The Lastest Macroeconomic News
09.07.2017 22:33 The global economy is doing something it hasn`t done in 7 years
All the major economies of the globe and the companies that make them up are picking up steam at the same time right now, the first such simultaneous recovery in years. This is making the phrase "global synchronous recovery" among the favorites of bulls on Wall Street. "We expect all the major markets to report healthy EPS growth in 2017. That`s the first synchronized upturn since 2010," wrote Robert Buckland, chief global equity strategist at Citi Research, in a note Tuesday. "That`s a big change compared to recent years, when we had various regions and countries moving in and out of EPS recessions," he added. Along with earnings growth, the major markets will see decent economic growth this year as well that will carry over into next year, Citi estimates. The research analysts forecast global GDP growth of 3.1 percent this year and 3.3 percent next year.
06.07.2017 21:58 Russia`s future looks bleak without economic and political reform
When the Russian president, Vladimir Putin, meets his US counterpart, Donald Trump, at this week`s G20 summit in Hamburg, he will not be doing so from a position of economic strength. To be sure, despite the steep drop in oil prices that began three years ago, Russia has managed to escape a deep financial crisis. But while the economy is enjoying a modest rebound after two years of deep recession, the future no longer seems as promising as its leadership thought just five years ago. Barring serious economic and political reform, that bodes ill for Putin`s ability to realise his strategic ambitions for Russia. Back in 2012, when Putin appeared onstage with the Nobel laureate economist Paul Krugman at a Moscow bank conference, Russia`s 1998 economic crisis seemed a distant memory. With oil prices well over $100 a barrel, the government`s coffers were bursting. So Putin could proudly contrast Russia`s government budget surplus with the large recession-driven deficits across the west. He surely delighted in having Russian audiences hear Krugman`s view that western democracies had come up badly short in handling the global financial crisis. In a different session, Russian academic economist Sergei Guriev (who later had to flee the country) argued there was no hope for diversification of Russia`s resource-based economy as long as institutions such as courts were so weak. Too many key decisions rested with one man. Speaking in the same session, I emphasised that without fundamental reforms, a sharp drop in global energy prices would create profound problems.
04.07.2017 11:15 All well for world economy at mid-year? Up to a point
So strong is the belief in the growth momentum of the global economy as it enters the second half of 2017, the point has been reached in the economic cycle where data not meeting expectations is dismissed as an aberration. Flash purchasing managers` indexes for services in Europe in June, for example, were weaker than anyone in a Reuters poll had predicted, but the market paid scant attention. "Way below expectations, but let`s not worry," was the mantra. Such economic Panglossianism - all for the best in the best of all worlds - is based on what seems to be a majority view among policymakers and economists that the world is enjoying a broad expansion. "Faster growth this year reflects a synchronized improvement across both advanced and emerging market economies," Brian Coulton, Fitch Ratings` chief economist, wrote in an outlook projecting 2017 would have the fastest world growth - 2.9 percent - since 2010. Backing up this view, central banks in the United States, euro zone and Britain are leaning toward tightening, albeit with a cacophony of mixed signals about when. Financial markets are now pricing in a 90 percent chance of a euro zone rate hike by July next year, for example, to go with the Federal Reserve`s ongoing upward tweaks. There are, however, some inconvenient trends out there that will need consideration in the second half.
02.07.2017 14:31 AI Will Add $15.7 Trillion to the Global Economy
Amid warnings of the economic disruption that robots and automation could unleash on the world economy as traditional roles disappear, researchers are finding that new technologies will help fuel global growth as productivity and consumption soar. AI will contribute as much as $15.7 trillion to the world economy by 2030, according to a PwC report Wednesday. That`s more than the current combined output of China and India. Gains would be split between $6.6 trillion from increased productivity as businesses automate processes and augment their labor forces with new AI technology, and $9.1 trillion from consumption side-effects as shoppers snap up personalized and higher-quality goods, according to the report.
29.06.2017 22:12 Russia central bank sees GDP up 1.3-1.8 pct y/y in Q3
The Russian economy is expected to grow by 1.3-1.8 percent year on year in the third quarter of 2017 thanks to recovering consumer demand, the central bank said on Thursday. In the second quarter, gross domestic product is expected to grow by up to 1.3 percent thanks to a quicker-than-expected recovery in industrial output, the central bank said in a regular report on the economy. Economic growth will also be accompanied by increasing investment activity. Capital investment, the second most important economic driver after consumer demand, was seen growing by 3-5 percent on the year in the second quarter after rising by 2.3 percent in the first quarter, the central bank said.
27.06.2017 18:25 IMF Cuts U.S. Outlook, Calls Trump`s Growth Target Unlikely
The International Monetary Fund cut its outlook for the U.S. economy, removing assumptions of President Donald Trump`s plans to cut taxes and boost infrastructure spending to spur growth. The IMF reduced its forecast for U.S. growth this year to 2.1 percent, from 2.3 percent in the fund`s April update to its world economic outlook. The Washington-based fund also cut its projection for U.S. growth next year to 2.1 percent, from 2.5 percent in April. The world`s biggest economy will probably have a hard time hitting Trump`s target of 3 percent annual growth as it`s faced with problems ranging from an aging population to low productivity growth, and with a labor market already back at full employment, the fund said in its annual assessment of the U.S. economy released Tuesday. The IMF`s assessment casts doubt over a more optimistic forecast in the White House budget proposal, which projects growth will accelerate to 3 percent by 2020 and keep up that pace for seven more years. Even with an “ideal constellation of pro-growth policies, the potential growth dividend is likely to be less than that projected in the budget and will take longer to materialize,” the IMF said in a statement Tuesday.
25.06.2017 22:28 With oil washing out, Russia`s zeal to reform remains elusive
Stubbornly cheap oil prices - which this week probed their lowest levels since August despite OPEC`s best intentions - have created a new world order for crude production powerhouses like Russia and Saudi Arabia. Although the latter is pursuing a bold reform agenda, punctuated this week by a dramatic leadership shake-up, the former copes by flexing its geopolitical muscles in a way that successfully diverts from economic worries at home. A Pew Research poll published this week revealed a few cracks in President Vladimir Putin`s Teflon on domestic issues. Although Putin retains overwhelming majority support, his ratings on energy policy and the economy have fallen by double digits over the last two years, Pew found.
23.06.2017 19:35 Modi`s India The World`s 4th Fastest Growing Economy in 2017
Prime Minister Modi`s currency experimentation has not stopped India`s vibrant economy, which is the world`s fourth fastest growing economy in the world thus far in 2017. That`s according to the World Bank`s latest edition of Global Economic Prospects. For 2017, India`s economy is expected to advance 7.2%. That`s slightly above the country`s long-term growth. GDP Annual Growth Rate in India averaged 6.12% from 1951 until 2017, reaching an all time high of 11.40% in the first quarter of 2010 and a record low of -5.20% in the fourth quarter of 1979, according to Tradingeconomics.com. The Indian economy has benefited from a stable macroeconomic environment of low inflation and interest rates, which has helped shake off a temporary slow-down in consumer spending and a drop in investment that followed the demonetization program back in November 2016 -- which took 86% of the country`s currency out of circulation.
21.06.2017 13:52 Russia`s economic data for May point to gradual recovery
Russian economic indicators improved further in May, suggesting an economy battered by weak oil prices and Western sanctions is finally recovering. Reports on Tuesday showed retail sales rose, real wages increased and unemployment fell last month - more evidence that the Russian economy will grow this year, after two years of recession. "Most indicators remain weak, but they are stronger than they used to be and are above consensus. So we are clearly talking about an acceleration of growth, rather than stagnation," said Vladimir Osakovsky, an economist at Bank of America Merill Lynch in Moscow. Retail sales, a gauge for consumer demand, grew 0.7 percent on the year in May, exceeding analysts` forecasts for 0.5 percent growth. The monthly increase was the second in a row, after more than a year of contraction. "The long-awaited start of a consumer recovery is clearly the most positive news," Osakovsky said.
19.06.2017 23:00 Oil`s Risk to the Russian Ruble
Which of the following is expected to be the biggest challenge facing the ruble in the coming year? 1. Market structure changes. 2. Russian Central bank politics. 3. Navigating Geopolitical challenges? 4. Vodka prices. 5. Oil? If you said vodka prices then you were totally wrong. That was a joke, since everyone knows that Vodka is priceless in Russia. The answer is oil. Russia has one of the largest petroleum industries in the world. It has been blessed with many natural resources, including the largest reserve of natural gas, the second largest Coal reserve, and the eighth largest oil reserve. However, the ruble was seriously impacted by the low oil prices over the last few years. A recent survey conducted by Bloomberg survey on foreign exchange (FX) executives showed that 51% believe that oil prices will have the biggest effect on the ruble.