Swiss economic growth is set to accelerate this year

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Labour Market ◽  
Private Consumption ◽  
Private Investment ◽  
Gdp Growth ◽  
Consumption Growth ◽  
Content Type ◽  
Low Interest Rates ◽  
Economic Outlook

Subject Economic outlook for Switzerland. Significance Switzerland’s GDP growth disappointed in the first quarter of 2017: it increased by 0.3% on a quarterly and 1.1% on a yearly basis, held back by weak private consumption growth. However, exports rebounded after the long blight of the 2015 franc appreciation shock. Impacts Private consumption should improve after stagnating in 2015-16, benefiting from the labour market recovery. Low interest rates are likely to boost private investment. Chemicals, pharmaceuticals, engineering, electrics and the watch-making industry are likely to benefit from the expected revival in exports. Inflation is likely to average around 0.4% in 2017 and 2018.

Mexico’s 2020 budget looks highly optimistic

2019 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Oil Price ◽  
Gdp Growth ◽  
Fiscal Deficit ◽  
Limited Effect ◽  
Content Type ◽  
National Budget ◽  
National Economic

Significance The package comprises the national budget and revenue legislation, as well as key domestic and international macroeconomic assumptions and projections. Impacts Even if GDP growth remains poor, fiscal loosening is unlikely. The central bank may lower interest rates further to help boost the economy, but the effect of a monetary push would be relatively minor. Major projects such as the Maya Train may have some regional impact but will have a limited effect on national economic growth. Legislators may increase the expected oil price for 2020 to boost spending in some areas without increasing the fiscal deficit target.

El Salvador majority to ease external funding access

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Private Consumption ◽  
Separation Of Powers ◽  
Oil Prices ◽  
Economic Recovery ◽  
External Funding ◽  
National Unity ◽  
Checks And Balances ◽  
Content Type ◽  
Low Interest Rates

Significance The five seats obtained by its allies, the Gran Alianza por la Unidad Nacional (Grand Alliance for National Unity) will cement the majority further. This concentration of power will improve the government’s ability to implement policies, but may jeopardise El Salvador's separation of powers and political checks and balances. Impacts Concerns about democratic and media freedoms may increase as Bukele strengthens his position. Prices will pick up this year, fuelled by recovering demand, higher oil prices and low interest rates. Remittances will remain resilient on the back of US economic recovery, supporting strengthening private consumption.

Investment will be key for continuing Polish growth

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Private Consumption ◽  
Foreign Currency ◽  
Public Investment ◽  
Second Phase ◽  
Fiscal Deficit ◽  
Content Type ◽  
Reform Agenda ◽  
Low Interest Rates ◽  
The Government

Subject The second phase of the government's reform agenda. Significance The closing months of 2016 promise to be busy as the government pushes several pieces of legislation through parliament, in line with election promises. These include the long-awaited bill on converting foreign-currency mortgages denominated in Swiss francs and a revised budget for 2017. Impacts The fiscal deficit is likely to be contained within the EU's 3% limit in 2016-17 but rise beyond that threshold in 2018. Until infrastructure-led investment takes effect, low interest rates and a strong labour market may help private consumption support growth. As more state-owned companies look to invest in ageing infrastructure, public investment will become a key growth driver after 2018.

Japan's economic outlook brightens as growth continues

2017 ◽  
Keyword(s):  
Interest Rates ◽  
Raw Materials ◽  
Bank Lending ◽  
Labour Markets ◽  
Business Failure ◽  
Content Type ◽  
Bank Of Japan ◽  
Low Interest Rates ◽  
Low Levels ◽  
Economic Outlook

Subject The economic outlook for Japan. Significance Japan’s GDP rose 1.0% for the calendar year 2016 and the fourth quarter (annualised). Although the latest quarter decelerated from the pace of the earlier part of the year, the economy has now experienced four straight quarters of growth, the longest stretch since 2013. Impacts Higher wages arising from tighter labour markets will eventually push up prices, the four-year goal of the Bank of Japan. Low interest rates, rising investment and historically low levels of business failure support bank lending and demand for loans. The apparent end of a raw materials glut is bringing foreign demand back to Japan’s exporters; this should continue.

Economic growth in Spain is set to slow down

2016 ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Housing Market ◽  
Public Debt ◽  
Job Creation ◽  
European Countries ◽  
Medium Term ◽  
Content Type ◽  
Sustained Growth ◽  
Low Interest Rates

Significance Despite the absence of an effective government since December, the economy has maintained growth above an annualised 3%, higher than in most other Western European countries. Impacts Sustained growth will enable further job creation and reduce unemployment. Low interest rates and higher employment will support demand, especially in the housing market. Public debt will remain high in the short-to-medium term and the deficit will not be reduced to below 3% until 2018, dragging on growth. There is little macroeconomic space for further stimulus, although both the PP and Citizens have pledged to reduce taxes.

Virus will stymie Seoul's economic recovery hopes

2020 ◽  
Keyword(s):  
South Korea ◽  
Interest Rates ◽  
Economic Recovery ◽  
Gdp Growth ◽  
Content Type ◽  
Finance Minister ◽  
Percentage Points ◽  
Monthly Total ◽  
Real Estate Prices ◽  
Economic Outlook

Subject The economic outlook for South Korea in 2020. Significance Hong Nam-ki, South Korea’s finance minister and deputy premier for economic affairs, admitted on February 3 that the coronavirus outbreak in China could cut South Korea’s GDP growth by up to 0.7 percentage points this year. Hyundai and other carmakers are already suspending production, owing to shortages of key components sourced from China. Impacts The risk to South Korea is less from illness than economic disruption, principally disrupted supply chains and reduced consumption. Tourism is especially vulnerable to damage by individual and collective responses to the coronavirus. GDP growth this year will fall below 2019’s 2%, already the slowest figure since 2009. Demographic pressures are growing, as highlighted by November’s lowest-ever monthly total of births. Moon’s bid to curb real estate prices may inhibit the nominally independent central bank from cutting interest rates to boost demand.

High numbers of unproductive firms will cut GDP growth

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Job Retention ◽  
Gdp Growth ◽  
New Firms ◽  
Worker Mobility ◽  
Content Type ◽  
Us Studies ◽  
Low Interest Rates

Significance Low interest rates and easy financing conditions in major economies have triggered a search for yield on the part of investors flushed with liquidity and this has allowed so-called 'zombie' companies -- whose operating profits are not sufficient to service their debt -- to obtain financing to stay in business. Impacts Estimates of the zombie problem's scale may be understated, if unlisted small and medium-sized firms are worse affected than listed ones. US studies find that having fewer new firms in an industry cuts business dynamism and worker mobility, as well as sustaining zombie firms. The more unproductive zombie jobs that Europe’s job retention schemes keep alive, the lower longer-term productivity will be.

Australia budget keeps defence spending commitments

2021 ◽  
Keyword(s):  
South China Sea ◽  
Interest Rates ◽  
Fiscal Year ◽  
National Politics ◽  
Content Type ◽  
Defence Spending ◽  
Low Interest Rates ◽  
Defence Expenditure ◽  
Conducive Environment ◽  
Made In

Significance With an election due soon, the governing Liberal-National Coalition’s pledge to ring-fence the defence spending commitments made in 2016 was under some pressure. However, defence spending in fiscal year 2021/22 will grow by over 4% in real terms and stay above the symbolic level of 2% of GDP. Impacts Growing popular and bipartisan concern with Chinese aggression is a conducive environment for increased defence spending. Low interest rates and a stronger Australian dollar are also supporting sustained levels of defence expenditure. Washington may increase pressure on Australia to conduct freedom of navigation exercises in the South China Sea. Major business groups are concerned that increased criticism of China in national politics will produce yet more punitive backlash.

Australian central bank holds rate as growth slips

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Labour Markets ◽  
Content Type ◽  
Commercial Lenders ◽  
The Government ◽  
Roll Out ◽  
Growth Forecasts

Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.

Large US household balance sheets pose macro risks

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Health Costs ◽  
Gdp Growth ◽  
Lower Growth ◽  
Content Type ◽  
Balance Sheets ◽  
Trade Growth ◽  
Productivity Gains ◽  
Macroeconomic Risks

Significance An examination of the factors behind the expansion indicates that outsized balance sheets will persist and will pose a number of macroeconomic risks. Impacts Slower workforce growth will pressure GDP growth, trade growth and long-term interest rates, unless productivity gains can offset this. A record number of US business deaths and births in 2020 will affect productivity and have unpredictable impacts on the economy. Lower growth makes it harder to stabilise debt-to-GDP ratios, just as pension and health costs rise as populations age in major economies.

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