ASB Bank’s Post

With interest rates on the move (OCR and other impacts), take some time to get insights from Nick Tuffley and team around what's to come and what it may mean for you. Link below!

Eurozone economic report May 2024 The stage appears set for the ECB to cut interest rates in June given the improvement recorded with inflation and the absence of short-term shocks to the macro economy. On the other hand, there are concerns about the sticky unemployment rate in the region; the age-long, weak consumer confidence, and fiscal stability risks on the back of recurring fiscal deficits. I examined these issues in this edition of the report See report below

#Georgia's economic outlook 2024 and key sectors overview - #Growth. We forecast a real GDP growth rate of 5.4% in our baseline scenario and 6.0% in the upside scenario for 2024. - #Inflation. We forecast inflation to remain close to the target and anticipate the central bank to cut key rate by 100bps to 8.5% by the end of 2024. - #USDGEL. We expect average ₾/$ at 2.7 in 2024 (in the report you can find average ₾/€ and ₾/£ forecasts). Details on macro forecasts and key sectors are available here

Key highlights of Georgia’s economic outlook

📉 Economic growth falls for third straight quarter New data shows the economy has drastically slowed, which is likely to reduce inflation – and, potentially, convince the Reserve Bank to stop raising the cash rate. Australian Bureau of Statistics data confirms that economic growth has continued trending down: * Dec-22 quarter = 0.9% * Mar-23 quarter = 0.5% * Jun-23 quarter = 0.4% * Sep-23 quarter = 0.2% A slowing economy means weakening consumer spending, which in turn should mean lower inflation. The Reserve Bank is trying to walk a fine line between slowing down the economy enough to crush inflation – but not so much that it triggers a recession

Central Bank Predicts Economic Contraction Amid Global Challenges The Central Bank forecasts a 1.3% GDP drop due to challenging global trade. Lower-income families struggle with inflation, while higher earners recover faster. Local pharmaceutical exports decline, along with a 50% drop in 'contract manufacturing'. Employment remains high, but targeted support could ease inflation’s impact. This year's GDP shrinks by 1.3%, and domestic demand weakens. Inflation hits 5.2% this year, dropping to 2.3% next year. Core inflation, excluding food and energy, stands at 4.4% and is expected to be 2.9% next year. Global demand poses a significant risk, falling more than predicted. The Bank monitors inflation and wages closely, urging adherence to fiscal guidelines for budget credibility, particularly concerning the recent Budget's deviation from the 5% spending rule. Read more in the article below 👇👇

The global economy is growing faster than expected only a few months ago thanks to resilient US activity while inflation is converging more quickly than expected with central banks’ targets, the OECD said on Thursday, upgrading its outlook. The global economy would maintain the 3.1 per cent growth rate seen last year and pick up marginally to 3.2 per cent next year, the Organisation for Economic Cooperation and Development said, upgrading forecasts dating from February for growth of 2.9 per cent this year and 3 per cent in 2025. A faster than expected fall in inflation set the stage for major central banks to begin rate cuts in the second half of the year while also fuelling gains in consumers’ incomes, the OECD said in its latest Economic Outlook. #business #OECD #economy

Our latest Quarterly Forecasts are now out: Spring shoots will take time to flourish There are some positive signs in the economy: the housing market and business confidence are on the rise. Nevertheless, a healthy dose of caution remains wise. The economy appears past its worst at a headline level, thanks to the spending tailwind of the surge in migration. But per-capita GDP is likely to edge down into 2024 while unemployment rises, with the lagged impact of past OCR increases still working its way through households’ wallets. Inflation is coming down but will still take until late 2024 to get back into the 1-3% target band. Interest rate pressure will remain over 2024. The final caution is that the global environment remains soggy, with added risks of widening military and political conflict. Interest rate increases are still restraining the developed world. And China’s post-COVID rebound has been underwhelming, putting downward pressure on NZ key commodity exports and constraining the tourism sector’s rebound. You can read more here: https://lnkd.in/gaTUaUjH

Check out this groundbreaking post from the FMI predicting an astounding 150% inflation rate by the end of the year, with a projected drop to 45% by 2025. Their outlook also forecasts a 2.8% economic downturn in 2024, but anticipates a significant recovery in the coming year. Get the full scoop here: https://ift.tt/BKuSVto

The U.K.’s “sluggish” growth prospects have put it on course to be the worst-performing economy of all advanced nations next year, according to the OECD - OCDE. The downbeat prediction comes as the global economy shows signs of recovery, with growth forecast to remain steady at 3.1% in 2024, before rising modestly to 3.2% in 2025. Alvaro Pereira, director of the OECD’s policy studies branch, told CNBC the forecasts indicated that central banks’ efforts to quell inflation were working. Read more: https://cnb.cx/3wknU2A