Brazil: Beyond Rio 2016 - FocusEconomics

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All eyes were on Brazil during the Rio 2016 Olympic Games, but now that they've ended what does the future hold for the country's difficult economic situation? In our latest infographic, we take a look at Brazil's economy, which has plummeted spectacularly in recent years. However, you'll see that there is a silver lining.

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Brazil: Beyond Rio 2016 - FocusEconomics

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While social and economic ties between the U.S. and most Latin American economies will remain strong, the risk of tension and a deterioration in relations under the Trump government will remain high. Trump’s potential policies in areas such as trade and immigration will have an important bearing, particularly in Mexico. However, current developments suggest that he is likely to not follow through on some of his more radical campaign pledges and the renegotiation of NAFTA that he announced after being sworn in is likely to lead to adjustments rather than a total termination of the agreement. See our latest forecasts in the Latam Regional Snapshot: http://bit.ly/1zIo8ZP

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Turkey Economic Outlook February 7, 2017 The recent revision of Turkey’s national accounts led to a significant improvement in the country’s economic position relative to that of other emerging markets, and yet it is still plagued by economic weaknesses. The government’s attempt to stimulate the economy through massive spending has so far failed to suffice as growth continues to be undermined by heightened political turmoil, the deteriorating business environment and the plummeting currency. Last month, Fitch Ratings downgraded Turkey’s sovereign bond rating to sub-investment grade, stripping the country of its last remaining investment grade status. The agency cited the unstable political and security environment as the main reasons behind the revision. In the wake of the news, the lira tumbled and hit a new record low. Complicating matters further, President Recep Tayyip Erdogan has promised to hold a referendum on constitutional reform in April, which has been in the offing for some time. In the current difficult economic environment, he will have to come up with credible arguments and tangible results to convince the voters that the proposed changes will benefit the economy in the future. Read more: http://www.focus-economics.com/countries/turkey

Is Turkey's Economic on Shaky Ground?

Is Turkey's Economic on Shaky Ground?

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Although the OPEC deal is pushing up oil prices, the reduction in crude output required to comply with the agreement will plague growth in some oil-producing countries this year. Moreover, higher energy costs will likely weigh on growth among oil-importing nations. Geopolitical risks in the region remain high and Trump’s decision to take a tougher political stance against Iran has the potential to exacerbate the situation. Against this backdrop, our panel of analysts decided to cut MENA’s 2017 growth outlook this month by 0.1 percentage points to 2.5%. If this proves correct, it will represent the weakest expansion since the trough of the financial crisis in 2009. Next year, the panel sees growth picking up to 3.2%. Read more: http://www.focus-economics.com/regions/middle-east-and-north-africa

How much will the OPEC deal help MENA in 2017?

How much will the OPEC deal help MENA in 2017?

How much will the OPEC deal help MENA in 2017?

2017 is expected to be a better year for Latin America, but important risks to the outlook loom on the horizon. The region is expected to return to growth this year before GDP rises steadily from 2018 to 2021. Following a 0.7% contraction in 2016, Latin America’s GDP is projected to increase 1.6% this year, which matches last month’s projection. With a 2.3 percentage-point upward swing from 2016 to 2017, the forecast suggests that the region is poised to experience the largest growth turnaround this year among the emerging markets. And yet, at 1.6% the region’s economic growth is far from its potential of 2.5%, which means that the recovery this year will be underwhelming. Moreover, it could be constrained further by new risks.

Will 2017 be a turning point for Latin America?

Will 2017 be a turning point for Latin America?

Will 2017 be a turning point for Latin America?

The outlook for energy prices remains positive. Prices are projected to increase 11.7% year-on-year in Q4 2017 on the back of higher prices for crude oil and its derivatives. Moreover, Henry Hub natural gas prices should continue extending last year’s gains this year, but at a more moderate rhythm. Meanwhile, forecasts for uranium suggest that the price of the radioactive element will recover this year from the losses in 2016. Read more: http://www.focus-economics.com/commodities/energy

Energy Commodities Price Outlook 2017

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Emerging markets started 2016 on a weak note, with concerns over falling commodity prices and China’s slowing economy weighing on economic outlook. However, as the year progressed, various factors have led to emerging-market strength and economic performance was better than initially expected. After expanding 4.0% in 2015, emerging economies grew by an estimated 3.9% last year, according to FocusEconomics’ Consensus Forecast. Economic growth was supported in 2016 by improving commodity prices and a broadly stable U.S. dollar. China’s economy proved more robust than initially feared and the recovery now looks to be back on track in Brazil and Russia. But what’s in store for emerging markets this year? Will growth pick up in 2017? http://www.focus-economics.com/blog/what-are-the-prospects-for-emerging-economies-in-2017

How will Emerging Market perform in 2017?

How will Emerging Market perform in 2017?

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The outlook for commodity prices remains positive this year, supported by healthier global macroeconomic dynamics. After an expected 2.6% increase in 2016, global economic activity should experience a mild improvement this year and expand 2.9%. Against this backdrop, commodity prices are expected to increase 3.6% year-on-year in Q4 2017, though this will nevertheless mark a deceleration compared to the price growth in Q4 2016. This year’s rise in prices will be buttressed mainly by higher prices for energy, base metals and agricultural commodities. Prices for precious metals are expected to be the exception. Read more: http://www.focus-economics.com/commodities

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This year, developments in the external sector and global politics will continue to influence ASEAN’s growth story. The policy decisions of a more protectionist U.S. under President Donald Trump have the potential to reverberate throughout the region. Trump’s decision on 23 January to pull out from the 12-country Trans-Pacific Partnership (TPP) has created uncertainty over the future of the deal, which was seen as particularly beneficial for Vietnam’s economy. At this stage, it is unclear whether the agreement will move forward without the U.S. or if a new alliance could take its place. Brexit will also continue to play a role in ASEAN’s growth story as Singapore is particularly exposed to the potential fallout. Domestically, the timing of elections in Malaysia and Thailand will continue to be monitored, and early votes could take center stage. Read more: http://www.focus-economics.com/blog/posts/what-to-expect-in-asia-for-2017

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The Korean economy has been plagued by faltering industries, highly indebted households and dwindling export volumes. Uncertainty after the impeachment of President Park Geun-hye is not helping matters, but is there a silver lining? Economist David Ampudia provides some insight: http://www.focus-economics.com/countries/korea/news/special/president-park-geun-hye-is-impeached-ensuing-political-uncertainty-has

Korea's Economy at a Crossroads - FocusEconomics

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Donald Trump will take power in January and will govern a U.S. economy that is in its seventh year of growing tepidly at around 2%. Our Consensus Forecast for the U.S. economy this month sees GDP growing 2.1% in 2017, but this will be subject to revision in the coming weeks and months as the economic priorities of President-elect Trump become clearer. Here we analyze the immediate and possible future implications of Trump’s victory. During his campaign, Trump outlined an extremely controversial policy agenda, including—but not limited to—building a wall on the U.S. southern border with Mexico, renegotiating NAFTA, cancelling or reforming the Affordable Care Act (Obamacare), imposing punitive trade tariffs on China and cutting taxes for the wealthy. The unexpected victory of Trump in November’s election and the resultant uncertainty over future U.S. policy will have serious ramifications for both the domestic and global economies. http://www.focus-economics.com/blog/united-states-economy-trump-impact

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The French economy has come under the spotlight again after disappointing GDP growth in the third quarter. Even the French government has now finally admitted that its 1.5% growth forecast for 2016 is overly optimistic, long after our analysts downgraded their forecasts. Ironically, one of many factors that has dragged on economic growth in France this year has been the ostensibly pro-growth labor reform introduced in the summer, or rather the strikes over it. These weighed on domestic demand earlier this year and will thereby play a part in penalizing France’s overall GDP growth in 2016. This calls for a closer look at the labor reform and what it means for French GDP growth going forward, particularly in a short-term perspective. Such a structural reform, if introduced in an already robust economic context, should have positive consequences for the economy almost from the outset. In the current environment of weak demand and constrained macroeconomic policy, however, the potential losses of the reform could well exceed the potential gains in the short-run, regardless of the eventual benefits that should hopefully win over in the medium- to long-term. http://www.focus-economics.com/blog/short-term-pain-before-long-term-gain-a-look-at-french-labor-reform-and-economic-growth

French Labor Reform and Economic Growth - FocusEconomics

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A new survey by FocusEconomics shows that the majority of the 72 international macroeconomic experts polled believe the U.S. economy is suffering due to political uncertainty. Looking forward, economists from leading institutions around the world think that the U.S. economy will grow faster under Hillary Clinton’s plan in both the short- and medium-term. Overall, the broad Consensus among economists is that Clinton would manage the economy much better than Donald Trump.

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The sudden panic about a potentially imminent Italian banking sector collapse back in July has somewhat subsided for now, but sooner or later the issue will inevitably rear its ugly head again. Two months after Italian bank stocks collapsed even further in the aftermath of the Brexit vote, fears of an imminent need for a bail-in have receded as the Italian government works on plans to shore up its weakest bank, Monte dei Paschi di Siena (MPS). This will be achieved via an alternative but rather ambitious method culminating—if all goes according to plan—in a new capital injection. However, MPS, which came up short in July’s ECB stress tests, has already received capital injections in the past. Such plans to patch up banks have tended to involve kicking the can down the road rather than providing a more definitive solution to the 360 EUR billion of non-performing loans (NPLs) weighing down Italy’s banking sector, equivalent to one fifth of its GDP. If a sustainable solution is not found to clean up Italian bank balance sheets in the near future, they will inevitably constrain domestic demand and thereby weigh on the country’s already feeble growth even further. http://www.focus-economics.com/blog/the-italian-dilemma-weak-banks-pose-risk-to-already-faltering-domestic-demand

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Africa's Economic Giants - Growth Plunges in 2016 Things have not been going so well for Africa's two largest economies so far in 2016. Nigeria and South Africa have both felt the brunt of the global commodities price plunge over the last year and now they have the impact of the Brexit to contend with. The question is, when will they recover? Have a look at the infographic below to find out how we forecast growth going for Sub-Saharan Africa's two big guns through 2017. Read more about Sub-Saharan Africa's economic outlook here: http://www.focus-economics.com/regions/sub-saharan-africa

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