According to IMF in October 2019, in China, the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown and needed regulatory strengthening to rein in high dependence on debt.
With policy stimulus expected to support activity in the face of the adverse external shock, growth is forecast at 6.1% in 2019 and 5.8% in 2020 respectively. Chinese yuan is at 7.0073 against the US dollar and it edged up, supported by continued optimism over a preliminary trade deal reached between China and the US.
Markets were cheered after US President Donald Trump said over the weekend the US and China would “very shortly” sign their Phase 1 trade pact. However, the market lacked clear direction that a preliminary trade deal had been reached, but was not yet signed. The Chinese stock market is up by close to 20% YTD. The Chinese bond issuances exceeded $1776bn in 2019 as against $1376bn in 2018. Chinese economy is bouncing back, but not yet seen the acceleration.
According to IMF in October 2019, Brazil economy is expected to grow by 0.9% in 2019 and will recover to 2% in 2020 respectively. Brazil’s economy expanded 0.6% in the third quarter, beating expectations and bolstering hopes of a cyclical recovery in Latin America’s largest country. The Brazil real was at 4.07 against the US dollar and has weakened by more than 5% YTD. Brazil capital market is up by 32% YTD. Brazil bond issues exceeded $48bn in 2019 as against $38bn in 2018.
According to IMF in October 2019, Russia is expected to grow at 1.1% in 2019 and 1.9% in 2020 respectively. The Russian economy expanded at an annual rate of 1.7% in the third quarter of the year. Both the agricultural and industry sectors recorded strong growth over the quarter at annualised rates of 5.1% and 2.9% respectively. The expansion also comes against a backdrop of successive rate cuts from the Central Bank and falling inflation. GDP growth in the third quarter of 2019 was lower than in the corresponding period of last year. The Russian rouble is at 62.05 against the US dollar and has strengthened by more than 10% YTD this year. Russia capital market is up by 41% YTD. The Russian bond issuances exceeded $53bn in 2019 as against $34bn in 2018.
According to IMF in October 2019, growth in South Africa is expected at a more subdued pace in 2019 at 0.7% reflecting a larger-than-anticipated impact of strike activity and energy supply issues in mining and weak agricultural production. It is expected to recover to 1.1% by 2020. The South African Rand is at 14 level against the US dollar and has strengthened by more than 1% YTD. The African capital market up by close to 9% YTD. The South Africa bond issues is close to $11.7bn in 2019 as against $9.1bn in 2018.
According to IMF in October 2019, India’s economy is set to grow at 6.1% in 2019, picking up to 7.0% in 2020. The downward revision for both years reflects a weaker-than expected outlook for domestic demand. Declining consumption and investment, and falling tax revenue, have combined with other factors to put the brakes on one of the fastest growing economies in the world. India’s economy grew at its slowest pace in more than six years in the July-September period, down to 4.5% from 7.0% a year ago. Addressing the current downturn and returning India to a high growth path requires urgent policy actions. However, India has limited space to boost spending to support growth, especially given high debt levels and interest payments. The Indian rupee was at 71.27 levels against the US dollar, amid a sustained rise in crude oil prices and muted opening in domestic equities. Indian capital market is up by 12% YTD. The Indian rupee has weakened by more than 2% YTD in 2019. The Indian bond issuances is close to $98bn in 2019 as against $101.1bn in 2018.
The emerging market and developing economy group is expected to grow at 3.9% in 2019, owing in part to trade and domestic policy uncertainties and to a structural slowdown in China, rising to 4.6% in 2020. Emerging economies’ central banks have been cutting policy rates since the second quarter of 2019 and are expected to ease policy further in the first half of 2020. Emerging economies are under stress to reignite growth.
n The author is Group CEO of Doha Bank.
from Gulf Times https://ift.tt/2saO0Ed
Comments
Post a Comment