Global
Top Economic Reports
July 18, 2013

By Global Economic Team|

Sunday Start: What Next in the Global Economy: In the almost 20 years that I have been going to Japan, I cannot remember a visit when the investors and officials I met were as optimistic on the prospects for their economy as this past week. Naturally, it is Japanese-style optimism: cautious rather than exuberant, expressed in a somewhat hesitant rather than ebullient manner, and frequently couched in terms of ‘hope' rather than ‘certainty'. Yet, it stands in sharp contrast to the pessimistic mood I still encountered on my previous visit last October, which predated the December election, the adoption of Abenomics, and the regime change at the Bank of Japan in April. Joachim Fels

ECB Watch: Guiding Towards Lower Policy Rates: On hold today, but guiding towards lower rate: Against our expectations, the ECB kept interest rates unchanged at today's meeting. But the ECB introduced some more concrete forward guidance and also an easing bias on all three policy rates, explicitly naming the deposit rate, at the press conference. In what was a unanimous decision by the Council, the ECB expects its rates to "remain at the present level or lower for an extended period of time" due to subdued inflation pressures, economic activity and money growth. The explicit mention of a rate cut supports our out-of-consensus call for another ECB rate reduction. As Mario Draghi said "50bp is not the lower boundary". Elga Bartsch

India Economics: How the Dollar's Rise and China's Slowdown Affect India: Two key macro risks: Over the last few weeks, we have highlighted that the simultaneous emergence of two trends - the dollar's rise and China's slowdown - is becoming a challenge for the whole Asia Ex-Japan region. We believe that every country in the region including India will be exposed to downside risks to growth via its exposure to at least one of these two trends. Chetan Ahya

Japan Economics: J-Insight: The Third Arrow: What's Next? Investors around the world are focused on Japanese economic policy, particularly on PM Abe's "Three Arrows," the agenda of monetary, fiscal, and structural policies. Robert Alan Feldman

Greater China Economics: Issues in Focus: China: We lowered our annual GDP growth forecasts to 7.6% YoY in 2013 and 7.6% YoY in 2014, from 8.2% YoY and 7.9% YoY, respectively. This reflects aggregate demand weakness and the new government's less pro-growth policy stance. In addition, we lowered our CPI inflation forecasts to 2.6% YoY and 2.0% YoY for 2013 and 2014, respectively, from 3.5% YoY and 3.3% YoY. We could be surprised on the upside by improved external demand and local government investment initiatives in 2H2013 - but the bear case looms large if negative growth shocks are met with policy headwinds. Helen Qiao