Research Briefing | Jun 22, 2021

Global | Mid-2021: the evolving outlook for cities around the world

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We will publish our latest city forecasts at the end of June, showing that for the world’s major cities, 2020’s GDP declines will be mostly reversed by 2022. There will be a one-off permanent loss of output, but not a change of direction.

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Research Briefing | Jun 22, 2021

Global | Mid-2021: the evolving outlook for cities around the world

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Research Briefing | Jun 22, 2021

Japan | BoJ introduces new scheme to address climate change

Research Briefing: BoJ introduces new scheme to address climate change

Beyond leaving monetary policy settings unchanged at meeting on 18th June, the Bank of Japan also extended the deadline of its funding-for-lending scheme targeted at the victims of pandemic to March 2022 from September 2021. With additional incentives from the tweaked reserve-tiering system, the scheme will encourage banks to support firms’ balance-sheet adjustment in coming years.

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Research Briefing | Jun 22, 2021

Japan | BoJ introduces new scheme to address climate change

Research Briefing: BoJ introduces new scheme to address climate change

Blog|21 June 2021

Social media influencers get real—and big brands are following

Sundus Alfi

Senior Editor, Thought Leadership

It has been a tough few years for truth, trust, and authenticity online. Between a global pandemic and broader social, political, and economic unrest, social media influencers—and the brands they work with—found themselves under strict scrutiny from their audiences, expected to balance the responsibilities of influencing with the realities around them. Yet despite the turbulence, these influencers have persevered and even thrived—and will almost certainly continue to do so into the future.

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Research Briefing | Jun 21, 2021

Global | Booming house prices add to inflation concerns

Ipad Frame_Global-Booming house prices add to inflation concerns

Rapid house price rises are feeding into a broader asset price boom that’s the strongest in decades and also unusually synchronised across assets. This trend has potentially large macroeconomic effects. Recent asset booms haven’t generally been inflationary, but the current one, alongside other upward pressures on prices, adds to the need for central bank vigilance.

What you will learn:

House prices are growing at over 10% y/y in many major economies, with real prices across the advanced economies climbing at the fastest pace since the peak of 2005.
The housing surge is part of a broader asset boom encompassing stocks and commodities. US stocks already looked overvalued before the pandemic, but the current asset price surge is the biggest in decades and also unusually synchronised across assets.
The asset price boom has potentially large impacts on spending. We forecast US household wealth will rise around 20% this year, a record pace, which could add about 2% to consumer spending.

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Research Briefing | Jun 21, 2021

Global | Booming house prices add to inflation concerns

Ipad Frame_Global-Booming house prices add to inflation concerns

What you will learn:

House prices are growing at over 10% y/y in many major economies, with real prices across the advanced economies climbing at the fastest pace since the peak of 2005.
The housing surge is part of a broader asset boom encompassing stocks and commodities. US stocks already looked overvalued before the pandemic, but the current asset price surge is the biggest in decades and also unusually synchronised across assets.
The asset price boom has potentially large impacts on spending. We forecast US household wealth will rise around 20% this year, a record pace, which could add about 2% to consumer spending.

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Research Briefing | Jun 18, 2021

Eurozone | The winners and losers from global tax reform

Ipad Frame_Eurozone - The winners and losers from global tax reform

If implemented, the global tax reforms agreed at this month’s G7 meeting would set a floor for corporate tax rates and enable countries to tax companies where they generate income. According to our modelling, the winners in Europe will far outnumber the losers, with the largest economies likely to benefit the most.

What you will learn:

For the four countries that will be worst affected by the reforms, our modelling points to large hits to their public finances. Three – Luxembourg, Netherlands, and Hungary – have relatively healthy public finances and the impact looks manageable.
The reforms will leave Ireland as one of the most highly-indebted economies in Europe, based on a public debt to modified GNI metric.
For the eurozone the net impact on debt-to-GDP ratios is positive, with an average 0.4ppts improvement, driven by the largest economies.

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Research Briefing | Jun 18, 2021

Eurozone | The winners and losers from global tax reform

Ipad Frame_Eurozone - The winners and losers from global tax reform

What you will learn:

For the four countries that will be worst affected by the reforms, our modelling points to large hits to their public finances. Three – Luxembourg, Netherlands, and Hungary – have relatively healthy public finances and the impact looks manageable.
The reforms will leave Ireland as one of the most highly-indebted economies in Europe, based on a public debt to modified GNI metric.
For the eurozone the net impact on debt-to-GDP ratios is positive, with an average 0.4ppts improvement, driven by the largest economies.

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Research Briefing | Jun 18, 2021

US | Don’t fret, the workers will be back

The first page of Oxford Economics' Research Briefing titled don’t fret, the workers will be back

Talk of US labor shortages is everywhere. But rather than a shortage, we see a transitory mismatch between the supply and demand of workers in sectors most affected by the pandemic.

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Research Briefing | Jun 18, 2021

US | Don’t fret, the workers will be back

The first page of Oxford Economics' Research Briefing titled don’t fret, the workers will be back

Talk of US labor shortages is everywhere. But rather than a shortage, we see a transitory mismatch between the supply and demand of workers in sectors most affected by the pandemic.

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Research Briefing | Jun 18, 2021

Australia | Population update: migration recovery delayed

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With the border closed until mid-2022, suppressed net overseas migration will limit Australia’s population growth to only 48,200 people in FY2021. It is expected to take until FY2024 to return to trend, near 375,600 people per annum.

Australia’s population outlook hinges on a fragile border reopening timeline, with further delays a downside risk to the outlook. When the border does reopen and stored demand to migrate to Australia can be realised, risk skews to the upside

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Research Briefing | Jun 18, 2021

Australia | Population update: migration recovery delayed

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Research Briefing | Jun 17, 2021

MENA | Saudi Q1 GDP; Regional inflation and Iran breakthrough

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Saudi Arabia’s GDP fell 3.0% y/y in Q1 according to newly released data, slightly less than preliminary estimates suggested. The decline was mainly driven by oil output cuts, while non-oil activity expanded by 2.9%, rebounding from 0.8% y/y contraction seen in Q4 last year.

What you will learn:

Saudi inflation rose to 5.7% y/y in May from 5.3% y/y in April, but we still expect the rate to ease in H2 as base effects from last year’s VAT hike fade. Meanwhile, Qatar registered a second consecutive positive inflation rate, up to 2.5%, following a sustained period of deflation.
The US has lifted some sanctions on Iran’s energy sector in a move characterised as a “good faith approach” by the Biden administration.
Despite some progress in the Vienna talks, a full return to the JCPOA is likely to be further complicated with an expected win for hardliner front-runner Ebrahim Raisi in the upcoming presidential elections.

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Research Briefing | Jun 17, 2021

MENA | Saudi Q1 GDP; Regional inflation and Iran breakthrough

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What you will learn:

Saudi inflation rose to 5.7% y/y in May from 5.3% y/y in April, but we still expect the rate to ease in H2 as base effects from last year’s VAT hike fade. Meanwhile, Qatar registered a second consecutive positive inflation rate, up to 2.5%, following a sustained period of deflation.
The US has lifted some sanctions on Iran’s energy sector in a move characterised as a “good faith approach” by the Biden administration.
Despite some progress in the Vienna talks, a full return to the JCPOA is likely to be further complicated with an expected win for hardliner front-runner Ebrahim Raisi in the upcoming presidential elections.

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Research Briefing | Jun 17, 2021

Canada | Recovery Tracker pauses, but health index climbs higher

Research Briefing - Canada Recovery Tracker

The Canada Recovery Tracker (CRT) dipped 0.1ppt to 90.9 in the week ended May 28, its first decline in five weeks. Four of seven subcomponents improved but drops in sentiment and mobility offset strong gains in health.

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Research Briefing | Jun 17, 2021

Canada | Recovery Tracker pauses, but health index climbs higher

Research Briefing - Canada Recovery Tracker

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Research Briefing | Jun 17, 2021

Australia | Investment recovery driving a stronger outlook

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Our June forecasts contained a substantial upward revision to growth in 2021 and 2022. We now forecast growth of 5.3% in 2021, followed by 3.2% in 2022. In the near term, the change in the outlook has been driven by the better-than-expected Q1 GDP print, and the more supportive stance of fiscal policy presented in the May Budget.

Very accommodative policy settings are gaining traction and spurring private sector activity. In particular, we are forecasting a sharp rebound in dwelling and business investment, which will boost activity in the near term.

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Research Briefing | Jun 17, 2021

Australia | Investment recovery driving a stronger outlook

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Research Briefing | Jun 16, 2021

Russia | Persistent price pressures justify front-loaded hikes

Ipad Frame_Russia-Persistent-price-pressures-justify-front-loaded-hikes

The authorities’ decision to eschew lockdowns in the last 12 months has led to a steady return of mobility and economic activity to pre-pandemic levels. Recent economic indicators corroborate the narrative of a V-shaped recovery.

What you will learn:

In May, headline inflation increased to 6.0% y/y following a short-lived deceleration in April. We have raised our end-year CPI forecast to 5.5% y/y, which is higher than both the government’s and CBR forecasts.
Inflationary pressures continue to increase. The CBR has already hiked 75bps since March and brought its policy rate up to 5.0%.
We believe the CBR has a reason to continue front-loaded monetary tightening. Another 50bp hike seems appropriate at the Friday policy meeting.

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Research Briefing | Jun 16, 2021

Russia | Persistent price pressures justify front-loaded hikes

Ipad Frame_Russia-Persistent-price-pressures-justify-front-loaded-hikes

What you will learn:

In May, headline inflation increased to 6.0% y/y following a short-lived deceleration in April. We have raised our end-year CPI forecast to 5.5% y/y, which is higher than both the government’s and CBR forecasts.
Inflationary pressures continue to increase. The CBR has already hiked 75bps since March and brought its policy rate up to 5.0%.
We believe the CBR has a reason to continue front-loaded monetary tightening. Another 50bp hike seems appropriate at the Friday policy meeting.

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Research Briefing | Jun 16, 2021

Global Coronavirus Watch: Nearer-term inflation risks build

The latest US and China inflation numbers have been shrugged off by markets despite being a bit higher than expected. While we still think that talk of a shift to a new regime is premature, the risks to the near-term inflation outlook are tilted to the upside due to pandemic-related imbalances and bottlenecks.

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Research Briefing | Jun 16, 2021

Global Coronavirus Watch: Nearer-term inflation risks build

Ungated Post|16 June 2021

ausbiz: It’s the topic du jure, it’s inflation

Chief Economist for Australia Sarah Hunter from BIS Oxford Economics joins ausbiz to discuss what’s transitory and and what’s not. All eyes are on the jobs data set to be released, as we’re going to be able to see the full impact of jobkeeper as the decisions that businesses have made come into full view.

Commodity prices and shipping costs are also brought into focus noting that the sector is continually hit with bad news, after only just getting back on track from the Suez Canal tragedy – there has been a large closure in one of China’s biggest ports… .

Ungated Post|15 June 2021

NHK World-Japan: G7 Takes up China and the Digital Future

Shigeto Nagai, Head of Japan Economics at Oxford Economics joins NHK World-Japan to discuss the economic outlook following the G7 Summit, what the implications are for Japan and the global impact.

Read more

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Research Briefing | Jun 14, 2021

US | Rising health conditions are fostering economic vitality

With the spread of Covid-19 in the US slowing considerably and vaccinations continuing at a healthy pace, consumers are gradually spending again on services. We expect resurgent demand in Q2 and Q3 will support consumption growth of 9.5% in 2021 – a near 70-year high. The fading pandemic should also ease labor supply constraints, fuelling the addition of 8 million jobs in 2021.

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Research Briefing | Jun 14, 2021

US | Rising health conditions are fostering economic vitality

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Research Briefing | Jun 14, 2021

MENA | Bond sales; Bahrain in lockdown and Abu Dhabi invests

Bond sales; Bahrain in lockdown and Abu Dhabi invests

A series of bond sales across the GCC have taken place. Saudi Aramco is
selling its first dollar-dominated Islamic bonds in three tranches. The return to the market signals an attempt to raise funds to cover its cash commitment to a promised $75 billion in dividends after an oil-price driven surge in profits in the first quarter of the year. Elsewhere, Oman has raised $1.75 billion, a few months after raising $3.25 billion in January.

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Research Briefing | Jun 14, 2021

MENA | Bond sales; Bahrain in lockdown and Abu Dhabi invests

Bond sales; Bahrain in lockdown and Abu Dhabi invests

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Research Briefing | Jun 14, 2021

UK | Why the pandemic scars won’t run so deep

Why the pandemic scars won’t run so deep

We now expect the scarring effect from the pandemic on the supply-side of the UK’s economy to be much more limited – a 1% permanent cut to GDP compared to our original estimate of 2.6%. But we still forecast UK GDP growth will average a relatively modest 1.4% a year through the 2020s.

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Research Briefing | Jun 14, 2021

UK | Why the pandemic scars won’t run so deep

Why the pandemic scars won’t run so deep

Blog|14 June 2021

How has the pandemic affected women in the labour market? Some evidence from the UK

There has been much discussion around the world about how the Covid pandemic is disproportionately impacting women in the labour market. A report from the OECD suggests that male-dominated policy-making bodies are making decisions that discriminate against women. Some commentators have gone so far as to call the current situation a “shecession.” Is that true?

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Research Briefing | Jun 14, 2021

Canada | Recovery Tracker heats up as summer approaches

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Our Canada Recovery Tracker (CRT) rose 3.3ppts to 90.9 in the week ended May 21, its fourth straight weekly increase. Six of seven subcomponents went up, led by strong gains in health and sentiment.

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Research Briefing | Jun 14, 2021

Canada | Recovery Tracker heats up as summer approaches

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Our Canada Recovery Tracker (CRT) rose 3.3ppts to 90.9 in the week ended May 21, its fourth straight weekly increase. Six of seven subcomponents went up, led by strong gains in health and sentiment.

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Research Briefing | Jun 11, 2021

US | Recovery Tracker ends May firing on all cylinders

Research Briefing - US Recovery Tracker ends May firing on all cylinders

Our US Recovery Tracker finished May on a high note, rising 1.5ppts to 94.6 in the week ended May 28. A Memorial Day boost to demand, looser financial conditions, better health conditions, more robust production, and stronger employment lifted the tracker to a new recovery peak.

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Research Briefing | Jun 11, 2021

US | Recovery Tracker ends May firing on all cylinders

Research Briefing - US Recovery Tracker ends May firing on all cylinders