week have been more positive for the country’s …
28th March 2025
Autos now in the crosshairs The Trump administration’s announcement of a 25% import tariff on autos and some auto parts will have a particularly large impact on Hungary and Slovakia. Our detailed response on Thursday to the tariff news can be found here . …
Concessions to Trump may not prove enough All eyes are now on the Trump administration’s reciprocal tariff plans, due to be unveiled on Wednesday 2 nd April. There is still huge uncertainty around what form reciprocal tariffs will take. The administration …
Kenya and the IMF agree to disagree Kenya and the IMF abandoned talks over the ninth review of the country’s existing financing programs this week and, while a new deal is in the offing, public debt concerns are likely to build. It’s been clear for some …
21st March 2025
Erdogan alarms investors The arrest of a leading opposition politician in Turkey on Wednesday triggered a major sell-off in the country’s stock market and currency. Events are in flux at the moment, but there are three takeaways. The first is that the …
Equity jump unlikely to be start of sustained rally At the time of writing, India’s benchmark Sensex stock index has risen by 4% this week, making it its best week in almost three years. The big picture, however is that the Sensex is still 11% off its …
SA 2025 Budget: will a compromise be reached? South Africa’s budget was finally delivered this week, but without the DA’s support. There are enough reasons to think that a compromise within the GNU will eventually be brokered, but it will still need to …
14th March 2025
Bond market investors don’t seem to believe that monetary policy will be eased any further in China. Two-year yields have risen from 1.0% to 1.5% since the start of the year, putting them into line with overnight rates. They are higher now than they were …
Ceasefire proposal met with resistance by Putin The US proposal for a 30-day ceasefire in Ukraine has been met with a mixed response in Russia, with President Putin saying that he “supports the idea” but that it needs “serious reworking”. The ceasefire …
Key risks: food prices, banks, tariffs This week we published our Q2 India Economic Outlook , which contains all of our latest analysis of India’s economy and financial markets (the forecasts and underlying data can also be viewed in our interactive India …
Rand makes gains, but for how long? The rand rallied this week on the news that South Africa’s current account deficit narrowed in 2024, but it remains vulnerable to depreciation given that the terms of trade are set to worsen, and the stability of the …
7th March 2025
Mexico may have received a (belated) reprieve from US tariffs this week, but some goods will still be subject to US duties now and there’s still the lingering uncertainty about whether Mexico will face tariffs on 2 nd April. Assuming Mexico faces a tariff …
The agreement reached this week by the German government’s likely next coalition parties to reform the national fiscal rule suggest they will implement a significant fiscal stimulus over the next two years, which we think could lift German GDP growth by …
NPC points to a renewed pick-up in fiscal spending The announcements out of the National People’s Congress (NPC) confirmed that China’s budget deficit will widen this year. But given the complexity of the Ministry of Finance’s fiscal projections, the …
No sign yet of SA budget dispute being resolved There’s now less than two weeks until South Africa’s Finance Minister Enoch Godongwana (finally) delivers the 2025 Budget. But the past few days have only further underlined the widening divide between the …
28th February 2025
Fiscal deficit and consumption support will be key China’s National People’s Congress kicks off its annual gathering on Wednesday. While the meeting tends to last around a week, the most important events, including the delivery of the Work Report and …
Europe scrambles amid warming US-Russia ties The plans announced by the US and Russia to improve relations and seek an end to the war in Ukraine have sent shockwaves across Europe and caught many off guard. The possibility that a peace deal is negotiated …
21st February 2025
SA Budget: GNU coalition under strain South Africa is still reeling from this week’s surprise last minute Budget postponement and concerns about divisions within the GNU are likely to rise. We set out our initial thoughts to the delay in a Rapid Response …
SA 2025 Budget: Fiscal trade-offs to get harder In South Africa, the Treasury will face a difficult balance act in recommitting to fiscal while also appearing pro-growth in next week’s 2025 budget presentation. South Africa Finance Minister Enoch …
14th February 2025
Enthusiasm abound after Trump and Putin talk The phone call between Presidents Trump and Putin this week and comments by US Secretary of Defence Pete Hegseth caught many by surprise, particularly in Ukraine and Europe. The US and Russia have now agreed to …
President Ramaphosa used his State of the Nation Address (SONA) yesterday to recommit to fiscal discipline and investment-led growth. The rebuke of the US in his speech was noticeable, suggesting Trump’s recent actions could act to push South Africa …
7th February 2025
Hawks fly in CEE, but further rate divergence likely The communications from policymakers following central bank meetings in Poland and Czechia this week struck a hawkish tone. After leaving rates on hold , Poland’s central bank Governor Glapinski focused …
Mexico dodges tariffs… for now The world was convulsed at the start of the week by President’s Trump’s tariff threats on Canada and Mexico, which were postponed for 30 days through last minute deals whereby both countries pledged to beef up border …
Consumption rebound looking shaky Growth in retail sales and wider consumer spending accelerated last quarter, buoyed by the consumer goods trade-in scheme and broader fiscal support. But this recovery appears to have stalled at the start of 2025. Both …
Putin’s turn to up the ante We argued last Friday that President Trump’s comments on the war in Ukraine were likely to be met with a cold reception in Russia, dampening hopes of a quick end to the conflict. And an interview given by President Putin this …
31st January 2025
DeepSeek doesn’t mean China is overtaking in AI US markets reeled at the start of this week as DeepSeek’s launch of a “reasoning” model similar to the leading offering from OpenAI focused attention on the Chinese firm’s success in developing …
Trump ups the ante against Russia Comments by President Trump that he would tighten US trade and sanctions policy against Russia if Putin does not agree to negotiate an end to the war in Ukraine are likely to have been received with anger in Moscow. The …
24th January 2025
Nigeria becomes BRICS latest partner country We think Nigeria’s recent admittance as the BRICS’s latest “partner” member adds to the evidence that the government is trying to straddle the geopolitical divide between US- and China-led blocs. After being …
The Trump administration’s first week has given policymakers in Latin America – and Mexico in particular – plenty to fret about. Unsurprisingly, migration has been a major focus for President Trump so far. His inauguration speech mentioned “returning …
Dovish SARB on the cards even with weak rand The rand’s recent weakness has raised worries in the market that the SARB’s easing cycle will slow. While the risks to our forecast for the repo rate are certainly tilted to the upside, we still think a …
17th January 2025
Israel & Hamas: an end to the war The ceasefire deal agreed between Israel and Hamas this week, if it sticks, would represent a major de-escalation in the region. It’s a multi-phase deal that will involve the exchange of hostages and prisoners, eventually …
Trump softening his expectations on the war? Expectations for an imminent end to Russia’s war in Ukraine once Trump takes office as US President on 20 th January took a knock this week, following an FT report and recent comments from officials suggesting …
10th January 2025
Mozambique and the return of Mondlane Post-election unrest in Mozambique threatens to re-escalate with Daniel Chapo set to be inaugurated as the country’s next president on Wednesday and opposition leader Venâncio Mondlane returned to the country this …
Is Putin moving closer to a compromise? A lot of headlines from President Putin’s annual year-end press conference have focused on suggestions that he’s willing to make compromises to end the war in Ukraine. But it also remains clear that the two sides …
20th December 2024
Anatomy of a (self-inflicted) crisis Brazil this week was on the precipice of a crisis – if not in one already. The real continued to tumble, hitting a record low of 6.3/$ on Wednesday – down around 10% against the dollar since late October. 10-year local …
Nigeria: more rate hikes not a done deal Nigeria’s headline inflation rate crept up further in November, but we’re not convinced that this will prompt the central bank to deliver more rate hikes. Figures released on Monday showed that Nigeria’s headline …
Winner and losers from Assad’s downfall The fall of Syria’s President Bashar al-Assad last weekend is a monumental development after a period of 54 years in which his family had ruled the country. While there is still a high level of uncertainty over the …
13th December 2024
South Africa October activity data point to recovery While data out this week showed renewed struggles in South Africa’s mining sector, other figures suggest that a recovery has taken hold in Q4. The retail sector recorded a 1.6% m/m gain in October, more …
B ut a dramatic shift in policy approach still unlikely The Central Economic Work Conference (CEWC), an annual gathering at which China’s leadership discusses targets and priorities for the following year, concluded yesterday. We discussed the key …
Another twist in Romania’s election rollercoaster Romania’s constitutional court unexpectedly announced today that it will annul the first round of the presidential election , which took place on 24 th November and saw independent far-right candidate, C …
6th December 2024
South Africa GDP miss to be followed by rebound The 0.3% q/q fall in South Africa’s GDP in Q3 was disappointing, but it was largely driven by a slump in agriculture that should unwind. Along with low inflation and continued monetary easing, we expect the …
CBN makes case inflation close to peaking Central Bank of Nigeria Governor Yemi Cardoso set out the case at this week’s MPC meeting for inflation to slow down, suggesting that officials are eyeing the end of the tightening cycle. The CBN’s …
29th November 2024
