Global Economics
Highlights
Credit Crunch Watch:
US stress levels were unchanged this week, following four consecutive weekly declines, helped by a further round of relatively positive data releases. In the Eurozone, most indicators also improved but the situation remains fragile. The durability of the recent rally in sovereign debt remains in question and Portugal endured a rollercoaster week on its bond market this week with yields soaring early on before dropping back with the help of ECB intervention
3 February 2012
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The Fed moves to provide more transparency
The Federal Reserve has taken additional actions to make its monetary policy more transparent to markets. The latest moves include the release of FOMC members’expectations for the federal funds rate at the end of each of the next few years and in the longer term.
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Spain’s fiscal targets should be eased
The Spanish government has announced that the fiscal deficit for 2011 may be even worse than expected, perhaps even exceeding 8% of GDP. In response to this overshoot, the authorities have so far announced additional spending cuts and tax rises amounting to €15bn. But fiscal tightening will have to be even more severe if the government wants to meet its 4.4% of GDP deficit target for 2012.
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Consumption boosts China’s resilience but risks of a property bust still loom
With the outlook for exports subdued and investment weak, we expect industrial output growth to slow further in 2012H1. But consumption is taking up the slack and fiscal policy is set to be supportive. As a result, we only expect a relatively modest slowing in growth in 2012 to 8.4% from 9.2% in 2011.
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30 January 2012
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Country Economic Forecasts
These concise reports provide regular analysis and forecasts on economic conditions and policy developments in 191 countries. They include downloadable spreadsheets covering 10-year forecasts and 20 years of historical data for key economic indicators.
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