Weak consumption may thwart Slovak growth plans

2016 ◽  
Keyword(s):  
Infrastructure Investment ◽  
Gdp Growth ◽  
Industrial Output ◽  
Short Term ◽  
Fiscal Deficits ◽  
Consumption Growth ◽  
Content Type ◽  
Low Levels ◽  
The Government ◽  
The Eu

Subject The government's latest GDP expectations for 2016-19. Significance On September 19, days before surviving a parliamentary no-confidence vote, the government announced GDP projections for 2016-19, based on improvements in consumption growth and the labour market, where registered unemployment hovers at historically low levels. Despite its weakened position following the recent departure of junior coalition partner Siet, Smer-Social Democracy (SD) is upbeat about the prospects for robust GDP growth in 2016, revising its forecast upwards to 3.6% from 3.2%. Impacts Industrial output, GDP and inflationary pressures may pick up post-2018, as consumers spend more and auto industry investments create jobs. The government may miss its targets in the short term, but fiscal deficits should remain below the EU limit of 3% of GDP in 2016-18. More public-private partnerships, modelled on the Bratislava ring-road, plus EU funding, may support infrastructure investment after 2017.

China may struggle to achieve a job-rich GDP recovery

2020 ◽  
Keyword(s):  
Economic Recovery ◽  
Gdp Growth ◽  
Export Demand ◽  
Industrial Output ◽  
Content Type ◽  
Defence Spending ◽  
The Government ◽  
First Time ◽  
People's Congress ◽  
Economic Outlook

Subject The economic outlook for China following the lifting of the COVID-19 lockdown. Significance The economic uncertainties due to the economic impact of the COVID-19 pandemic made this year’s National People’s Congress (NPC) unusually important. After GDP fell 6.8% year-on-year in the first quarter, the government for the first time announced no annual GDP growth target, indicating extreme uncertainty over the extent and durability of recovery. Impacts China’s industrial output will outpace export demand; trade tensions such as anti-dumping cases could rise. US-China tensions will rise, but both sides will be warier than last year of major moves that could jeopardise economic recovery. China’s commitment to high military spending is undiminished by its economic troubles; defence spending will rise as a share of GDP.

Mexico's weak GDP growth will outlast Pena Nieto

2016 ◽  
Keyword(s):  
Latin American ◽  
Economic Reforms ◽  
Gdp Growth ◽  
Short Term ◽  
Severe Problem ◽  
Content Type ◽  
World Economic ◽  
The Government ◽  
Latin American Countries ◽  
Economic Outlook

Subject GDP growth shows no sign of improving in the short-term. Significance In its most recent update to its World Economic Outlook, the IMF lowered its forecast for Mexico's 2016 GDP growth to 2.4% from 2.6% foreseen in January. This figure compares well with other Latin American countries -- notably Brazil and Venezuela -- yet it marks the continuation of a trend of meagre expansion that has characterised President Enrique Pena Nieto's time in office despite his efforts to introduce economic reforms. Impacts Further reform to encourage greater flexibility in the labour market will be key to increasing small business productivity. Low growth and a lack of prospects for the young will feed into Mexico's rising crime rates. The lack of growth could become a severe problem for the government both directly and indirectly in the 2018 election.

Polish VAT surge may subside from mid-2018

2017 ◽  
Keyword(s):  
Credit Rating ◽  
Value Added ◽  
Tax Revenue ◽  
Positive Trend ◽  
Government Budget ◽  
Short Term ◽  
Content Type ◽  
The Difference ◽  
The Government ◽  
The Eu

Significance Budget data for the first ten months show revenue from value-added tax (VAT) exceeding the forecast by 22%. That could help narrow Poland’s 'VAT gap' -- the difference between collected and potential taxes. Impacts Poland is likely to bring its VAT gap closer to the EU average in the short term. However, this positive trend may offer only a temporary reprieve for ruling PiS. Rising tax revenue will boost not only the government budget but also Poland’s credit rating.

Thailand’s democratic deficit will dampen GDP growth

2018 ◽  
Keyword(s):  
Public Spending ◽  
Gdp Growth ◽  
Democratic Deficit ◽  
National Strategy ◽  
Consumer Spending ◽  
Short Term ◽  
Domestic Activity ◽  
Content Type ◽  
The Government ◽  
The Impact

Subject Outlook for the Thai economy. Significance Thailand's GDP grew by 3.9% last year, the most since 2012, and is expected to remain at around 4.0% this year, with stronger public spending supporting surging tourism and solid consumer spending. Thailand’s National Strategy aims to raise GDP growth to 5-6%, but this ambition faces rising short-term risks and longer-term structural impediments. Impacts Despite rising pressure on the government to hold elections, protests will not grow, limiting the impact on spending and tourism. Automobiles, semiconductors and other electronics -- key Thai exports -- will be hit by deteriorating US-China relations. The Bank of Thailand is one South-east Asian central bank keen to ‘normalise’ rates, but higher rates could dampen domestic activity.

Ghana's government will struggle to satisfy voters

2018 ◽  
Keyword(s):  
Public Debt ◽  
Gdp Growth ◽  
Fiscal Consolidation ◽  
Short Term ◽  
Content Type ◽  
Younger Workers ◽  
Gdp Growth Rate ◽  
Macroeconomic Indicators ◽  
The Government ◽  
Cocoa Farmers

Subject The Ghanaian government's challenges Significance Almost 18 months after the New Patriotic Party (NPP) took office, there has been a notable uptick in Ghana's macroeconomic indicators, including an estimated doubling of the GDP growth rate to 8.5% in 2017. Additionally, inflation has lessened, fiscal consolidation targets are being met and public debt has declined. Notwithstanding these achievements, President Nana Akufo-Addo's flagship infrastructure promises have largely been unmet and growth for 2018 is estimated to decline to 6.3%. Impacts Unemployment, particularly among younger workers, will remain stubbornly high in the short term. The NPP will struggle to fulfil promises of improved conditions and prices for cocoa farmers amid fluctuating global prices. Improving tax revenues and collection, while not undermining popular or investor support, will prove a major challenge for the government.

Domestic factors will weigh on Central Europe’s autos

2018 ◽  
Keyword(s):  
The United States ◽  
Consumer Confidence ◽  
Gdp Growth ◽  
Foreign Trade Policy ◽  
Short Term ◽  
Content Type ◽  
Car Industry ◽  
Investor Confidence ◽  
Per Capita ◽  
The Eu

Subject Central Europe’s car industry. Significance The uncertainty surrounding US foreign trade policy has created headwinds to growth for Central Europe (CE) and its automotive sector, even though CE auto exports are highly concentrated on the EU, and CE has only limited trade exposure to the United States. Business and consumer confidence is patchy among some of the fastest-growing economies in the region, such as Poland. Impacts CE auto production will be an important driver of economic growth in 2018-19; Slovakia has the highest per capita auto production globally. Robust GDP growth should help partly offset declines in business or investor confidence in the short term. However, the worsening price competitiveness of the car industry will be a concern.

Czech monetary policy will shift in 2017

2016 ◽  
Keyword(s):  
Monetary Policy ◽  
Short Term ◽  
Fiscal Stimulus ◽  
The Czech Republic ◽  
Content Type ◽  
East European ◽  
Main Driver ◽  
Low Levels ◽  
The Government ◽  
Growth Deceleration

Subject The outlook for Czech monetary policy. Significance With second-quarter GDP growth slowing to 2.5% year-on-year, the Czech Republic is no longer the fastest-growing Central-East European (CEE) economy. The cyclical upswing that characterised the Czech economy from early 2014 has come to an end. Growth is foreseen to decelerate further in the quarters ahead, owing to unfavourable base effects and a larger-than-expected drop in EU-funded investment and manufacturing inventories. The government is thus expected to introduce short-term fiscal stimulus measures to support consumption. Impacts CEE central banks are expected to hold their rates at current historically low levels for the next quarter at least. Without room for further cuts, few will consider rate tightening before Q1 2017, when the ECB will start winding down quantitative easing. Growth deceleration in the second half of 2016 will necessitate fiscal stimulus by the government ahead of the 2017 general election. Further rises in nominal wages and a firmer labour market will bolster purchasing power, with private consumption the main driver of growth.

Spain could become more active in foreign relations

2017 ◽  
Keyword(s):  
Latin America ◽  
Foreign Relations ◽  
Prime Minister ◽  
Gdp Growth ◽  
Trade Policies ◽  
Content Type ◽  
Restrictive Trade ◽  
The World ◽  
The Government ◽  
The Eu

Subject Spain’s foreign policy. Significance Since centre-right Prime Minister Mariano Rajoy’s coming to power in 2011, foreign relations have played a secondary role in Spanish politics. The government has focused on strengthening its economic position within the EU, generally supporting Germany’s views. Its political and economic influence in other parts of the world such as Latin America has diminished significantly. Impacts Spain’s favourable economic prospects and high GDP growth rates may help the country improve its position within the EU. Passing the 2017 budget -- with the help of smaller parties -- later this year will boost the minority government’s credibility. Rajoy is benefiting from the Socialist Party’s internal divisions. The Ibero-American summits could become more relevant if Trump imposes more restrictive trade policies.

UK economic strategy could bring short-term results

2019 ◽  
Keyword(s):  
Free Trade Agreements ◽  
The United States ◽  
Short Term ◽  
Economic Strategy ◽  
Content Type ◽  
The Government ◽  
Fiscal Conservatism ◽  
Political Backlash ◽  
Economic Outlook ◽  
The Eu

Subject UK economic outlook. Significance The United Kingdom’s economic strategy under Prime Minister Boris Johnson signals a clear break with the fiscal conservatism of the last decade. In order to both boost productivity and growth, and address the political backlash against cuts to public services, the government has promised to implement significant spending increases and tax cuts. Impacts London's plans are to show the EU that it is ready for a no deal and opposition parties that the Conservatives are ready for elections. Extra borrowing will not cause significant market difficulties in the short term, even if there is a no-deal Brexit. A no-deal Brexit will increase significantly the pressure to strike free trade agreements with such countries as the United States.

COVID-19 crisis will interrupt Dominican GDP growth

2020 ◽  
Keyword(s):  
Latin America ◽  
Dominican Republic ◽  
Banking Sector ◽  
Target Range ◽  
Caribbean Region ◽  
Gdp Growth ◽  
Content Type ◽  
Financing Gap ◽  
Low Levels ◽  
The Government

Subject The Dominican Republic and COVID-19. Significance Unlike much of the Latin America/Caribbean region, the Dominican Republic faces the COVID-19 pandemic from a position of macroeconomic strength and stability. Growth lost pace in 2019 but was still robust at 5.1%, while inflation stayed within the Central Bank target range, at 3.7%. The banking sector remains well capitalised with non-performing loans at low levels (1.6%) at the end of last year. Impacts If the financing gap persists, the government will seek further credit in the markets, despite having to bear increasing yields. The general election will probably be postponed beyond July, with opposition candidate Luis Abinader likely to remain the frontrunner. An ongoing exodus of Haitians will continue, with unscreened incomers increasing contagion risks in Haiti.

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