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This report was first published on Friday 31st May covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Monday 3rd June and the Caixin services and composite PMIs on Wednesday 5th June. Recovery still ongoing The PMIs for May …
31st May 2024
Stick or twist for OPEC+ Oil markets are gearing up for Sunday’s OPEC+ meeting which looks set to be a close call on how the group decides to take forward oil policy. OPEC+ has reduced its oil output by 3.2mn bpd since October 2022, but oil prices have …
30th May 2024
China’s economy is expanding at a decent pace, with the manufacturing sector a key source of strength. The country has been increasing its global export market share, and it is unlikely that Biden’s new tariffs will do much to erode recent gains. A …
Our China Activity Proxy suggests that economic momentum remains reasonably robust, fuelled by continued gains in manufacturing and a further recovery in services activity. A step-up in fiscal support and new property support measures may continue to …
Rates on hold, SARB to keep a close eye on election results The South African Reserve Bank’s decision to leave the repo rate unchanged at 8.25% was never in doubt. Governor Kganyago said as little about the election as was possible, but the MPC will be …
Repo rate on hold at 6.50% next week, but MPC to drop its hawkish policy stance That should set the stage for an August rate cut We think rate cuts will be a bit more aggressive this year than consensus forecasts The Reserve Bank of India (RBI) will …
Recovery in regional sentiment takes a breather The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) were a mixed bag in May and our regional-weighted measure edged down slightly. Even so, that still leaves …
Sovereign bond yields in Russia have surged to multi-year highs this year as markets have increasingly questioned the trade-off between the war effort on the one hand and policymakers’ ability to maintain fiscal stability and control inflation on the …
29th May 2024
A victory for Claudia Sheinbaum in Mexico’s election on Sunday is likely to see a continuation of Amlo’s generous social policies – which will also make Banxico’s fight against inflation harder. The main points of contrast with Amlo are that she will face …
Low oil output in the Gulf has constrained economic growth so far this year and the upcoming OPEC+ meeting will prove pivotal to the outlook over the rest of this year. Elsewhere in Middle East and North Africa, external financial support has mostly …
Africa Chart Pack (May. 2024) …
28th May 2024
Fall in inflation means rate cut in June still in play The decline in Brazilian inflation to 3.7% y/y in the first half of this month, coupled with signs of easing price pressures in some core categories, will provide relief to policymakers at the central …
South Africa's pivotal election looms There’s less than a week to go until South Africa’s pivotal election and there remains significant uncertainty about the ANC’s vote share and, if it’s forced to go into coalition, who it will ally with. The ANC’s vote …
24th May 2024
Still too early for nominal TRY appreciation The Turkish lira has been surprisingly stable over the past two months and Finance Minister Simsek noted this week that the currency would have actually appreciated had the central bank not been buying dollars …
Mexico’s election race enters the final phase Next week marks the final week ahead of Mexico’s election, in which all seats in congress, thousands of local government positions and, most importantly, the presidency are up for grabs. The opinion polls …
Growth slowdown begins Nigeria’s GDP growth slowed to 3.0% y/y in Q1, driven by a halving in the oil sector growth rate, alongside high inflation and tighter monetary conditions continuing to drag on the non-oil economy. We expect growth to remain …
Resolution of China’s property crisis would result in residential sales being substantially higher than today. Sales could rise by a third. But we wouldn’t expect prices to increase by much, if at all. And property construction activity will be weaker in …
Pullback in deposit growth is not a bullish signal After picking up during the pandemic, growth in bank deposits has slowed sharply recently. (See Chart 1.) They even fell outright in April, by a record RMB3.9trn, though this may partly reflect …
The sharp drop in frontier market sovereign dollar bond spreads this year has caught many by surprise. We think there’s a case that the bond rally may have gone too far in Argentina, Ecuador and Tunisia. But the decline in spreads in some frontiers, …
US pulling Saudi back from China’s orbit US officials this week suggested that a mooted grand deal with Saudi Arabia could be signed off in the coming weeks. This would redraw how the Kingdom aligns itself in a fracturing global economy. Jake Sullivan, …
23rd May 2024
Croatia has established itself as one of the fastest growing economies in the EU and we think that it will maintain GDP growth of around 3% p.a. over 2024-26. Income convergence – which has been rapid in recent years – will continue over the rest of this …
Rates to stay on hold throughout the year Turkey’s central bank left its main policy rate unchanged at 50.00% again today and the statement continued to emphasise the need to keep interest rates high for a prolonged period. While the consensus view is for …
Retail sales disappoint Poland’s activity data for April revealed that retail sales growth softened a bit more than expected last month, but that the weakness in industry in March was just a temporary blip. On balance, we remain comfortable with our …
The Bank of Korea left its policy rate on hold today (at 3.5%) and appeared to indicate that interest rates would not be cut until it was confident that inflation would fall back to target. Given our view that price pressures will ease further over the …
The results of India’s multi-week general election on 4th June aren’t expected to hold many surprises about the country’s next government, with polls suggesting Narendra Modi will win an unprecedented third term. But what influence could this election …
22nd May 2024
After exiting recession in Q1, Saudi Arabia’s economy should continue to expand over the rest of this year on the back of strong private non-oil growth and higher oil output. But next month’s OPEC meeting is likely to be a close call and if the group (led …
Economic growth strengthened across Emerging Europe in Q1, and leading indicators suggest that it has picked up further in most countries in Q2. With inflation likely to rise (or stay) above central banks’ targets in the second half of this year, the …
The sharp rise in Brazil’s goods exports and the widening of the trade surplus since 2019 have been a point of strength for the economy. But we think these will reverse course before long. This feeds into our below-consensus GDP growth forecasts and our …
21st May 2024
Easing cycle about to enter a slower phase The decision by the Hungarian central bank (MNB) to cut its base rate by 50bp again today, to 7.25%, will be followed by more cautious monetary easing over the rest of this year. We currently forecast just 100bp …
Some of the structural problems in China’s economy have their roots in its excessively high savings rate (and underconsumption). For many other EMs, savings rates are also a problem but for the opposite reason – they’re too low . This is particularly so …
India has been the star performer among major EMs over the past several quarters and the latest data suggest that the strength of economic activity has continued through to the general election. Headline inflation is grinding back to the RBI’s 4% target …
20th May 2024
The political turmoil in Vietnam, which has led to a number of key leaders being sacked from their posts, is undermining the country’s reputation for stability, which until now has been one of its key selling points to foreign investors. The political …
The death of Iran’s President Ebrahim Raisi yesterday creates greater uncertainty over the succession planning for the next Supreme Leader. But, taking a step back, the balance of political power within Iran means that there is unlikely to be a major …
Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks large variation in prospects at the country level, with many EMs experiencing a reversal of last year’s fortunes. While we expect the EM monetary …
Economy running hot in Q1, inflation pressures build further The 5.4% y/y rise in Russian GDP in Q1 was a touch stronger than expected and, taken together with the rise in inflation in April, adds further evidence to the view that the war effort is …
17th May 2024
Abinader again The Dominican Republic’s general election on Sunday is likely to buck Latin America’s anti-incumbency wave. Opinion polls point to current president Luis Abinader comfortably winning re-election. Indeed, some of the latest surveys put him …
Putin’s political shake-up and meeting with Xi There were two big developments in Russia this week. The first was the cabinet reshuffle, in which long-serving defence minister Sergei Shoigu was replaced by economist Andrei Belousov. A lot of ink has been …
Property support ramps up The PBOC today announced major changes to property controls, including removal of regulatory floors for mortgage rates and a lowering of the minimum downpayment to 15% for first homes and 25% for second homes, 5%-pts lower than …
Weak growth a concern for the central bank Bank Indonesia is the only central bank in the region with a mandate to ensure currency stability. While we had not been expecting the central bank to raise interest rates at its April meeting , the move didn’t …
Non-aligned policy to be tested in US-China divide This week we took a deep-dive into a topic that regularly comes up in our conversations with clients: how India positions itself in a fragmenting global economy. (See here .) Our analysis makes the point …
This page has been updated with additional analysis since first publication . Recovery hits a speed bump Industrial production continued to accelerate thanks to strong exports, but growth on most other indicators slowed, pointing to softer domestic …
For much of the past year, the dollar has strengthened against emerging market (EM) currencies even as EM sovereign dollar bond spreads have narrowed. One way or another, that is unlikely to last. One relatively unusual feature of the strengthening of the …
16th May 2024
Saudi’s gigaprojects stick or twist moment Comments from Saudi Arabia’s Finance Minister Mohammed Al-Jadaan this week have added to the growing discourse of whether the Kingdom can afford, both literally and figuratively, to continue with its vast suite …
India is benefitting economically from maintaining its historical non-aligned stance in response to tensions between the West and Russia, and Iran to a lesser extent. But notwithstanding a potential universal tariff on all US imports under a second Trump …
Government purchases of unsold housing may help to stabilise China’s property sector in the near-term, alleviating a key economic headwind. But they won’t prevent the sector from shrinking considerably further by the end of this decade. At its quarterly …
This page has been updated with additional analysis since first publication. Activity rebounds, but net trade remains a large drag The 14.1% q/q annualised rebound in Israeli GDP in Q1 was slightly weaker than expected and left GDP almost 3% below its …
The winner of Mexico’s presidential election on 2nd June will have a busy in-tray, from taking advantage of the opportunities presented by near-shoring to the challenges posed by Pemex. And that’s before they even consider the looming issue of a potential …
Overseas loans by Chinese banks peaked in late 2021 and have since been curtailed in response to increased debt problems among EM borrowers. While these strains are partly a consequence of global shocks, they have also underscored some flaws with China’s …
Our proprietary indicators provide a reliable and easy-to-interpret way to assess the risk that a country will experience a currency, banking or sovereign debt crisis within the next two years. This dashboard was last updated on 28th January 2025. If …
Global Economics Chart Pack (May 2024) …
15th May 2024
