FocusEconomics Insights - Latest Posts
July 18, 2017
The study of macroeconomics is an interesting one, as it explores the behaviour of the aggregate economy and the complex relationships that exist between factors such as inflation, interest rates and the underlying value of currency.
The impact of taxation within the economy makes for an equally interesting study particularly over the course of modern history. This seems even more relevant in the modern age, with Donald Trump's proposed tax plans expected to slash corporate taxes and trigger a boom in the business world.
More specifically, Trump's proposed corporate tax reforms would lower the maximum rate for small and medium-sized businesses from 38% to 15%. The new President has also proposed a one-time repatriation on any income that corporations earn overseas, with a potential rate of 10% enabling U.S.-based businesses to reinvest money back into the American economy.
July 11, 2017
Over the last year and change, the economic outlook for the Eurozone has improved dramatically while in that same time the UK economic outlook has left much to be desired.
A little over a year ago, Brexit campaigners proclaimed that if the UK did not leave the European Union it would be "shackled to a corpse." A year on from the Brexit-vote and that looks far from the truth as the health of the Eurozone economy looks better than it has in some time. Read our latest economic outlooks for the UK and the Eurozone below.
How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
July 6, 2017
Latin America will soon enter into an electoral cycle that will last about a year and a half and, depending on the results, some countries could face difficulties in terms of their credit ratings. This is because of one important factor: The ongoing fiscal consolidation continues to be a challenge for many governments that are facing a context of low economic growth and lower tax revenues, especially those related to low commodity prices, which makes it even more difficult to curb the current debt dynamics in the region.
*Guest blog post from Latinoamerica21.
Presidential elections are scheduled in seven countries: Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay and Venezuela. All of the countries, with the exception of Venezuela, will see their current presidents’ terms ending and new leaders taking on the role. In addition, congressional elections will be held in Argentina— which could test Mauricio Macri’s reform agenda—and in El Salvador, where months of political paralysis has led to a significant decline in sources of funding for the government in addition to a debt default.
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The elections will be of particular importance for the future of credit ratings for countries that have a negative outlook: Brazil, Chile and Mexico.
July 6, 2017
On 4 July, a Goldman Sachs executive appeared on CNBC to discuss investing in emerging markets. According to her, emerging markets may be a better investment than the U.S. despite growing concerns over higher debt levels and a stronger USD, U.S. market's may actually offer more uncertainty than emerging markets.
"Look at what's going on in the U.S. If you think about the moves in the U.S. both in the fixed income and equity markets there's a lot hinging on policy options which may or may not occur. Does tax reform going to happen? What happens to health care? What happens to infrastructure?"
With that said, we brought back our emerging markets economic outlook. Read our latest summaries for the emerging markets below.
July 5, 2017
Chile's economy has slowed in recent quarters, as the once booming mining sector has performed poorly and fixed investment has fallen sharply, taking business and consumer confidence with it. These issues continue to plague the economy as we move into Q3, with that in mind FocusEconomics Economist Oliver Reynolds interviewed Senior Economist for the Chamber of Commerce of Santiago, Maria del Pilar Cruz, about the potential future of the all-important mining sector as well as future economic growth prospects, President Bachelet's reforms, and inequality in Chile.
July 4, 2017
Where do CEOs see the most important prospects for business growth in the next 12 months? The U.S., China and Germany top the list, according to PwC Global’s 20th annual CEO Survey of nearly 1,400 CEOs from around the world. The UK, Japan, Brazil, India, Mexico, France and Australia round out the list of the top 10.
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We took closer look at what economic analysts see on the horizon for these economies in the next 12 months:
June 28, 2017
Guest blog post from Latinoamerica21*
Mobile technologies and services generated 5% of Latin America's GDP in 2015 and nearly 2 million jobs, direct and indirect. In addition, the mobile ecosystem has contributed USD 40 billion to the public coffers for tax purposes, according to the report, The Mobile Economy Latin America and the Caribbean 2016, from the GSMA which represents the interests of mobile operators around the world.
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June 26, 2017
We recently sat down with Tim Cooper, Global Economist, with BMI Research, to find out what his views are for the global economy in the coming years given the recent upgrade to the Consensus Forecast and healthier dynamics in Q1. In this interview, Tim comments on growth in Europe and what the future political panorama might look like; when the ECB is likely to raise rates and if it will extend its bond-buying program; to what extent the outcome of the recent UK election will affect Brexit negotiations; and whether we should be more optimistic on the Chinese economy. Tim also gives his insight on what's driving the acceleration in the U.S. economy and potential future Fed moves, whether the Trump Administration poses a real threat to the Mexican economy, and the main challenges Latin America is facing today.
How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
June 21, 2017
If you have been following the financial and economic news of late, you’ll have probably heard the term “quantitative easing” quite a bit. You’ll likely have also heard a lot about central banks “unwinding" QE. Well, that is because after years of quantitative easing and otherwise accomodative monetary policy from some major central banks, it seems as though they are now looking to reverse course as global economic growth appears to be firming and inflation rising. This article will cover how the Fed and the ECB are likely to “unwind" QE. At the moment, however, there are more questions than there are answers, so we asked 18 economic experts for their thoughts on the matter. But before we get into that, to understand what unwinding QE really means, we'll have to explain what quantitative easing actually entails.
June 19, 2017
Major central banks around the world, like the U.S. Federal Reserve and the European Central Bank, are either on their way or at the very least contemplating reducing their balance sheets and raising interest rates after years of accomodative monetary policy. The Fed is further along in the process, aggressively tightening monetary policy having just last week raised interest rates for the third time in as many quarters.
Its plan to unwind its massive balance sheet of USD 4.5 billion accumulated during its six-year quantitative easing program from 2008 to 2014 will be put into action soon as well. The ECB, which began its own QE program in 2015, seems closer to ending QE with each monthly meeting as Eurozone inflation rises and economic growth firms up.
Both banks are at a crossroads as their respective decisions could be disastrous or come at just the right time. Recently, FocusEconomics contacted Frances Coppola, a regular contributor to Forbes and the author of the Coppola Comment finance & economics blog to get her comments on how both central banks should go about "unwinding QE."
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- Taxing the Economy: Achieving a Delicate Balance
- Is the UK really "shackled to a corpse"?
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
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- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
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- Brexit negotiations. Between Uncertainty and Urgency
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- Baby Boomin': Implications of high population growth in Latin America
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- What to expect in Asia for 2017
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- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Russian economy update in wake of OPEC deal announcement
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
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- The U.S.' (Not So) Mysterious Case of the Missing Men
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- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit
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