FocusEconomics Insights - Latest Posts

• What is the true state of Israel’s economy?

  May 23, 2019

  Israel’s economy surged in the first quarter of 2019 according to preliminary estimates, shrugging off political uncertainty in the build-up to April’s general elections and likely registering one of the strongest expansions in the Middle East and North Africa region. That said, Q1’s figure is less impressive than it appears at first glance; higher vehicle imports, in anticipation of imminent environmental tax changes, boosted the reading. To cut through the noise and get a clearer picture of the true state of Israel’s economy, we spoke to Gil M Bufman, Chief Economist at Bank Leumi.

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  Tags: MENA

• China: Taking the Economic Center Stage

  May 15, 2019

  The Belt & Road and Made in China 2025 initiatives strive for a global economy with China at its core

  “Hide your strength, bide your time, never take the lead”; such was the philosophy of former Chinese leader Deng Xiaoping, the architect of the market reforms in the 1970s and 1980s which set the Chinese economy careening towards modernity.

  This maxim underpinned Chinese policy for decades, allowing the Asian giant’s economic rise to go largely unchallenged. Many countries drooled at the sight of a swelling new export market, while Western firms ploughed in FDI.

  In 2017, current leader Xi Jinping sounded the death knell for Deng’s approach. Speaking at the 19th National Congress—amid a power vacuum left by Donald Trump’s mercantilism and the EU’s internal wrangling over Brexit—he promised China would adopt a more determining role in world affairs.

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  Tags: China

• The Current State of American Corporate Debt

  April 25, 2019

  By Guest Author: Professor Arthur S. Guarino, MBA, MSSc, JD, Rutgers University

  The amount of corporate debt in the United States is growing at an alarming pace. While issuing debt has its good and dangerous sides, too much debt has been accruing with American companies due to numerous reasons. The problem then becomes how will the American economy be affected in case of an economic downturn.

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  Tags: Economic Debt, United States

• Which will be the most miserable economies in 2019?

  March 29, 2019

  As Steve Hanke put it, the human condition inhabits a vast continuum between “happy” and “miserable.” When it comes to economics, misery tends to stem from high inflation and high unemployment. The best way to ensure happiness is to grow economically, but that is not easy with high inflation and unemployment. 

  The vast majority of countries report on economic indicators on a regular basis. Therefore, we can compare each nation to get an idea of how happy or miserable the people are in each of the nations. 

  Are you curious how happy or miserable your country is? In this post we attempt to give you an idea of which countries will be the most miserable (or happy) this year by using our projections for inflation and unemployment in 2019 for 130 countries to calculate their misery index score. 

  

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  Tags: Inflation, Infographic, Unemployment rate

• Only by freeing Nigeria from its dependence on oil can Buhari truly take Africa’s giant to the next level

  March 27, 2019

  In his election campaign, Muhammadu Buhari, the incumbent president and head of the All Progressives Congress (APC), ran on a platform promising to “take Nigeria to the next level”. More specifically, he pinpointed “next level agriculture”, “next level power”, “next level industrialization”, “next level tech & creative” and “next level school feeding” as the means to do so—vowing to his fellow Nigerians that “we are all going higher” as a result. After comfortably securing his second term—winning 55.6% of the votes in an election marred by characteristic delays, violence, voter apathy and condemnation by the opposition—Buhari must learn from the mistakes of his first term and immediately turn his attention to the significant challenges facing Nigeria. Particularly, the last five years have been yet another harsh reminder that Africa’s largest economy and most populous country remains fatally overdependent on its oil-related revenues, which still account for around two-thirds of government revenues and nearly 90% of export earnings. If he wishes to follow through on his campaign pledges, the former military general must therefore strive to free Nigeria from its reliance on its oil revenues, while cracking down on corruption and ensuring Nigeria’s institutions are left in better shape than he inherited them.

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  Tags: Sub-Saharan Africa

• An Analysis of President Trump’s 2020 Budget

  March 22, 2019

  By Guest Author: Professor Arthur S. Guarino, MBA, MSSc, JD, Rutgers University

  President Trump’s 2020 federal budget clearly shows his priorities for the next decade: increased defense spending, the creation of a Space Force, significant funding for a southern border wall, higher long-term budget deficits, and a growing national debt. His administration’s budget will definitely affect every American as well as the macroeconomy.

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  Tags: United States

• The World's Fastest Growing Economies

  March 19, 2019

  The Chinese economy's meteoric rise over the last few decades has been one of the biggest stories in economics; however, China’s growth has begun to slow in the last few years as authorities have begun to transition the economy from a manufacturing-based economy to a services-based economy. Thus, other economies have begun to post larger growth rates, in recent years. In this piece, we compile a list of the top 15 fastest growing economies in 2019 according to our Consensus Forecasts from over 1000 sources.

  One thing to keep in mind about most of these economies is that, fastest-growing does not necessarily mean largest economy or most developed. In fact, most of these countries suffer from things such as high income inequality, low levels of per capita GDP, political instability and widespread corruption.

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  Tags: Infographic

• President Sebastian Piñera aims to bring his elder brother’s private pension system into the 21st century

  March 18, 2019

  The upcoming overhaul of Chile’s private-led pension system points to business as usual. President Sebastian Piñera—the younger brother of José Piñera who molded today’s system as minister of work and social security under Augusto Pinochet’s military dictatorship—unveiled a bill last October, which raises mandatory contributions from 10.0% to 14.2%, bolsters competition among private administrators (AFPs) and increases the government’s financial support for low pensions. The reform—widely approved by the opposition—modernizes the current scheme and should not have any noticeable effects over economic activity in the near-term, according to surveyed panelists.

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  Tags: Latin America

• Brexit End-Game Scenarios

  February 21, 2019

  Guest Author: Daniel Solomon, PhD Economist, Euromonitor International

  With less than two months to go until the scheduled Brexit date of 29th March 2019, the conditions under which the UK will exit the EU remain highly uncertain. The options range from a no-deal Brexit to no-Brexit. The UK’s decision to leave the EU has already taken a toll on the UK economy, but the size of final economic cost of Brexit will heavily depend on the shape of the exit.

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  Tags: United Kingdom

• The Turkish Economy: What’s In Store For 2019?

  February 15, 2019

  The Turkish economy endured a rollercoaster ride last year. Economic activity boomed in H1, as the government ratcheted up spending in the run-up to the presidential and parliamentary elections in June. Economic imbalances intensified in tandem, with the current account deficit and inflation soaring.

  Even after the election was over, with a decisive victory for Recep Tayyip Erdogan and his AK party, public spending continued at full tilt. Coupled with a hesitant Central Bank—likely under political pressure from the president—investor jitters started to mount. The lira, which had already been under pressure since the start of the year along with other emerging-market currencies, began to crumble.

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