Economic Snapshot for G7 Countries
July 27, 2021
Global economic activity is set to rebound in 2021
The global economy will rebound this year on expansive fiscal and monetary stances and the vaccine rollout. However, fastspreading Covid-19 variants will lead to stop-start restrictions in some countries, weighing on activity. Potential vaccine-resistant strains of the virus, supply constraints and U.S.-China tensions pose downside risks.
Global inflation seen increasing on sizable stimulus
Global inflation should increase this year from last—particularly in developed economies—amid sizable stimulus, higher commodity prices, supply bottlenecks and recovering economic activity. However, inflation should decline in some developing economies amid reduced currency pressures and ongoing economic slack.
In July, the ECB adopted a new inflation target of 2%, above the previous target of “below, but close to, 2%”, and suggested it would keep rates lower for longer. Meanwhile, the Bank of Canada trimmed its QE program amid a recovering economy, and the PBOC cut the reserve requirement ratio to ward off downside risks to growth. G7 rates are seen on hold until 2022 at the earliest.
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Major Economies Economic News
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Switzerland: KOF Economic Barometer deteriorates but remains elevated in July
July 30, 2021
The KOF Economic Barometer came in at 129.8 in July, down from June's 133.3.
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Germany: Business confidence declines but remains in optimistic terrain in July
July 29, 2021
Business confidence fell to 100.8 in July from June's 101.7.
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Germany: Consumer sentiment expected to stagnate in August
July 29, 2021
The GfK consumer climate index is expected to stabilize at July’s minus 0.3 in August, as more infectious Covid-19 strains spread and vaccine uptake slowed down notably despite sufficient availability. The headline reading was underpinned by backward-looking data for July, which is released at the same time and showed a diverging trend.
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United States: GDP growth continues to gather traction in Q2, but undershoots economists’ expectations
July 29, 2021
GDP growth gained traction to 6.5% in seasonally-adjusted annualized rate terms (SAAR) in the second quarter, from 6.3% in the first quarter, though this figure considerably undershot economists’ expectations. Private consumption roared ahead with 11.8% growth in the second quarter, which was above the first quarter's 11.4% expansion, driven by the return of Americans to restaurants and other in-person activities.
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United Kingdom: Housing market momentum ebbs in July
July 28, 2021
According to the Nationwide Building Society, house prices in the United Kingdom fell 0.5% month-on-month in July, following June’s 0.7% growth.
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