93digital 
The legacy of the massive fiscal response to the pandemic is ballooning government debt. From 2019 to today, average government debt has leapt by 9% of GDP in emerging markets (EMs) and a whopping 20% in advanced economies (AEs). Now, average debt-to-GDP ratios are over 60% in EMs and double that in AEs.
Remittances are an important source of income for families in Central America and the Caribbean, funding more than 20% of total household consumption in several countries. During 2020, Latin America and the Caribbean was the only region to enjoy an increase in workers’ remittances.
Remittances are an important source of income for families in Central America and the Caribbean, funding more than 20% of total household consumption in several countries. During 2020, Latin America and the Caribbean was the only region to enjoy an increase in workers’ remittances.
We forecast a permanent hit to Singapore’s population after two consecutive years of contraction in which border closures restricted regular inflows of foreign workers and residents living abroad. We now expect the population level to be permanently 2.6% below our pre-Covid baseline by 2030.
We forecast a permanent hit to Singapore’s population after two consecutive years of contraction in which border closures restricted regular inflows of foreign workers and residents living abroad. We now expect the population level to be permanently 2.6% below our pre-Covid baseline by 2030.
Previous work identified which goods exports would be most affected by sanctions from China by constructing a ‘vulnerability score’ for each product. A product is considered to be more vulnerable if a large share of exports go to China and if China’s share of global imports is large. On the supply side, goods are more vulnerable if Australia makes up a small share of Chinese imports and a small share of global exports.
Previous work identified which goods exports would be most affected by sanctions from China by constructing a ‘vulnerability score’ for each product. A product is considered to be more vulnerable if a large share of exports go to China and if China’s share of global imports is large. On the supply side, goods are more vulnerable if Australia makes up a small share of Chinese imports and a small share of global exports.
Europe’s tourism sector made solid strides towards recovery this summer. In July, overnight stays reached just above 70% of 2019 levels, on track to meeting our call of 75%-85% of 2019 levels by August. Our Tourism Tracker shows that tourism is enjoying a longer-than-usual season, with activity remaining strong from August through to October.
Europe’s tourism sector made solid strides towards recovery this summer. In July, overnight stays reached just above 70% of 2019 levels, on track to meeting our call of 75%-85% of 2019 levels by August. Our Tourism Tracker shows that tourism is enjoying a longer-than-usual season, with activity remaining strong from August through to October.
GDP for the eurozone surprised on the upside in Q3 with growth of 2.2% q/q, slightly up from Q2. The surprise came mainly from France and Italy, while Spain disappointed. Overall, the eurozone has had a relatively healthy summer, but it is now clear that growth will start to slow sharply in Q4.
GDP for the eurozone surprised on the upside in Q3 with growth of 2.2% q/q, slightly up from Q2. The surprise came mainly from France and Italy, while Spain disappointed. Overall, the eurozone has had a relatively healthy summer, but it is now clear that growth will start to slow sharply in Q4.
The Bank of Japan (BoJ) left monetary policy unchanged at today’s (28th October) meeting, retaining current short- and long-term interest rate levels. There were no surprises in the BoJ’s quarterly Outlook Report, either. Growth forecast for FY2021 has been revised down modestly due to weak consumption in summer and the effect of a chip shortage. As expected, inflation forecasts for FY2021 have been revised down by 0.6ppts due to the rebasing of the CPI in August which has amplified the impact of the March 2021 cut in mobile-phone rates.
The Bank of Japan (BoJ) left monetary policy unchanged at today’s (28th October) meeting, retaining current short- and long-term interest rate levels. There were no surprises in the BoJ’s quarterly Outlook Report, either. Growth forecast for FY2021 has been revised down modestly due to weak consumption in summer and the effect of a chip shortage. As expected, inflation forecasts for FY2021 have been revised down by 0.6ppts due to the rebasing of the CPI in August which has amplified the impact of the March 2021 cut in mobile-phone rates.
China’s growth slowdown will dampen economic activity across the APAC region. But the full extent of the impact will be determined by each country’s specific trade linkages to the Chinese economy.
China’s growth slowdown will dampen economic activity across the APAC region. But the full extent of the impact will be determined by each country’s specific trade linkages to the Chinese economy.
Rock-bottom mortgage rates and a pandemic-driven shift in buyer preferences have triggered a burst of housing demand that has run hard against a severe lack of supply, causing house prices to explode. Meanwhile, investors, house ‘flippers,’ and speculators, which according to the Bank of Canada account for over 20% of home purchases, have aggravated the severe demand-supply imbalance catapulting home prices nearly 40% higher than pre-pandemic levels.
Based on our Housing Affordability Index, sky-high prices have pushed the average Canadian home 14% above what median-income households can afford—a three-decade high. And it’s likely to worsen. Even with plateauing house prices in our baseline forecast, we expect rising mortgage rates will push house prices more than 20% above affordability for the typical Canadian household by the end of 2022.
As of the September 2021 jobs report, leisure and hospitality employment sits 9% below its pre-pandemic level; this is three percentage points worse than the next hardest-hit industry. After averaging 349,000 new L&H jobs per month between January and July 2021, the pace slowed to an average of just 56,000 new L&H jobs in both August and September 2021–a rate that would delay recovery until early 2023.
As of the September 2021 jobs report, leisure and hospitality employment sits 9% below its pre-pandemic level; this is three percentage points worse than the next hardest-hit industry. After averaging 349,000 new L&H jobs per month between January and July 2021, the pace slowed to an average of just 56,000 new L&H jobs in both August and September 2021–a rate that would delay recovery until early 2023.
The CBR today surprised the market and us with a 75bp hike, which brought the policy rate to 7.50%. The CBR language has remained hawkish, suggesting that another hike may be on the cards in December.
The CBR today surprised the market and us with a 75bp hike, which brought the policy rate to 7.50%. The CBR language has remained hawkish, suggesting that another hike may be on the cards in December.
We have lowered our 2021 mainland GDP growth forecast to 3.9% from 4.1% previously after a softer-than-expected expansion in July. GDP rose by 1.1% m/m in August due to a very strong month for fishing. After a solid rebound in Q3, we expect growth to moderate but remain firm.
We have lowered our 2021 mainland GDP growth forecast to 3.9% from 4.1% previously after a softer-than-expected expansion in July. GDP rose by 1.1% m/m in August due to a very strong month for fishing. After a solid rebound in Q3, we expect growth to moderate but remain firm.
We forecast that over the period 2020-22 Shenzhen will be the fastest growing of the world’s major cities, not only in terms of GDP growth, but also with respect to office-based employment. Shenzhen is of course primarily a tech city, and in the US it is also the tech cities of Seattle, San Francisco and especially San Jose which stand out. Within Europe, London is the strongest performer in 2022, but over the full period 2020-22 it is Warsaw that leads.
We forecast that over the period 2020-22 Shenzhen will be the fastest growing of the world’s major cities, not only in terms of GDP growth, but also with respect to office-based employment. Shenzhen is of course primarily a tech city, and in the US it is also the tech cities of Seattle, San Francisco and especially San Jose which stand out. Within Europe, London is the strongest performer in 2022, but over the full period 2020-22 it is Warsaw that leads.
We don’t expect any policy changes to emerge from the October ECB meeting as key policy decisions are closely tied to updated macroeconomic projections due in December. However, this week’s meeting will clearly set the tone as the council will intensify a likely controversial debate about the inflation outlook.
We don’t expect any policy changes to emerge from the October ECB meeting as key policy decisions are closely tied to updated macroeconomic projections due in December. However, this week’s meeting will clearly set the tone as the council will intensify a likely controversial debate about the inflation outlook.
Rising odds of an early rate hike have brought the BoE’s guidance on when it will start reversing course on asset purchases into sharper focus. Market rate pricing currently suggest that reinvestments could cease as early as spring 2022, although we think August next year is more likely.
Rising odds of an early rate hike have brought the BoE’s guidance on when it will start reversing course on asset purchases into sharper focus. Market rate pricing currently suggest that reinvestments could cease as early as spring 2022, although we think August next year is more likely.
This report assesses the global ferry fleet and estimates its economic contribution across regions of the world.
The week was full of events that could potentially become policy shakers. While the PMIs showed economic growth keeps cooling, energy prices continued to soar, prompting governments to find further offsetting measures to protect purchasing power.
The week was full of events that could potentially become policy shakers. While the PMIs showed economic growth keeps cooling, energy prices continued to soar, prompting governments to find further offsetting measures to protect purchasing power.
The recent escalation of the conflict between Poland and the European Union has significantly increased the odds of a decisive response from the EU. The EU’s most powerful bargaining chip are the NGEU and structural funds of which a total of around €110bn (22% of GDP) was allocated to Poland over the 2021-2027 period.
The recent escalation of the conflict between Poland and the European Union has significantly increased the odds of a decisive response from the EU. The EU’s most powerful bargaining chip are the NGEU and structural funds of which a total of around €110bn (22% of GDP) was allocated to Poland over the 2021-2027 period.
The IMF’s updated GDP growth projection for MENA is largely in line with our baseline, although we are more optimistic than the Fund on the GCC. The IMF has nudged its overall 2021 forecast up by 0.1pp to 4.1%, while the 2022 figure has been raised by 0.4 pp to 4.1% (versus our projections of 3.9% and 4.3% respectively). The Fund sees the GCC growing by 4.2% next year, slower than our forecast of 5.1%.
The IMF’s updated GDP growth projection for MENA is largely in line with our baseline, although we are more optimistic than the Fund on the GCC. The IMF has nudged its overall 2021 forecast up by 0.1pp to 4.1%, while the 2022 figure has been raised by 0.4 pp to 4.1% (versus our projections of 3.9% and 4.3% respectively). The Fund sees the GCC growing by 4.2% next year, slower than our forecast of 5.1%.
Not a day goes by without a fresh headline about the mix of supply-chain bottlenecks that continues to disrupt industrial production worldwide. And it seems as if any news about easing disruptions is immediately overshadowed by new problems emerging elsewhere. Power crunches in China hampering the production of export goods are only the latest chapter in the supply chain chaos saga. Here are three things you should know about the global issue.
