Navigate the business cycle with confidence
From the end of 2016 and early 2017 it became clearer that the world economy was picking up nicely. Whilst 17Q1 witnessed some (temporary) slowing in the US, Euro area and Japanese growth surprised on the upside. China’s growth also continued close to 7% and the remainder of the emerging market universe recovered from the … Read more
From a solid start in January, the world economy seems to have moved up a gear during February. Renewed momentum is particularly evident in the Euro area and Japan (where flash PMI’s have hit multi-year highs in February). India is also moving beyond its policy-induced slowdown towards the end of last year and Brazil and … Read more
A key drag on post-2009 world economic growth has been high debt levels across the globe. The major advanced economies are faced with debt-to-GDP ratios exceeding 350%; in fact, the total debt-to-GDP ratio for advanced economies have stabilised around 385% from 2010 according to the World Bank, with that of Japan exceeding 400%[1]. In the … Read more
Global real GDP growth averaged 2.8% per annum over the period 2010-15. We forecast 2.7% per annum over the 2016-21 period revised from 2.8% previously. The adverse short-term impact of Brexit and the adjustment in our forecast for China shaved 0.1% from the 5-year projected average. Offsetting the downward revision was an upward adjustment to … Read more
Whereas a focus on the business cycle has a three to five year time horizon, we can also identify longer cycles of economic activity. A wide literature exists on the incidence of the so-called Kondratief cycles, i.e. long-term economic cycles with a focus of over 20-30 years. These longer term technologically driven cycles often give … Read more
The current low growth trap of the SA economy is a worry. Closer inspection reveals that both weak global growth and domestic supply side factors may explain the sluggishness in growth. Globally, trend growth rates in both advanced and developing economies are being scaled down and growth forecasts are being adjusted downwards. Excluding the recession … Read more
Current economic situation unsatisfactory As we consider the world economic outlook, the fact is that the growth slowdown, which became more prominent towards the end of last year, continued during April 2016. Amidst some regional variances, the global industrial sector has all but grinded to a halt. The global services sector is still expanding; however, … Read more
Regional disparities in growth momentum remains a dominant theme regarding the global economic outlook. US and Euro area economic activity continues to expand, albeit that some loss of momentum is evident in the US industrial sector. It seems likely that Japan has registered two consecutive quarters of negative growth (middle quarters of 2015) and the … Read more
The global economy lost momentum in September 2015 and during the third quarter of the year. The drag from China and large and oil-exporting emerging market economies is at the forefront of this slowdown. The growth momentum in the Euro area is holding up, while that in the USA has also moderated somewhat due to … Read more
In its July Update of the World Economic Outlook, the IMF concludes “The projected pick-up in global growth … has not yet firmly materialised”. The US economic recovery has been hit by the combination of a stronger dollar and the sharply lower oil price (albeit that both these factors have tended to reverse of late); … Read more