FocusEconomics Insights - Latest Posts
December 5, 2016
Italy's and Prime Minister Matteo Renzi’s constitutional referendum was met with a resounding ‘no’ on Sunday.
The referendum was aimed at greatly simplifying the currently cumbersome relationship between the two chambers of Italian parliament to ultimately create a more efficient decision-making system and boost competitiveness. However, Beppe Grillo and his populist anti-EU Five Star Movement, was critical in delivering the ‘no’ vote, which highlights the continent’s rising tide of populism.
The outcome of the referendum marked the beginning of a very important year for the European Union and could, in the very worst case scenario, lead to the demise of the common currency bloc.
December 1, 2016
The OPEC deal is done and the news sent oil prices soaring yesterday. The deal, which is designed to curb record-high global oil inventories, has been mooted as a possibility since last February when prices dropped to their lowest prices in over a decade.
It’s taken almost a year, but the deal is done, overcoming disputes between the cartel’s three biggest producers, Saudi Arabia, Iraq and Iran. The deal, which also includes non-OPEC member Russia, represents the first time in 8 years that OPEC agreed to cut oil production and the first time Russia, one of the largest oil producers outside of the cartel, has agreed to cut production in 15 years.
December 1, 2016
The Brazilian economy remains stuck in the worst recession in modern history and GDP is expected to contract a sharp 3.2% in 2016. While signs of stabilization have begun to emerge and the recession is abating, the FocusEconomics panel sees only a tepid recovery next year, with growth of 1.0%. Against this backdrop, we spoke with one of our panel members Chief Economist José Francisco from Banco Fator about the recent developments in the Brazilian economy and what he expects for 2017.
Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
November 28, 2016
After dragging Greece kicking and screaming through a never-ending vicious cycle of fiscal adjustment and output decline, the European Commission seems to be softening in its attitude towards other struggling Eurozone economies. France, Italy, Portugal and Spain, among others, have all repeatedly been given extensions to reduce their debt and deficit levels after recurrent breaches of EU targets have gone unpunished, and the trend looks set to continue as our forecasts show that those economies will underperform again this year and next. Does this mark a shift in mindset within the Commission as to whether the Growth and Stability Pact is fit for purpose? Or rather just tactical maneuvering—or indeed resigned acceptance—in tough political times, as the EU faces unprecedented challenges to its legitimacy and survival?
November 24, 2016
Donald Trump will take power in January and will govern a U.S. economy that is in its seventh year of growing tepidly at around 2%. Our Consensus Forecast for the U.S. economy this month sees GDP growing 2.1% in 2017, but this will be subject to revision in the coming weeks and months as the economic priorities of President-elect Trump become clearer. Here we analyze the immediate and possible future implications of Trump’s victory. During his campaign, Trump outlined an extremely controversial policy agenda, including—but not limited to—building a wall on the U.S. southern border with Mexico, renegotiating NAFTA, cancelling or reforming the Affordable Care Act (Obamacare), imposing punitive trade tariffs on China and cutting taxes for the wealthy. The unexpected victory of Trump in November’s election and the resultant uncertainty over future U.S. policy will have serious ramifications for both the domestic and global economies.
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November 22, 2016
After a difficult 2015, the emerging markets have fortunately not decelerated as initially feared this year. Economic growth has been supported in 2016 by improving commodity prices and a broadly stable U.S. dollar. China’s economy has proved more robust than initially feared and the recovery now looks to be back on track in Brazil and Russia.
FocusEconomics’ Consensus Forecast sees emerging economies as a whole growing 3.9% this year, after expanding 4.0% in 2015. But what is in store for emerging markets in 2017?
Have a look at our latest Consensus Forecasts and find out what our panel of analysts says about the outlook for the key emerging markets next year.
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November 17, 2016
In an unexpected yet not entirely surprising turn of events, Philippines President Rodrigo Duterte continued his anti-U.S. rhetoric in late October by declaring that the island country would be “breaking up with America.”
The U.S. and the Philippines have shared strong relations dating all the way back to the late 19th Century when the U.S. occupied the Philippines as a colony. The relationship between the two nations has even been described as a “special relationship.”
Announced on 17 November, the Philippine economy expanded 7.1% in the third quarter of 2016 despite Duterte's antics since taking over in June. The economy is going strong, for now. In this post we take a look at what is at stake for the Philippine economy if Duterte does indeed move to break off relations with their long-time ally and driver of economic growth, the U.S.
November 15, 2016
On 4 July 1837, Ralph Waldo Emerson’s poem Concord Hymn was read at the unveiling of the Concord Monument in Massachusetts to commemorate the Battle of Concord of the American Revolutionary War. The name of the poem may not ring any bells to you, but one phrase in particular from the poem probably will, the shot heard ‘round the world.
The phrase has been used to describe many a historical event. It was famously used to describe the assassination of Archduke Franz Ferdinand of Austria, which kicked off the First World War. For any baseball fans out there, Bobby Thomson’s walk-off home run to win the 1951 National League pennant tie-breaker was also famously referred to as the shot heard ‘round the world.
The largely unexpected event that took place on 8 November in the United States of America is also probably worthy of the phrase.
November 10, 2016
It has been a few weeks since our last Venezuelan economy update and economist Jean-Philippe Pourcelot has a new post discussing five updates on the Venezuelan economy including the bolivar's latest plunge, the results of the bond swap saga, Venezuelan oil prices, and the government's newest plans to tackle soaring inflation.
November 9, 2016
Morning sickness hit global markets this morning, as the world begins to digest the political earthquake that took place yesterday. Declines were recorded in major stock indices and currencies fluctuated as Republican candidate Donald Trump astounded pollsters and won the U.S. presidential election, after a divisive and controversial campaign. The result surprised the vast majority of our analysts, over 80% of whom had expected a victory for Democratic candidate Hillary Clinton, and has heightened global uncertainty dramatically. Our analysts saw Clinton as having a better economic plan, a better grasp of economics and assembling a better economic team than Trump, which combined would help fuel faster growth in the U.S. As a result, the surprise election of Trump has cast a cloud over the outlook of the world’s largest economy. While Trump’s inconsistent and impractical campaign pledges make it difficult to decipher the impact his Presidency will have, major policy changes in the U.S. could have spillover affects felt across the globe.
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