Friday, May 26 2017 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 9 hours 3 min ago
The world economy continues to improve, albeit within an environment in which risks are still present. In Spain, current activity trends confirm that growth remains strong. We expect GDP growth to remain around 3,0% in 2017 and 2018 (2,7%). Housing demand is picking up, as prices have stabilized or even increased significantly in certain regions.
The recovery of the Spanish economy strengthens during 2Q17. Quarterly GDP growth is estimated to accelerate up to 1.0 or 1.1%. If this forecast is confirmed, it would imply a slight upward bias on the 2017 growth considered in BBVA’s scenario (3.0%).
GDP grew 0.5% QoQ in 1Q while soft data suggests higher momentum in 2Q (BBVAe: 0.6% QoQ) and foreign trade is strong. But industrial output and retail sales decelerated in 1Q. Inflation pressures are still distant as wages growth remains subdued. Despite the more upbeat outlook and the ease of political uncertainty, risks to short-term growth remain tilted to the downside.
The economy of Castille and Leon grew 3.3% in 2016, and will still grow 2.8% both in 2017 and 2018. This will add around 40,000 new jobs in that period and unemployment shall drop to 11%. Although pre-crisis GDP per cápita level has already been recovered, creating more and better jobs remain as challenges.
Spain reached the stability target in 2016, due to expenditure containment and fiscal measures adopted in the last quarter. In 2017, in a favourable economic environment, the recent performance of public accounts suggests that the deficit adjustment continues. 2017 and 2018 stability objectives are achievable, but will require a tight control of public expenditure.
The outlook is more positive, but still with risks. Inflation continues to rise, but it is a transitory phenomenon. The end of the rate hike cycle is closer
The fight against climate change is one of the greatest challenges currently facing mankind. From the socio-economic point of view, the panorama is alarming. Experts warn that a sustained increase in the average temperature on Earth would have serious effects for millions of people
After months of persistent regulatory tightening in domestic financial markets, China’s authorities unexpectedly fine-tuned their stance of monetary prudence by injecting liquidity into the banking sector. We interpret the authorities’ strategy as “two steps forward one step back”. After the market stabilizes and absorbs their messages, they are set to leap forward again.
While part of the western world strives to find defensive strategies with which to combat low economic growth, China goes onto the attack and speeds up its economic projection and external geopolitics by means of the Silk Road project.
Both secular and cyclical factors are behind the current slowdown in auto sales. We expect auto sales to fall below 17 million units in 2017. The decline in demand could prompt a significant adjustment in the auto industry
Population growth and ageing in the U.S., and their implications on the economy
It had to happen. The Central Bank has cut the MPR (Monetary Policy Rate) by 25bp and modified its bias to a neutral one. It would be consistent with the macro scenario of the CB to cut the rate despite the fact that consensus and all the surveys were inclined - incorrectly, from our point of view - to maintain it.
Global growth accelerated in 1Q to 0.9% QoQ and 2Q data so far suggest further global momentum (1% QoQ). Confidence data remain very positive, especially for developed economies, while hard data point to higher investment. Moreover, the exports recovery remains on track, partly explained by upward trend in investment in recent quarters.
According to the results obtained from PISA Financial Literacy, students usually talk weekly or monthly about money matters, and the deal is greater with adult relatives than with their friends. Even so, there are differences among countries, both in frequency and conversational partner.
Dual economy in which many firms do not promote the accumulation of human capital,innovation and trade in international markets. The size of firms and its determinants, product market regulations and the environment for doing business are of paramount importance. All this in a more globalised world economy undergoing an unprecedented and disruptive technological revolution