Economic Research presents its Q2 2018 Global Economic Outlook and regional updates (North America, Latin America, Asia, Africa, Eastern and Western Europe)

1. World GDP growth remains on a solid footing albeit being less synchronized Three shocks since Q1: stronger than expected yields, higher commodity prices and higher (geo)political risk

  1. The growth peak seems behind us
  2. Diverging growth engines as: 
  3. Political risk is expected to persist
  4. The Fed will continue pushing global rates higher
  5. Effects from old fiscal stimulus measures start to fade away (China, Japan, US) but new one kicks-in (Europe)
  6. Multi-speed normalization of monetary policies will diverge the trend in financial conditions
  7. FDI flows soften amid higher protectionism


2. The markets are likely to increasingly sanction  the weakest  in the loop: Stress for currencies in the some of the vulnerable emerging markets: Turkey and Argentina


3. Brent oil prices at 72 USD/bbl in 2018 and 69 USD/bbl in 2019. Spot price mid-June 2018 at 75 USD/bbl.


4. A temporary surge in inflation expected in Q3 18 on the back of higher oil prices and depreciating currencies.


5. USD to further appreciate in the next 6 months (+4.5%). EUR/USD: 1.10 at end-2018; 1.17 at end-2019.