• We revise our GDP growth forecast down on oil output, which is constrained by the operating environment
• The security situation has worsened substantially in recent months
• Oil potential remains vast but thwarted for now
• The non-hydrocarbon sector continues to show subpar metrics
• Moody’s has downgraded Bahrain again
• Refinery output capacity should rise by 38%
• Worries over the impact of eventual US tightening and policy actions in China may have affected markets, but Asia’s underlying macro resilience remains intact. Domestic demand indicators have been holding up. We have downgraded our 2013 growth for...
• Despite a modest planned increase in 2013 spending, budget oil-revenue assumptions are still optimistic
• Augmentation of revenue from Nigeria’s Excess Crude Account is still possible
• Calls for greater monetary easing, given near-term growth c...
• Fiscal policy is likely to be constrained in 2013 in a number of Sub-Saharan African sovereigns
• In some countries, debt levels have increased to worrying levels
• Reducing energy subsidies can alleviate the pressure on public finances
• Gradual recovery in real GDP looks likely in 2013
• Inflation concerns mean the policy rate should remain on hold until 2014
• Oil will provide a long-term boost to growth, but production is still several years away
• Ghana surprised markets with its admission of spending overruns in 2012, resulting in a deficit of 12.1% of GDP
• Despite reforms, in 2013 – typically the most benign year of the political cycle – the deficit narrows to only 9% of GDP
• Large de...
• Greater certainty post-election is required for markets to rally
• Economic recovery is evident from the high-frequency data
• Managing fiscal devolution post-election will be a key challenge
• Sub-Saharan Africa’s growth momentum continues to be robust. New resource discoveries, firm trends in credit growth underscoring domestic consumption, and increased infrastructure investment are all important drivers of the region’s growth trend.
Top 3 data/events
• Nigeria – Long NGN 5Y trade target revised to 11%
• Taiwan – Inflation expected to pick up, exports to continue to improve
• Commodities – Rising speculative positions on Brent and gasoil
• Market focus
• Case for AXJ rotat...
• China data expected to show inflation and growth moderating in May
• South Korea and Australia likely to leave interest rates on hold
• We expect rate cuts in Uganda and Kenya
• European Central Bank could leave a window open for future action...
• Elections in France, Greece, Germany and Italy add to uncertainty
• Rising European unemployment is raising the political temperature
• UK needs more QE soon, but the BoE will likely wait another month
• China’s economy still on track to troug...
• G20 will discuss boosting IMF funds as euro-area stresses return
• FOMC, Bernanke press conference, Q1-2012 GDP in focus in the US
• BoJ set to expand its asset-purchase programme
• The French presidential election kicks off a series of euro-a...
• Economic data from Asia, Europe and US to show mediocre growth
• Reserve Bank of India is expected to cut rates by 25bps on 17 April
• German sentiment data to soften; Spain’s bond sale is in focus
• S. Africa inflation to see temporary dip; r...
Key events and data
• India – Improved core-sector activity to support February IIP
• Indonesia – BI expected to keep its policy rate unchanged
• Philippines – Export growth likely remained positive in February
• Q2 brings transit...
• Macro outlook
• FX outlook
• Rates outlook
• Commodities outlook
• Corporate strategy
• Central bank strategy...
• We examine which countries within the region would benefit from an oil shock
• Brazil will eventually benefit, due to the major discoveries in the pre-salt layers
• Chile would be the economy most negatively impacted by an increase in oil prices...
• Looking for confirmation of a genuine US recovery
• China’s PMI is expected to indicate ongoing weakness
• Interest rates likely on hold in South Africa and Turkey
• Surveys in Europe are expected to show fragile sentiment...
Key events and data
• Singapore – We expect February inflation to have ticked up to 5% y/y from 4.8% prior
• Taiwan – February’s IP likely rebounded
• Colombia – We expect Banrep to raise the base rate to 5.50%
• US-based equity PM...
• Euro-area PMIs to drive expectations for H1-2012 activity
• The UK budget is in the spotlight; austerity is here to stay
• Colombia central bank to deliver one last 25bps hike
• Nigeria’s MPC to remain on hold; risk is for a tightening...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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