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Economics Chartbook / Macro & Markets Outlook

06261aa6f7c2c702da46fc3167e51a8814508634daf9d94fabb8d1ef595da48e;;[{"layout":"detailed","uid":2683,"publicationDate":"26 Mar 24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2024_186321.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJACkeUMzD3sVeHqwEVRGV0E=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Chartbook - Global monetary policy approaches turning point","titleDe":"","titleIt":"","product":"The Unicredit Economics Chartbook","synopsis":"<p><ul class=\"ucrBullets\"><li><strong>Global: <\/strong> Global GDP will likely grow by 2.9% this year and by 3.1% next year. This is subdued compared to historical averages, reflecting the lagged effects of tight monetary policy, reduced household savings buffers, softening labor markets, and less supportive fiscal policy. Disinflation remains on track, despite core inflation being stronger than generally expected at the start of the year. Services will likely contribute more to disinflation ahead as labor markets are softening, short-term inflation expectations of firms and households have eased meaningfully, and firms report finding it harder to pass on rising input costs to consumers. Most central banks are getting closer to cutting interest rates, while the BoJ bucked the global trend by exiting negative rates.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>US: <\/strong> We continue to see GDP growth slowing to 1.8% this year and to 1.0% in 2025, down from 2.5% last year, as the strength of the consumer is likely to wane. We expect CPI inflation to fall to slightly above 2% by the end of this year, with core inflation following one quarter later. Further progress on disinflation is likely to come from housing and non-housing core services. The Fed will likely cut interest rates by 125bp this year, starting in June, and by 100bp next year. We expect an announcement on slowing the pace of Quantitative Tightening (QT) in May for a June start.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>Eurozone: <\/strong> Our growth forecasts of 0.5% for this year and 1.2% for 2025 remain on track. We see a slow improvement in the quarterly GDP path as real-wage growth turning positive should support private consumption, while monetary policy will continue to restrain activity. The resilience of the labor market contains downside risks to activity and buys time for the ECB. Headline inflation will likely ease to 2% in 2H24 and fall below the ECB\u2019s goal in 2025. June remains the most likely timing for the first rate cut, but the path thereafter is highly uncertain. We still expect three 25bp rate cuts this year, one per quarter, followed by similar steps next year until a more-neutral level is reached, probably in the 2% area.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>CEE: <\/strong> We forecast EU-CEE economies will grow by 2.6% in 2024, helped by private consumption and public investment amid EU transfers, and by 3% in 2025, when foreign demand and capex are likely to rebound. We expect GDP to grow by 3.2% in 2024 and 4.0% in 2025 in Turkey, and by 2.8% in 2024 and 1.3% in 2025 in Russia as the fiscal impulse fades and real monetary conditions remain tight. Central banks in Czechia, Hungary and Russia will likely cut rates this year, while those in Poland and Turkey could start easing in 2025.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>UK: <\/strong> GDP will likely broadly stagnate this year (-0.3%) followed by modest growth in 2025 (0.8%). The labor market is clearly deteriorating, and household savings buffers have been exhausted. The Spring Budget tax cuts are unlikely to change this. Inflation will fall below 2% in April, with core inflation easing to around 2.5% in 2H24. We expect the BoE to cut the bank rate by 75bp this year, starting in August, and by 175bp next year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>China: <\/strong> We confirm our GDP growth forecast of 4.5% for 2024 and 4.3% in 2025, down from 5.2% in 2023. Although the National People\u2019s Congress set a growth target of \u201caround 5%\u201d for 2024, in line with last year, we believe that low consumer confidence, high youth unemployment, timid policy support across the board, a bloated real estate sector and an unfavorable geopolitical context will weigh on China\u2019s economic performance. The PBoC will likely continue to recalibrate different lending facilities at the margin.<\/p><\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"06261aa6f7c2c702da46fc3167e51a8814508634daf9d94fabb8d1ef595da48e","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"1","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"1"}}]

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CEE Quarterly

b9bfa7b16d127980395cf2fc0409bc0818f1304019df1145b868cfa87b8a0783;;[{"layout":"detailed","uid":2684,"publicationDate":"26 Mar 24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2024_186322.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRogQctIGg1LN12ZNTCUbMnkg==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2024_186408.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRo0doinh1HNldWMdC5AfATJw==&T=1","protectedFileLinkIt":""},"title":"CEE Quarterly - Adjustment postponed in auspicious environment (2Q24)","titleDe":"CEE Quarterly - Anpassung in ein g\u00fcnstiges Umfeld verschoben","titleIt":"","product":"CEE Quarterly","synopsis":"<p><ul class=\"ucrBullets\"><li>We expect the EU-CEE economies to grow by around 2.6% in 2024 and 3.0% 2025, with the Western Balkans growing marginally faster. We expect GDP to grow by 3.2% in 2024 and 4.0% in 2025 in Turkey and by 2.8% in 2024 and 1.3% in 2025 in Russia.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Private consumption is likely to lead the growth rebound, helped by faster real wage growth, rising borrowing and government transfers. Public investment will be the second-largest growth driver, while net exports will drag on GDP dynamics this year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>We see budget deficits of less than 3% of GDP in 2024-25 in Bosnia-Herzegovina, Bulgaria, Croatia, Czechia and Serbia, with deficits of more than 5% in Hungary, Slovakia, Poland and Romania (all at risk of excessive deficit procedures), as well as Turkey.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>We expect pro-EU parties to win more than two thirds of EU-CEE seats in the European Parliament, thereafter claiming more important positions in European institutions and NATO.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>We see a trade-off between lower budget deficits and higher inflation in Poland, Romania and Turkey, where we expect inflation targets to be missed in 2024-25. In Hungary, this trade-off could be postponed beyond 2025.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>We expect rate cuts this year in Czechia, Hungary, Romania, Serbia and Russia, although the pace of easing could slow in 2H24 and 2025 if currencies come under pressure. We expect the NBP and the CBRT to remain on hold this year, catching up in 2025.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Stable capital flows will cover C\/A deficits in all CEE countries except Bosnia-Herzegovina, Romania and Turkey, where additional funding will come from international financial institutions, sovereign external borrowing and private borrowing from abroad, respectively.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Enlargement momentum is accelerating, with the Western Balkans likely to benefit if reforms are implemented. The accession process could also bode well for rating upgrades.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>In our view, the main risks are 1. a test to NATO\u2019s resilience following a lopsided peace in Ukraine, 2. more trade protectionism and lower risk appetite for EM assets if Donald Trump is elected US president, 3. low reform momentum after elections amid voter disengagement, 4. Bulgaria\u2019s probable early elections postponing euro adoption to 2026 and 5. limited EU transfers to Hungary and Slovakia due to standoff with EU institutions.<\/p><\/li><\/ul>","synopsisDe":"<p class=\"ucrIndent\"><p>\u00dcbersetzung der englischen Originalversion vom 26. M\u00e4rz 2024<\/p><\/p><p><ul class=\"ucrBullets\"><li>Wir erwarten, dass die Volkswirtschaften in der EU-CEE-Region im Jahr 2024 um ca. 2,6% und 2025 um 3,0% wachsen werden, wobei die westlichen Balkanl\u00e4nder geringf\u00fcgig schneller wachsen d\u00fcrften. F\u00fcr die T\u00fcrkei erwarten wir ein BIP-Wachstum von 3,2% im Jahr 2024 und 4,0% im Jahr 2025 und f\u00fcr Russland von 2,8% im Jahr 2024 und 1,3% im Jahr 2025.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Der private Verbrauch wird voraussichtlich die Wachstumsbelebung anf\u00fchren, unterst\u00fctzt durch ein schnelleres Reallohnwachstum, eine steigende Kreditaufnahme und staatliche Transfers. Die \u00f6ffentlichen Investitionen werden der zweitwichtigste Wachstumsmotor sein, w\u00e4hrend die Nettoexporte die BIP-Dynamik in diesem Jahr bremsen d\u00fcrften.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>F\u00fcr Bosnien-Herzegowina, Bulgarien, Kroatien, Tschechien und Serbien sehen wir f\u00fcr 2024-25 Haushaltsdefizite von weniger als 3% des BIP, f\u00fcr Ungarn, die Slowakei, Polen und Rum\u00e4nien (alle mit dem Risiko \u00fcberm\u00e4\u00dfiger Defizitverfahren) sowie die T\u00fcrkei dagegen Defizite von mehr als 5%.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Wir erwarten, dass die pro-EU-Parteien mehr als zwei Drittel der EU-CEE-Sitze im Europ\u00e4ischen Parlament gewinnen werden und danach mehr wichtige Positionen in den europ\u00e4ischen Institutionen und der NATO einnehmen werden.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Wir sehen einen Zielkonflikt zwischen niedrigeren Haushaltsdefiziten und h\u00f6herer Inflation in Polen, Rum\u00e4nien und der T\u00fcrkei, wo wir davon ausgehen, dass die Inflationsziele in den Jahren 2024-25 verfehlt werden. In Ungarn k\u00f6nnte sich dieser Zielkonflikt \u00fcber das Jahr 2025 hinaus verz\u00f6gern.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Wir erwarten Zinssenkungen in diesem Jahr in Tschechien, Ungarn, Rum\u00e4nien, Serbien und Russland, obwohl sich das Tempo der Lockerung in 2H24 und 2025 verlangsamen k\u00f6nnte, wenn die W\u00e4hrungen unter Druck geraten. Wir gehen davon aus, dass die NBP und die CBRT in diesem Jahr ihre Zinss\u00e4tze beibehalten und 2025 nachziehen werden.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Stabile Kapitalstr\u00f6me werden die Leistungsbilanzdefizite in allen CEE-L\u00e4ndern decken, mit der Ausnahme von Bosnien-Herzegowina, Rum\u00e4nien und der T\u00fcrkei, wo zus\u00e4tzliche Mittel von internationalen Finanzinstitutionen, staatlicher Auslandsverschuldung bzw. privater Kreditaufnahme aus dem Ausland kommen werden.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Die Erweiterungsdynamik beschleunigt sich, und die westlichen Balkanl\u00e4nder d\u00fcrften davon profitieren, wenn die Reformen umgesetzt werden. Der Beitrittsprozess k\u00f6nnte auch ein gutes Zeichen f\u00fcr die Anhebung der Ratings sein.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>Unserer Ansicht nach sind die Hauptrisiken 1. ein Test f\u00fcr die Widerstandsf\u00e4higkeit der NATO nach einem einseitigen Frieden in der Ukraine, 2. mehr Handelsprotektionismus und geringere Risikobereitschaft f\u00fcr EM-Assets, falls Donald Trump zum US-Pr\u00e4sidenten gew\u00e4hlt wird, 3. eine geringe Reformdynamik nach den Wahlen aufgrund von W\u00e4hlerverdrossenheit, 4. wahrscheinlich vorgezogene Wahlen in Bulgarien, die die Euro-Einf\u00fchrung auf 2026 verschieben, und 5. begrenzte EU-Transfers an Ungarn und die Slowakei aufgrund der Blockade mit den EU-Institutionen.<\/p><\/li><\/ul>","synopsisIt":"","hash":"b9bfa7b16d127980395cf2fc0409bc0818f1304019df1145b868cfa87b8a0783","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"1","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"1"}}]

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Rates Perspectives

68e0975f705ae59b8d351f0efa82fb1fd8bbf8a7022a795e24603fdb86eaa613;;[{"layout":"detailed","uid":2863,"publicationDate":"16 May 24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2024_186523.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVLpiMgg59M4j1whJXc7H_ids5av1m-ybjA==&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - OATs navigating challenging fiscal picture","titleDe":"","titleIt":"","product":"Rates Perspectives","synopsis":"<p class=\"ucrIndent\"><\/p><\/p><p><ul class=\"ucrBullets\"><li>The deterioration of French public finances since the outbreak of the pandemic has been significant compared to that of its eurozone peers. This increases the fiscal adjustment the French government will have to carry out by end-2027 and poses downside risks to its rating.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>While the 10Y OAT-Bund spread has stabilized at 50bp, OATs have underperformed Austrian and Spanish govies recently. This suggests that investors have taken a more cautious approach towards French govies, possibly due to the challenges the government faces in pursuing fiscal consolidation.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>We think French govies will continue to underperform their peers, although the room for a significant widening is limited given that the majority of OAT holders are not very sensitive to changes in ratings. The elevated liquidity of OAT and an improving picture for fixed-income markets, in light of depo rate cuts, will also be supporting factors.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"68e0975f705ae59b8d351f0efa82fb1fd8bbf8a7022a795e24603fdb86eaa613","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"1","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"1"}}]

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Chart of the Week

0bb45640d7a3b9f543d6cd4b201508bd1f189e18ef45ab0df510076e127eadd7;;[{"layout":"detailed","uid":2902,"publicationDate":"29 May 24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2024_186568.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJKdVS3cWHP6zJuTgIqLPqg=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Higher tariffs on Chinese EVs? The EU (consumer) perspective","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<p class=\"ucrIndent\"><p><\/p><\/p><p> <ul class=\"ucrBullets\"><li>In mid-May, US President Biden announced to quadruple US import tariffs on Chinese electric vehicles (EVs) to 100%. As recently suggested by EU policymakers such as Trade Commissioner Dombrovskis, the EU is likely to also hike tariffs, but probably less markedly from the current 10%. The deadline to inform EV exporters of preliminary findings and whether the EU tariffs will be imposed expires on 5 June, with the deadline to impose provisional tariffs running out on 4 July. Both US and EU policymakers have repeatedly been complaining about China\u2019s unfair trade practices, such as government subsidies (for an overview, click here).<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li>Of course, the underlying idea of hiking import tariffs is to increase the price of Chinese EVs and, hence, to make them less attractive for domestic consumers. Our Chart of the Week shows to which extent EU consumers could be affected and may become more prone to purchase EVs from other countries. As a proxy, we look at import volumes of EVs from China, as a share of national private consumer expenditures, in 2023.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li>Despite strong growth in recent years, purchases of imported EVs from China were still negligible in the large majority of EU countries, as they typically accounted for less than 0.1% of private consumer expenditures, including the three heavyweights Germany, France, and Italy. Only in Slovenia (2\u00bd%) and Belgium (1\u00bc%), shares were significantly higher (Spain: 0.3%; Netherlands: 0.2%). Tellingly, apart from the single case of Slovenia, EV imports from the rest of the world outweighed EV imports from China by far. In other words, the positive impact of higher tariffs on European car producers including their competitors from the US, South Korea, and Japan is likely to be small.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li>One could argue that hiking tariffs is a strategic decision to signal that unfair trade practices are not acceptable and to prevent an overdependence on Chinese EVs, which could arise in a few years in the light of the latest strong growth. However, whether such a policy works for the economic benefit of the EU remains to be seen, especially for two reasons. First, the Chinese government has already signaled its readiness to increase tariffs from 15% to 25% on imported cars with large engines. Of course, since many European carmakers manufacture cars for the Chinese market directly in China, tariffs would not apply in those cases. Second, as recently pointed out by Chancellor Scholz and others, EV imports from China also include cars produced in China by companies from the EU and other countries. In other words, higher EU tariffs could also hurt non-Chinese auto companies. *These import figures also include EVs produced in China by foreign auto companies. For many EU countries, official national sales data by Chinese car producers are not available.<\/p><\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"0bb45640d7a3b9f543d6cd4b201508bd1f189e18ef45ab0df510076e127eadd7","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"1","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"1"}}]

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Sunday Wrap

5134f6204bc716c62b276fe8515f5767ed0bb90f2e6bae23c68785527a4cdfd4;;[{"layout":"detailed","uid":2889,"publicationDate":"26 May 24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2024_186555.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJKdVS3cWHP6siUQG_YZdlQ=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Sunday Wrap","titleDe":"","titleIt":"","product":"Sunday Wrap","synopsis":"<p class=\"ucrIndent\"><\/p><\/p><p><ul class=\"ucrBullets\"><li>The short-term outlook for European growth, inflation and interest rates. Moderately better on growth than I thought a few months ago. Most people agreed.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>The rapidly deteriorating geopolitical environment and what it means for the medium- to longer-term outlook. I may have surprised some of my interlocutors with just how worried I am about the speed of decline.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li>How Europe is likely to react to this increasingly fragmented world. We all worried a lot about the prospect of Europe being squeezed between the US and China \u2013 and about \u201cbeing alone\u201d if Trump wins. I pointed to the increasing prospect for new European initiatives, including the road to Capital Markets Union and to greater EU financing of common goods and the treatment of such debt.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"5134f6204bc716c62b276fe8515f5767ed0bb90f2e6bae23c68785527a4cdfd4","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"1","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"1"}}]

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