Quarterly economic forecasts for the main developing and emerging countries.
Investment holds the key
Global activity remains strong. Sentiment indicators point to continued expansion in 2018 and firm manufacturing activity supported by a pickup in investment. In the US, a large fiscal impulse will extend the business cycle. With key markets approaching full employment, GDP growth may be constrained by supply-side constraints, giving rise to some inflationary pressures.
Monetary Policy: back to normal?
The 2008 financial crisis witnessed unprecedented policy responses from the world’s major central banks. Main central banks cut their policy rate to near 0%, exhausting the conventional monetary options. Then, to further ease financial conditions, they started to design a variety of unorthodox monetary policy tools commonly labelled as “unconventional monetary policies”. These have included “lower-for-longer” forward guidance on the short-term rate, large-scale asset purchases, large-scale liquidity provis.
Trade globalisation: going into reverse?
Globalisation has been the dominant force in the development of the world economy in the post-Cold War era, making the world’s economies more interconnected and more inter-dependent than ever before. This wave of globalisation is the second in the past 200 years. The first wave began in the first half of the 19th century, powered by a combination of technological breakthroughs and liberal trade policy in continental Europe. It collapsed when the Great Depression of the 1930s led to a widespread retreat into protectionism.
More EcoNote studies
Subscribe to the Economic studies series
The Economic Research Department analyses, monitors and drafts forecasts/scenarios regarding global economic and financial developments on behalf of the Societe Generale group as a whole. Its experts share their vision through economic, financial and socio-political studies and articles.