Navigate the business cycle with confidence
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
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
Uneven regional growth continues to characterise the global economic landscape. The growth momentum is also not great. While there is closer convergence across the Atlantic, with Euro area growth steadily approaching that of the USA, where growth has been cooling down somewhat, the divergence between the advanced and developing economies has widened. Short-term forecasts in … Read more
The April/May economic indicators point to a slowing world economic growth momentum going into the second quarter. JP Morgan’s composite manufacturing PMI can in at a 21-month low in April. Slower US growth is compounded by slowing growth in emerging economies; China’s industrial sector is contracting and the Brazilian and Russian economies are mired in … Read more
The world economic picture remains mixed and uncertain. All regions are not only not firing on all cylinders, those that do are less than robust. Whereas the USA economy developed good momentum during the middle quarters of last year, some of that momentum was lost towards the end of the year and going into 2015. … Read more