The economy is in the midst of a recession triggered by a health crisis. That makes this recession unusual and different. Here we examine how this recession compares to previous recessions. From that we infer key features of the pandemic recovery. We conclude that demand in most commodity end-use sectors – construction and manufacturing – is likely to be more resilient than normal, because the COVID-19 recession is primarily a service sector recession. The automotive sector is an exception, however, and experiences a slower recovery in light of the structural challenges it faces with respect to climate policy. Read more
China will set out its major economic objectives and policy goals for 2020 at the National People’s Congress. We expect fiscal stimulus of 5-8% of nominal GDP to be announced, half the size of the stimulus that followed the GFC. Most of this stimulus will come in the form of bond issuance (e.g. special treasury bonds and local government special bonds). The biggest beneficiary of this stimulus will be the transport and infrastructure sectors. On monetary policy, we do not expect aggressive interest rate cuts or QE; but efforts will continue to ensure financial markets remain liquid, through lending targets and RRR cuts. Read more
WASHINGTON, D.C., UNITED STATES (SEPTEMBER 18, 2017) (IMF TV) – Bank of England Governor Mark Carney said on Monday (September 18) that Brexit is likely to hurt Britain’s growth prospects in the short term and push up inflation as the country adjusts to life outside the European Union. Continue reading
NOTTINGHAM, NOTTINGHAMSHIRE, UK (MAY 15, 2017) (BBC) – British inflation hit its highest level since September 2013 last month, extending its sharp rise since the vote to leave the European Union and tightening the squeeze on living costs as a national election approaches. Continue reading
U.S. President Donald Trump will again be centre of attention in the coming week with any policy statements, having helped put the Federal Reserve, Bank of England and other central banks in wait-and-see mode. Ciara Lee reports. Continue reading
Speaking at the Council of the Americas, IMF Managing Director Christine Lagarde says China needs to keep trying to rebalance its economy away from commodity-intensive investment but also must be careful to safeguard “demand and financial stability.”
(Reuters Business Report) – Don Quixote: a Spanish literary hero famous for tilting his lance at imaginary foes – like windmills.
Austerity though – that’s seen as a very real enemy.
Many Spaniards in solidarity with ordinary Greeks.
European Parliament President Martin Schulz doubts Greek banks will reopen this week, calls for emergency humanitarian aid for Greece and demands the government make meaningful proposals on its debt to stave off ‘dramatic’ times.
(Reuters Business Report) – There was no mistaking the mood in Athens in front of Parliament Sunday night.
Official figures show a whopping 61 percent of Greeks overwhelmingly rejected the terms of an international financial bailout… overturning opinion polls that had predicted an outcome too close to call.