South Africa: Structural Issues to Dominate Long Term Growth

January 29, 2024 9:00 AM UTC

Bottom line: We expect 1.3-1.5% GDP growth in South Africa in the 2025-2030 period. We are concerned with the structural problems affecting economic dynamics negatively, including loadshedding, transportation bottlenecks, and shrinking trade surplus. Despite structural problems; growing population,

EM FX Outlook: USD Decline v Inflation Differentials

December 19, 2023 9:59 AM UTC

·        In spot terms, we see the Indonesian Rupiah (IDR) and Malaysian Ringgit (MYR) rising against the USD as Fed rate cuts narrow interest rate differentials and a move away from an overvalued USD occurs.  Brazilian Real (BRL) and Mexican Peso (MXN) will likely be stable against the USD

Moderate Increase in Turkiye’s Inflation in November

December 4, 2023 11:28 AM UTC

Figure 1: CPI (YoY, % Change) and Policy Rate (%), January 2021 – November 2023
Source: Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI's main groups are examined in November, we see that housing with 37.5% was the main group with the lowest

Turkish Economy Expands 5.9% in Q3 2023

November 30, 2023 1:40 PM UTC

Figure 1: GDP (%, YoY), Q3 2019 – Q3 2023
Source: Datastream, Continuum Economics
When the activities which constitute GDP are analyzed in Q3, construction sector made the highest contribution to the economy with an 8.1% YoY rise, followed by 5.7% in the industry sector and 5.1% in the financial and

Russian Economy Grows by 5% in October

November 29, 2023 7:11 PM UTC

Figure 1: Industrial Production (%, YoY), October 2020 – October 2023
Source: Datastream, Continuum Economics
The Russian economy continues to grow fast in 2023 so far, after partly relieved from the negative impacts of the war in Ukraine in 2023. The Russian economy grew by a strong 5% YoY in Octob

SARB Holds Key Rate at 8.25% at Third Straight MPC

November 24, 2023 10:11 AM UTC

Figure 1: CPI Inflation Rate, October 2021 – October 2023
Source: Datastream
Under surging inflationary concerns, SARB decided to keep the repo rate at 8.25% on November 23 MPC. While the hold was widely expected, high inflation numbers on November 22 did raise some eyebrows. Despite this, it appe

Sixth Straight Rate Hike: CBRT Continued Strong Monetary Tightening

November 23, 2023 12:53 PM UTC

Figure 1: Key Rate (%), September 2020 – November 2023
Source: Datastream
The CBRT raised the policy rate from 35% to 40% on November 23 MPC meeting to establish the disinflation course as soon as possible, to anchor inflation expectations, to control the deterioration in pricing behaviour and to s

The Bells Are Tolling as the Spiking Cycle Continues: South Africa’s Inflation Jumped to 5.9% in October

November 22, 2023 3:48 PM UTC

Figure 1: CPI Inflation Rate, October 2021 – October 2023
Source: Datastream
Price increases in food and fuel were remarkable last month, which directly hit the consumers purchasing power. Inflation for food and non-alcoholic beverages accelerated for a second consecutive month, rising to 8.7% in O

Ukraine War: Western Support Weakens, Elections on the Horizon, Peace Negotiations Remains Unlikely

November 20, 2023 11:28 AM UTC

Market Implications: The war continues to create an increasing financial burden on Russia due to high military spending in addition to aggravation of staff shortages, elevated inflation, and trade income diminishing due to sanctions. Ukraine's economy continues to contract, inflation surges, and inf

Russian Economy Expands by 5.5% in Q3, Rosstat Reports

November 15, 2023 5:25 PM UTC

Figure 1: GDP Growth (%, YoY), Q3 2020 – Q3 2023
Source: Datastream, Continuum Economics
The Russian economy continues to grow fast in 2023 so far, after partly relieved from the negative impacts of the war in Ukraine. (Note: Russian GDP decreased by 1.8% in Q1 2023, and grew by 4.9% in Q2.) The mai

South Africa: Structural Issues to Dominate Long Term Growth

November 14, 2023 1:07 PM UTC

Figure 1: South Africa GDP Growth Forecasts to 2030 (%)
Source: Continuum Economics
Figure 2: Population Forecasts to 2030 (Thousand)
Source: Continuum Economics
Technology is also one positive driver of productivity in the 2020's alongside increased climate change investments but the impacts of Tec

Russia: War Related Sanctions and Shrinking Labor Force Pose Threats to Long Term Growth

November 9, 2023 12:02 PM UTC

Figure 1: Russia GDP Growth Forecasts to 2030 (%) 
Source: Continuum Economics/Datastream
Figure 2: Russia Population Forecasts to 2030 (Thousand)
Source: Continuum Economics/Datastream
Figure 3: Russia Industrial Production Forecast to 2030 
Source: Continuum Economics/Datastream
Technology is also o

Turkish Inflation Continued Its Spiking Cycle in October

November 3, 2023 8:08 AM UTC

Figure 1: Inflation (YoY, % Change), October 2018 – October 2023
Source: Turkish Statistical Institute, Datastream, Continuum Economics
When annual rate of changes (%) in the CPI’s main groups are examined in October, we see that housing with 25.9% was the main group with the lowest annual increas

Russia’s GDP Grew Faster Than Expected in January - September 2023

November 1, 2023 2:23 PM UTC

Figure 1: Industrial Production (%, YoY), October 2018 – September 2023
Source: Datastream, Continuum Economics
The main accelerator for Russian growth continues to be the surge in the military spending after the war in Ukraine started. Despite there being a pause on territorial advance by Russia o

Charting our Views: October 2023

October 31, 2023 11:11 AM UTC

Download the PDF on the left to see our key economic and asset class views

CBR Maintains Strong Hawkish Stance by Lifting the Rate to 15%

October 27, 2023 1:34 PM UTC

Figure 1: $/Ruble, October 2022 - October 2023
Source: Datastream
According to the Monetary Policy press release by the CBR today, CBR remained concerned about multiple issues such as higher inflationary pressure seen across an increasingly broader range of goods and services, growing domestic dema

CBRT Continued Strong Monetary Tightening on October 26 MPC

October 26, 2023 3:35 PM UTC

Figure 1: Key Rate (%), September 2020 – October 2023
Source: Datastream 
The CBRT raised the policy rate from 30% to 35% on October 26 MPC meeting to establish the disinflation course as soon as possible, to anchor inflation expectations, to control the deterioration in pricing behaviour and to s

CBRT will Likely Halt Tightening Cycle Transiently on October 26 MPC

October 19, 2023 10:52 AM UTC

Figure 1: Key Rate (%), September 2020 – September 2023
Source: Datastream 
Despite inflation remained on the upside in September (there are still signs that inflation will continue to spike in the upcoming months mostly due to deterioration in pricing behaviour), cost and demand pressures and slo

South Africa’s Inflation Spiked to 5.4% in September

October 18, 2023 12:10 PM UTC

Figure 1: CPI Inflation Rate, October 2021 – September 2023 
Source: Datastream
Annual CPI amounted to 5.4% in September 2023, up from 4.8% in August. The food and non-alcoholic beverages contributed to the 5.4% annual inflation rate by 1.4 percentage points; housing and utilities by 1.3 percentage

Russia’s Inflation Surged Fast in September

October 12, 2023 6:05 PM UTC

Figure 1: CPI Inflation Rate (%, YoY), September 2022- September 2023
Source: Datastream, Continuum Economics
According to Rosstat, prices of food, non-food products and services rose by 0.86%, 1.09% and 0.61% on a monthly basis in September, respectively. The consumer price index (CPI) also hiked by

South Africa’s Inflation is Expected to Increase in September

October 10, 2023 1:15 PM UTC

Figure 1: CPI Inflation Rate, October 2018 – August 2023 
Source: Datastream
First, the weakening currency remained as one of the major risks against the inflation outlook. USD to Rand rate fell to a four-month low to 19.57 as of October 5 and the lagged feedthrough of previous declines is still fe

Webinar and Q3 Outlook Chapters Links

October 3, 2023 12:46 PM UTC

U.S. Outlook: Slower Growth but no Recession (here)
LatAm Outlook: Growth Continues (here)
China Outlook: Policy Stimulus Not Enough (here)
Japan Outlook: The First Step to Exit (here)
Asia/Pacific (ex-China/Japan) Outlook: Public Spending to be Catalyst (here)
Eurozone Outlook: Monetary Masochism (here

Charting our Views: September 2023 Outlook

September 29, 2023 9:54 AM UTC

Download the PDF on the left to see our key economic and asset class views

Outlook Overview: Into 2024

September 28, 2023 10:04 AM UTC

Risks: DM countries could see stronger lagged effects on the economy from the 2022-23 monetary tightening that could prolong the EZ/UK recession or move the U.S. slowdown towards a mild recession. Separately, in China the impact of the residential construction decline could be stronger than expected

Charting our Views: September 2023

September 7, 2023 3:18 PM UTC

Download the PDF on the left to see our key economic and asset class views

Charting our Views: August 2023

August 14, 2023 7:33 AM UTC

Download the PDF on the left to see our key economic and asset class views

Navigating the Path to Peace: Saudi Talks on Ukraine-Russia Conflict

August 7, 2023 10:59 AM UTC

Saudi plays peacemaker
The goal of the meeting in Jeddah this weekend was to discuss and potentially agree upon essential principles that could pave the way for a peaceful end to the conflict in Europe. Saudi brought together several stakeholders with diverse interests and perspectives on the conflic

U.S. and EZ Government Bond Yields and Peaking Rates

August 2, 2023 7:52 AM UTC

Figure 1: 10-2yr U.S. Government Bond Curve (%) 
Source: Datastream/Continuum Economics 
Rate Hikes Ending But No Early Rate Cuts 
Policy tightening is getting to a mature stage in DM economies, with the Fed and ECB now in restrictive territory and the lagged effects of previous tightening yet to fu

EM Divergent Rate Hikes and Coming Cuts

July 27, 2023 7:54 AM UTC

Figure 1: 10yr Government Bond Spread versus U.S. Treasuries (%) 
Source: Datastream/Continuum Economics 
Rate Hike and Cuts 
The picture across major EM countries remains divergent, with China cutting rates in June (here), S Africa deciding to halting the tightening cycle in July (here) and Russia

Q2 Global Outlook: Chapters and Recording

June 28, 2023 11:21 AM UTC

If you missed our Q2 Global Outlook webinar, you can hear the recording by clicking here or the image below. Also below are links to each of the chapters in the Global Outlook.
LINK TO OUTLOOK CHAPTERS

Outlook Chapters Links

June 23, 2023 12:28 PM UTC

The chapters can be accessed by clicking on the relevant links. 
U.S. Outlook: No Recession, but Subdued Growth Will Help to Reduce Inflation (here)
LatAm Outlook: Lower Inflation and Growth above Expectations (here)
China Outlook: Recovery To Fade Into 2024 (here)
Japan Outlook: Trend Inflation To

Outlook Overview: Headline Inflation Slowing, Core Inflation and Policy Rates in Focus

June 22, 2023 10:29 AM UTC

  •We continue to feel that most central banks are underestimating the strength of tightening on credit/economy and then inflation and the effects of cumulative rate hikes since the start of 2021 (Figure 2).  DM central banks are placing too much weight on current core inflation, rather than the

Webinar: Uncertain 3 Months, But Bullish Equities 2024

May 25, 2023 3:46 PM UTC

Please click here for the webinar or below Image

Charting our Views: April 2023

April 27, 2023 7:24 AM UTC

Download the PDF to see our key economic and asset class views

Beneficial AI, but AGI Worries

April 20, 2023 9:02 AM UTC

Beneficial AI, but AGI Worries 
An economist has to look at the wider informed opinion in a sector to understand how developments could impact economies and markets. Focused AI is already in use and provides efficiency gains in repetitive tasks. The 2020s is a period of rapid technological change fa

Debt: Big EM’s Versus Low Income EM countries

April 17, 2023 6:55 AM UTC

Market Implications: In terms of financial stability, China’s ability to control debtors and creditors suggests that a major financial crisis can be avoided, though we remain concerned about weak banks. Low income EM countries have also seen a pick-up in debt/GDP, with borrowing in foreign curren

Too Much Debt Growth Since 2007: China, Japan and France

April 11, 2023 7:11 AM UTC

With a shift away from the ultra-low interest rate era, some debtors will face difficulties servicing debts.  Will this be a headwind to growth and also pose financial stability risks?   
Market Implications: In terms of financial stability, China’s ability to control debtors and creditors sugge

Webinar Recording: You Can Go Your Own Way

April 4, 2023 1:55 PM UTC

Charting our Views: March 2023 Outlook

March 28, 2023 10:07 AM UTC

Download the PDF on the left to see our key economic and asset class views

Outlook Overview: You Can Go Your Own Way

March 28, 2023 7:33 AM UTC

Risks: More aggressive Fed tightening to 6% plus would cause a U.S. recession and a deeper selloff in U.S. equities with a delay in the market recovery until 2024.Such a policy shock would initially hurt government bonds as well, but yields would then pivot to hopes of aggressive easing in 2024. The

China’s 25bps RRR cut

March 17, 2023 9:58 AM UTC

Figure 1: China Core and Headline CPI (Yr/Yr)
Source: Datastream 
The PBOC 25bps cut in RRR is a surprise more in timing rather than size and concept, as no major rumours had been evident. For domestic reasons, the RRR will be helpful in reinforcing the economic recovery that is the central focus of

China’s Local Government Debt: Problem or Crisis?

March 10, 2023 8:01 AM UTC

China’s local government and local government financing vehicles (LGFVs) are facing challenges, but how big could the problem become? 
Market Implications: We do not see a Lehman style moment in either the LGFV, SOE or property developer’s debts, as China authorities have huge moral suasion in e