Navigate the business cycle with confidence
There is something scary about the latest inflation numbers around the world. US producer inflation reached 17.9% in March; that in Germany has shot up to 30%; locally, PPI inflation accelerated above expectation to 11.9%. Consumer inflation has followed, particularly in the goods department. US CPI inflation has accelerated to 8.6% (from 2.3% pre-covid); locally, … Read more
Inflation has spiked in the US economy (and elsewhere) in recent months. The spike follows on the unprecedented economic shock in 2020 tied to the COVID-19 pandemic, when the global economy ground to a halt for almost six weeks, including intermittent lock down measures since. This disturbance of normal market forces and production value chains … Read more
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
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