Propping up Africa’s vaccine supply The announcement that the African Union (AU) has secured a large COVID-19 vaccine order is a positive step towards Africa’s recovery from the coronavirus crisis, but the road remains long and bumpy. Reports suggest that …
15th January 2021
The government confirmed this week that vaccine availability will remain limited in the first quarter, so there is little chance of the economic recovery beginning any sooner than we currently forecast. The government this week released a schedule of …
After the broad-based rally of the last few weeks, the prices of many industrial commodities dipped a little this week, reflecting concerns about rising new virus cases and the widespread tightening of virus containment measures . The rally may well …
The inauguration of President-elect Joe Biden and new impeachment of President Donald Trump may signal a dramatic shift in the political landscape, but it remains to be seen whether hopes of a transformative boost to government spending will survive the …
Brazil’s near-term prospects take a hit The Brazilian government’s announcement that it will (finally) begin vaccinations on 20 th January couldn’t come any sooner. The country’s COVID-19 outbreak has continued to worsen and the discovery of a new variant …
Hungary side-steps EU to ramp up vaccination Vaccination programmes gathered pace across the region this week, with Turkey administering doses of China’s Sinovac vaccine and Russian President Putin ordering the mass vaccination of the population. But …
This week’s news on the economic damage caused by the virus and the efforts to fight it have given us some cause for optimism. By 13 th January, 4.4% of the population had received their first COVID-19 vaccination dose. Admittedly, in order to achieve its …
In contrast to the relentlessly grim epidemiological numbers, the economic data for the euro-zone published this week have been fairly positive. The 2.5% m/m increase in euro-zone industrial production in November points to output rising in Q4, helping to …
A strong Q4 & a tough Q1 This week’s data from Sweden and Norway add to the signs that both economies ended Q4 on a decent note and outperformed even the best-performing major euro-zone economies in 2020. Mainland GDP in Norway contracted by less than …
Virus flare-up to dampen holiday travel China reported 210 new COVID-19 cases today (66 of them asymptomatic), the highest daily tally since March. The virus flare-up began in Hebei province but has spread more widely than previous localised outbreaks. A …
Indonesia’s novel vaccine strategy Indonesia’s vaccination campaign got underway earlier this week amid surging cases of COVID-19 across the country. Whereas most countries are prioritising the elderly and vulnerable in vaccination rollouts, Indonesia has …
Consumers becoming more cautious Japan’s recovery was gathering momentum before surging infections began to take their toll. Machinery orders were 14.5% above Q3 levels across October and November, pointing to a sharp rebound in business investment last …
Australia has to rely on less effective vaccines We argued last week that Australia may vaccinate all vulnerable people by May, allowing most restrictions on activity to be relaxed. Indeed, Australia has ordered sufficient vaccine doses to inoculate its …
Long-term investment outlook still challenging Industrial production data released this week showed a renewed y/y contraction in output in November, but there are some positive to be taken from the breakdown. In particular, the capital goods output …
Tunisia on the verge of new IMF deal? Tunisian Prime Minister Hechem Mechichi confirmed this week that the government is set to launch a package of reforms in a sign that the authorities are gearing up to secure a new IMF deal. Fiscal consolidation will …
14th January 2021
Positive news on vaccines… There is a glimmer of hope for economies across Latin America as vaccines are being rolled and procurement is stepping up. Currently Mexico, Chile, Costa Rica and Argentina are leading the region’s vaccine race. All four started …
8th January 2021
Unhappy new year in South Africa There are no signs of South Africa’s COVID-19 outbreak abating – even though tougher restrictions were imposed last month – which will keep the costs of the pandemic high in the coming months. A second wave, officially …
Ontario and Quebec extended their coronavirus restrictions this week and, given that infections are still rising and logistical problems are holding up the vaccination process, it seems likely that further measures are to come. At the end of last year, …
Although we think that markets are still over-estimating the potential for additional large-scale fiscal stimulus this year, the Democrats’ unexpected victories in both Georgia Senate run-off elections has undoubtedly shifted the balance of risks a …
We don’t know exactly how long the third English lockdown, which started on 5 th January, will last. Government ministers have talked about schools being closed until mid- or late-February, but the lockdown legislation MPs voted into law on Wednesday has …
After a strong finish to 2020, most commodity prices built on their gains in the first week of January , as investor sentiment continued to prove supportive and Saudi Arabia announced that it would unilaterally cut oil production in February and March. In …
Vaccination programmes struggle to take-off COVID-19 vaccination programmes have started slowly in the region and, with virus restrictions likely to be extended, or tightened further, economies will remain weak for a few more months at least. Russia has …
Q4 not as bad as first feared… The manufacturing PMIs from December (released on Monday morning), suggest that the industrial sectors in Switzerland and Sweden ended 2020 on a high, helped by robust demand from Asia. (See here .) The Swiss PMI rose to a …
The number of new coronavirus cases came down in many countries before Christmas as a result of the tighter restrictions in place. But since then, things have taken a turn for the worse. New cases have been increasing at the beginning of the year in …
COVID-19 battle not over but vaccines offer hope Shijiazhuang, a city of 11 million and the capital of Hebei, was put into lockdown on Thursday, after recording 117 new coronavirus cases the previous day (67 of them asymptomatic). Mass testing is being …
Vietnam: outperformance continues GDP figures for Vietnam should always be treated with caution, but data released before New Year show that the economy grew by an impressive 4.5% y/y in the final quarter of 2020. This brought growth for the year to 2.9%, …
Several challenges to widespread vaccination India crossed an important milestone in its attempts to tackle the pandemic this week with the emergency approval of the COVID-19 vaccines developed by Oxford/AstraZeneca and Bharat Biotech (an Indian …
Vaccine rollout to begin slightly earlier This week Prime Minister Scott Morrison revealed that the vaccine rollout may be brought forward to mid to late February. Mr Morrison said he hoped the Pfizer/BioNTech vaccine would be approved by the end of …
Nationwide state of emergency looms With Japan recording a record 7,000 virus cases on Thursday, the government yesterday declared a state of emergency in Tokyo and the three surrounding prefectures of Kanagawa, Saitama and Chiba that will last until 7 th …
Saudi cuts, but OPEC+ tensions still simmering Saudi Arabia’s surprise voluntary oil output cut unveiled at this week’s OPEC+ meeting has lifted oil prices, but even so GDP growth will probably be weaker in Q1 than previously expected. After much acrimony …
7th January 2021
We think that the price of oil will outperform most other commodity prices next year . A lifting of virus restrictions, as vaccines are rolled out, should allow for a strong bounce-back in oil demand and prices in the second half of next year, whereas we …
18th December 2020
The provincial government in Quebec this week announced an 18-day “circuit breaker” lockdown, and the authorities in Ontario seem to be planning something similar. We assumed further measures were ahead, so this has not caused us to alter our forecasts, …
Vaccine rollout: the good, the bad and the ugly Policymakers in much of the region are stepping up efforts to launch vaccination campaigns, which could start within a few weeks. But there are early signs that this will be a difficult process, particularly …
Trials and tribulations of COVAX Reports this week pointed to the multilateral COVAX facility’s high risk of failure, which would delay many African countries’ access to vaccines and the ensuing economic benefits. South Africa, for its part, missed a …
The decline in retail sales in November confirmed the message from the slumping high-frequency activity data and the rising trend in jobless claims – namely that the restrictions imposed by many states to stem the surge in coronavirus infections are …
Russian government takes aim at food price surge Moves by the Russian government this week to try to curb the rise in food inflation are unlikely to have a major impact on monetary policy, but they underline that the shift towards providing more social …
The sentiment from this passage we published in the first UK Economics Weekly of this year still feels relevant for 2021: “With something like a no deal still possible in December, Brexit uncertainty will prevent 2020 being a good vintage for the …
US Treasury not on the SNB’s Christmas card list The SNB’s final policy meeting of the year (see here ) was overshadowed by the news on Wednesday that the US Treasury designated Switzerland, along with Vietnam, a “currency manipulator” in its latest …
With this being our final Weekly of 2020, it seems like a good opportunity to cast an eye back over this year, and draw some lessons for next year too. Lesson 1: acknowledge the uncertainty We aren’t going to be too harsh on ourselves for not seeing the …
Fiscal policy to stay supportive, except in Sri Lanka Most countries in Asia came into this year with a relatively low level of government debt. They are generally better placed than other emerging markets to cope with the sharp increases due to COVID-19. …
Looser target may not deliver looser policy Under current law, India’s government issues the RBI with an inflation target every five years. The current target of 4% CPI inflation, with a “tolerance band” of 2-6%, runs until the end of March 2021. Media …
Politburo tea leaves ahead of the CEWC We’re still awaiting news out of the Central Economic Work Conference (CEWC), which sets the economic targets and policy priorities for the coming year. (See here for what to expect.) We did, however, get some hints …
Recovery will lose steam Survey data released this week suggest that economic activity continues to recover in the face of the most severe wave of coronavirus in Japan yet. The recovery in the Q4 Tankan beat consensus expectations, with the “all industry” …
Coal the latest victim of trade war with China Chinese steel mills and power plants were told to stop importing Australian coal at the start of October. More recently, China has relaxed coal import quotas for major power plants due to domestic supply …
COVID-19: Light at the end of the tunnel COVID-19 outbreaks have started to come under control in recent weeks which, combined with the start of the roll-out of vaccines, should give a lift to the region’s economic recovery. However, there is likely to be …
17th December 2020
Banxico’s traditional hawkishness set to fade? The approval of Galia Borja Gómez as a deputy governor of Banxico is likely to mark a dovish shift at the central bank. Admittedly, not much is known about the monetary policy views of Ms. Borja. But she will …
11th December 2020
Zambia and the IMF: high hopes The confirmation this week that Zambia is seeking an IMF funding program is a positive step, which is likely to improve the chances of a wider debt restructuring deal with external creditors. An IMF deal would lend more …
The Canadian dollar jumped to a two-year high this week and, despite the pledge from the Bank of Canada that it will keep rates low across the yield curve, we think there is still scope for further gains. We have been more optimistic than most about the …
