The Lastest Macroeconomic News
11.11.2017 19:13 Automation Could Increase Global GDP by More Than $1 Trillion
Technological advances such as automation could increase global GDP by more than $1.1 trillion over the next 10-15 years, according to a new report from analysts at JPMorgan Asset Management seen exclusively by Business Insider. The asset management arm of banking giant JPMorgan believes that technological advances across all areas of society could lead to big productivity gains, which in turn will likely boost economic growth. “Technology will affect economic growth rates and capital market returns in ways that are difficult to foresee,” the report, authored by a team of strategists headed by John Bilton, JPMAM`s Head of Global Multi-Asset Strategy, argues. “Workforce automation and AI have the potential to deliver significant overall productivity gains, and some nations facing growth challenges from aging populations could see an additional boost to trend growth rates.”
08.11.2017 23:07 Unbalanced global growth
It is only too obvious that global capitalism is stagnant and relatively unstable. But nonetheless there is much hype currently being created around the recent “recovery” in some major advanced economies. In some cases, the desperation to suggest that economic activity is picking up has even relied on the fact that some previous projections are being slightly revised upwards. Consider, for example, the latest World Economic Outlook of the IMF (October 2017): “The pickup in growth projected in the April 2017 World Economic Outlook (WEO) is strengthening. The global growth forecast for 2017 and 2018 —3.6 per cent and 3.7 per cent, respectively — 0.1 percentage point higher in both years than in the April and July forecasts. Notable pickups in investment, trade, and industrial production, coupled with strengthening business and consumer confidence, are supporting the recovery.” It may seem a bit weird to celebrate a global rate of growth of output of 3.6 per cent when that is exactly the same as the rate achieved in 2014, when the IMF itself was so concerned about the secular stagnation that its managing director, Christine Lagarde, described as “the new normal”. But perhaps we are simply supposed to be relieved that this new normal persists and has not yet dissolved further or erupted into a crisis.
07.11.2017 23:13 EBRD lifts growth forecasts for Eastern Europe, Turkey and Russia
The European Bank for Reconstruction and Development sharply raised growth forecasts on Tuesday for the 37 countries in which it operates, saying improving exports, a revival in investment and firmer commodity prices were supporting a broad upswing. Average economic growth for the group, which ranges from Morocco to Mongolia, is now expected to hit 3.3 percent this year, compared to 2.4 percent the multilateral lender had forecast in May and 1.9 percent last year. Turkey and Poland, which have become two of the EBRD`s biggest markets since it stopped lending in Russia in 2014 in response to the Ukraine crisis, are seen among the biggest drivers of growth. The EBRD now sees Turkey growing at 5.1 percent this year and 3.5 percent in 2018. This year`s projection is almost double May`s forecast, which was lowered following April`s power grab by Turkish President Tayyip Erdogan. Russia, the largest economy the development bank looks at and a major influence on many of its others, has now pulled out of recession after a cumulative contraction of 3 percent over the last two years. The country is expected to see GDP growth of 1.8 and 1.7 percent in 2017 and 2018 respectively, though it could be more as Guriev said the forecasts did not capture the most recent leg up in prices for oil, Russia`s main export.
04.11.2017 00:23 Russian Economy Lost 18 Billion Rubles This Year Due to Lack of ICO Regulation
The Russian presidential adviser on Internet development, Herman Klimenko, has revealed that his country has lost approximately 18 billion rubles (roughly $310 million) due to a lack of ICO regulation so far this year, Tass reported on Thursday. The estimate came from the Russian Association of Blockchain and Cryptocurrency (Rabik). Klimenko announced the formation of this association back in August. It was created to unite participants in the cryptocurrency and blockchain space, including miners and investors. Rabik has estimated the loss to the Russian economy from the absence of legislative regulation of ICOs since early 2017 at 18 billion rubles, and 3.5 billion rubles have not been received to the federal budget since the beginning of the year as tax revenues. He explained that these calculations are based on ICOs conducted by Russian residents in foreign jurisdictions between January and October. “This money would be enough, for example, for new parking lots and tow trucks in Moscow,” he noted.
01.11.2017 15:22 UK economic growth dwarfed again by eurozone in third quarter
The eurozone`s economy once again grew faster than the UK`s in the third quarter of 2017, according to the latest data, confirming the divergence in economic fortunes between Britain and the continent as Brexit approaches in 2019. Eurostat estimated on Tuesday that the collective GDP of the 19 states of the single currency area grew by 0.6 per cent in the three months to September, faster than the 0.4 per cent growth registered by the UK over the same period. This follows eurozone GDP growth of 0.7 per cent in the second quarter, when the UK grew by just 0.3 per cent, also the weakest rate in the G7. On an annual basis the GDP growth divergence was even more stark, with the eurozone expanding by 2.5 per cent in the third quarter while UK growth was just 1.5 per cent. The eurozone is experiencing a cyclical recovery, after years of rolling financial crisis, while the UK has been hit this year by a rise in inflation stemming from the slump in sterling in the wake of last year`s Brexit vote.
31.10.2017 18:53 Russian retail sales to grow 1 pct in 2017, supporting economy
Russia retail sales are seen increasing more than 1 percent this year as rising incomes fuel consumer demand, supporting a fragile recovery in the wider economy. Retail sales plunged 5.2 percent last year as the economy was battered by lower oil prices and Western sanctions over Moscow`s actions in Ukraine. The median forecast of 22 analysts and economists polled by Reuters in the past week was for retail sales to rise by 1.1 percent year-on-year in 2017 and 2.3 percent in 2018. Stronger retail sales should help the economy grow by 1.8 percent this year, the poll showed. The improvement in living standards comes at a good time for Russian President Vladimir Putin, expected to run for re-election in March next year.
29.10.2017 20:27 Russia Central Bank Cuts Rate Again, Signals More
Russia`s central bank slashed its key interest rate for a second successive policy session and suggested that more reductions are likely, as policymakers remained worried about inflation overshooting the bank`s 4% target for this year. The Board of Directors decided to cut the key rate by 25 basis points to 8.25%, the Bank of Russia said in a statement on Friday. The reduction was in line with economists` expectations. In September, the bank had cut the rate by half a percentage point. The latest reduction was the fifth this year. "Medium-term risks of inflation overshooting the target dominate over the risks of its persistent downward deviation," the bank said. "In recognition of this, the Bank of Russia`s ongoing transition from moderately tight to neutral monetary policy is gradual."
26.10.2017 13:30 Poll: Global economy set to do better in 2018; not much inflation pressure
The global economy is on its best roll in years and set to do better in 2018, but economists in Reuters polls around the world mostly said synchronous growth is not about to spawn significant price pressures. Indeed, while several major central banks have shifted their bias away from ultra-easy monetary policy, with a few notable exceptions, inflation remains below their targets and is generally set to stay that way in the year ahead. "It is becoming a familiar refrain. Another quarter, another set of upward revisions to our global growth forecasts, another downward revision to our global inflation forecasts," said Janet Henry, global chief economist at HSBC. "But for developed world central banks, the task is getting ever harder. Tackling both low inflation and rising financial stability risks will demand a delicate balancing act by central banks and a more nuanced approach to inflation targeting if the global expansion is to be sustained." In Reuters surveys taken Oct 3-24 of more than 500 economists across Asia, Europe and the Americas, 2017 and 2018 growth forecasts for nearly three-quarters of the 48 economies polled were raised or left unchanged.
25.10.2017 17:15 Red October: Russia of 1917 and 2017 closer than might be expected
It is 100 years on Wednesday, using Russia`s old calendar, since Vladimir Lenin`s Bolsheviks stormed the Winter Palace in what is now St Petersburg and took power. Not a lot has changed. Well, not in economic terms, according to research by Renaissance Capital, an investment bank specializing in the region. It says the Russias of 1917 and 2017 have more in common than might be expected. Take, for example, debt. Just before the Red October revolution, around a third of Russian debt was held by foreigners. Same today. Pre-1917, foreigners got 5-8 percent dividend yields from Russian utility shares. Same today. Pre-Soviet Russia lagged the major world powers in industrial might, but was considered on a par with Brazil and Mexico. Pretty much the same as today. Raw materials were pre-1917 Russia`s mainstay, comprising two-thirds of its exports. It is still two-thirds in 2017, Renaissance, an emerging markets-focused investment bank, says.
23.10.2017 23:16 China Propels Global Economy Through Best Performance in Decade
China`s robust expansion is boosting a global economy that`s already racking up its best performance in a decade. China on Thursday announced that the world`s second-biggest economy expanded by 6.8 percent in the third quarter, following on from weekend musings from central bank governor Zhou Xiaochuan of a 7 percent pace for the second half. And in a sign the consensus view of a sharp slowdown next year is fading, Goldman Sachs economists raised their forecast for 2018`s expansion to 6.5 percent. Evidence of the upswing was on display in Asia Thursday: South Korea`s central bank lifted its economic growth estimate for 2017, Japanese exports grew by double digits for a third straight month in September and Australian unemployment unexpectedly dropped. The International Monetary Fund last week upgraded its growth outlook for the U.S., the euro area, Japan and China and said the global economy`s performing at its best pace in the last ten years.