Global economics in The Monday Briefing

Central banks to the rescue – again?

Compass

This morning we are launching our second quarter “Global Economy in Charts” report, available here - https://blogs.deloitte.co.uk/mondaybriefing/2019/06/global-economy-in-charts-q2-2019.html

Created by my colleague Debo, the report examines the big global macro trends and challenges. Charts can be cut and pasted into your own reports. Do drop Debo a line at dde@deloitte.co.uk with ideas and comments.

Economists went into 2019 expecting growth in the West to cool. If anything, the slowdown has come quicker than expected.

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Posted on 17/06/2019

Global Economy in Charts - Q2 2019

Download the charts in pdf format here
Download the charts in powerpoint via SlideShare here

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Posted on 14/06/2019

China’s Belt and Road Initiative

Tunnel

China’s growth rate has slowed in recent years. Its sustainable growth rate has almost halved, to around 6.0% in a decade or so.

By Western standards this is an unattainably rapid growth rate. It would enable China’s economy to double in size every 12 years. China is still a fast-growing country, and one that exercises growing authority on the world stage. From technology to overseas investment and geopolitical influence China increasingly matters.

China’s Belt and Road Initiative (BRI) – dubbed by the authorities as “the Project of the Century” – illustrates the scale of the government’s ambitions. Launched in 2013 as a vast programme of overseas infrastructure, president Xi Jinping proclaimed it would restore the ancient Silk Road trading route that connected Asia and Europe.

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Posted on 10/06/2019

Modern Monetary Theory – or alchemy?

Coins

For centuries governments have taxed, borrowed or created money to pay for public spending. All carry risks. Heavy taxes dampen growth and upset voters. Excessive public borrowing triggers financial crises. Printing money to pay for public spending can look tempting. But, as rulers from Henry VIII to Venezuela’s Nicolás Maduro have discovered, creating money out of thin air and spending it tends to destroy confidence and send inflation rocketing.

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Posted on 03/06/2019

Climate change and the threat to financial stability

Deloitte-uk-climate-change-and-the-threat-to-financial-stability

Last month the governor of the Bank of England, Mark Carney, issued a stark warning about the impact of climate change: “If…companies and industries fail to adjust to this new world, they will fail to exist”. Mr Carney’s statement was co-signed by the chair of the Network for Greening the Financial System, a coalition of 36 central banks, including the People’s Bank of China. The Network helps central banks measure and mitigate the risks to the financial sector posed by climate change. Last month’s statement signals that climate change has well and truly arrived as an issue for central bankers.

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Posted on 07/05/2019

Global growth update

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Today’s Briefing looks at the state of global activity one-third the way through the year.

Economists went into 2019 expecting global growth to slow modestly and that’s just what has happened. The slowdown is being driven largely by advanced economies, especially the euro area.

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Posted on 29/04/2019

Human capital, where the UK stands

Deloitte-uk-human-capital

Most conversations about the UK’s poor productivity record eventually turn to education and skills. Everyone agrees that education is vital but there is more debate about the relative value of different models and types of education. This week’s Briefing offers some thoughts on how the UK system compares to others and looks at some of the salient characteristics of the British model.

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Posted on 23/04/2019

Deloitte CFO Survey: The dash for cash

Deloitte-uk-survey-account

Today’s Briefing summarises the findings of the latest Deloitte Survey of Chief Financial Officers which was released overnight. The full report is available at: https://www2.deloitte.com/uk/en/pages/finance/articles/deloitte-cfo-survey.html

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Posted on 15/04/2019

Who’s afraid of the yield curve?

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There’s no doubt that growth in the West is slowing. The question is whether the slowdown could turn into a recession. Last month the US yield curve, a key gauge of future US growth, temporarily dipped into recessionary territory for the first time in ten years.

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Posted on 08/04/2019

Navigating the China slowdown

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China’s economic transformation in the last four decades is one of the great economic success stories of modern history. Through liberalisation and opening up to trade China was able to grow by 10% a year between 1980 and 2018. Its economy expanded by a factor of 30 and it easily dodged recession during the global financial crisis. There is no precedent in history for an economy of this size growing at such a rate for so long.

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Posted on 01/04/2019