The document discusses 6 global macroeconomic themes for 2021:
1) A vaccine-led economic recovery will be uneven across countries and sectors in the near-term.
2) Fiscal stimulus policies are expected to remain expansive in 2021, particularly in the US with proposed stimulus packages.
3) Continued coordination between fiscal and monetary policies will support growth.
4) Concerns around rising inflation and growing public debt loads may rise as the year progresses.
5) The MENA region's economic recovery will depend on improved global conditions and higher oil prices.
6) Overall global growth is projected to rebound to around 5% in 2021, led by China, but risks remain from new COVID variants.
Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021JoseLuisSanz9
Global economic situation
The world economys recovery continues although its sustainability isn tassured in a context of pandemic outbreaks and uncertainty about its future evolution, disruptions in supply chains and inflationary pressures on raw materials and energy. The differing vaccination rates and the support policies applied in each country to lessen the pandemic s impact have deepened divergences in growth, mainly between advanced economies and low income countries.
A positive performance is expected in all world regions in 2021, although growth in sub Saharan Africa and the Middle East will be lower than in the rest of the regions. Inadequate access to vaccines and regional political instability are two of the causes of this worse performance.
Summary The global economic situation
The pandemic caused by Covid 19 and the subsequent health and economic impact led to a 3 3 fall in global GDP in 2020 with China being the only major economy to register positive growth 2 3 After a year of the pandemic, a high level of uncertainty remains about how the future will pan out in both pidemiological and economic terms With good progress in the vaccination
programs and the stimulus measures, a return of confidence is expected, as well as the disappearance of any mobility and activity restrictions This, in turn, should lead to an upturn in growth which, according to the IMF, will reach 6 provided that any virus variants and doubts on the efficiency and safety of the vaccines do not dampen these expectations Recovery will be uneven among countries and in good measure it will depend on their productive structures Those with economies dependent on tourism and
sectors that require greater social contact will feel the negative effects of the crisis for longer
The document reports on economic indicators in Spain, the Eurozone, the US, and Hong Kong. It notes that in Q1 2020, Spain's GDP contracted 4.1% year-over-year, the worst figure since 2009. Unemployment in Spain rose 8% in April compared to March. Eurozone GDP fell 3.8% quarter-over-quarter in Q1, its largest decline since records began in 1995. US exports and imports both declined in March compared to the previous month, widening the trade deficit. Hong Kong's GDP shrank 8.9% year-over-year in Q1, its worst fall since 1974, with declines in exports, imports, and private consumption.
IMF World Economic Outlook, Managing Divergent Recoveries April 2021Steven Jasmin
What was the final Global Growth post covid for 2020? The IMF's annual World Economic Outlook showed that Globally real gdp growth shrank by approximately 3.6%. Guyana was the fastest growing economy at 43.4%.
- After hitting lows in March, global equity markets rebounded in Q2 led by the US, but the MSCI ACWI index remained negative for the year. Emerging markets and large caps performed well in July.
- While equity markets recovered, the global economy is suffering with the US GDP shrinking 32.9% annually in Q2 and Germany's GDP decreasing 10.1%.
- US equity markets have become very expensive with little room for error should economic and earnings recovery not materialize as expected. Global fixed income markets did well as central banks lowered rates to support economies.
The document summarizes the results of the JCER/Nikkei Consensus Survey on Asian Economies from December 2020. Key points include:
- Economists expect Asian economies to recover in 2021 following 2020 declines due to COVID-19, but the recovery is projected to be slow and uncertain depending on vaccine effectiveness and availability.
- Growth is projected to return to pre-COVID levels for most economies in 2022, not 2021. ASEAN5 growth is forecast at -5.0% for 2020 and 4.3% for 2021.
- India's growth forecast was revised up to -8.2% for 2020/21 and 9.1% for 2021/22, still facing challenges from
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
The document provides an update on the impact of the September 11th terrorist attacks on the Scottish economy. It finds that while the global economy was already slowing prior to the attacks, the attacks deepened the slowdown. Nearly every economy has been affected and growth forecasts have been revised downwards. The US and Japanese economies are reported to be in recession already. Scotland and the UK have also been impacted by international events, though recent UK forecasts still expect growth in 2001. Monitoring the post-September 11th response in specific Scottish sectors remains difficult due to a lack of available economic data.
Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021JoseLuisSanz9
Global economic situation
The world economys recovery continues although its sustainability isn tassured in a context of pandemic outbreaks and uncertainty about its future evolution, disruptions in supply chains and inflationary pressures on raw materials and energy. The differing vaccination rates and the support policies applied in each country to lessen the pandemic s impact have deepened divergences in growth, mainly between advanced economies and low income countries.
A positive performance is expected in all world regions in 2021, although growth in sub Saharan Africa and the Middle East will be lower than in the rest of the regions. Inadequate access to vaccines and regional political instability are two of the causes of this worse performance.
Summary The global economic situation
The pandemic caused by Covid 19 and the subsequent health and economic impact led to a 3 3 fall in global GDP in 2020 with China being the only major economy to register positive growth 2 3 After a year of the pandemic, a high level of uncertainty remains about how the future will pan out in both pidemiological and economic terms With good progress in the vaccination
programs and the stimulus measures, a return of confidence is expected, as well as the disappearance of any mobility and activity restrictions This, in turn, should lead to an upturn in growth which, according to the IMF, will reach 6 provided that any virus variants and doubts on the efficiency and safety of the vaccines do not dampen these expectations Recovery will be uneven among countries and in good measure it will depend on their productive structures Those with economies dependent on tourism and
sectors that require greater social contact will feel the negative effects of the crisis for longer
The document reports on economic indicators in Spain, the Eurozone, the US, and Hong Kong. It notes that in Q1 2020, Spain's GDP contracted 4.1% year-over-year, the worst figure since 2009. Unemployment in Spain rose 8% in April compared to March. Eurozone GDP fell 3.8% quarter-over-quarter in Q1, its largest decline since records began in 1995. US exports and imports both declined in March compared to the previous month, widening the trade deficit. Hong Kong's GDP shrank 8.9% year-over-year in Q1, its worst fall since 1974, with declines in exports, imports, and private consumption.
IMF World Economic Outlook, Managing Divergent Recoveries April 2021Steven Jasmin
What was the final Global Growth post covid for 2020? The IMF's annual World Economic Outlook showed that Globally real gdp growth shrank by approximately 3.6%. Guyana was the fastest growing economy at 43.4%.
- After hitting lows in March, global equity markets rebounded in Q2 led by the US, but the MSCI ACWI index remained negative for the year. Emerging markets and large caps performed well in July.
- While equity markets recovered, the global economy is suffering with the US GDP shrinking 32.9% annually in Q2 and Germany's GDP decreasing 10.1%.
- US equity markets have become very expensive with little room for error should economic and earnings recovery not materialize as expected. Global fixed income markets did well as central banks lowered rates to support economies.
The document summarizes the results of the JCER/Nikkei Consensus Survey on Asian Economies from December 2020. Key points include:
- Economists expect Asian economies to recover in 2021 following 2020 declines due to COVID-19, but the recovery is projected to be slow and uncertain depending on vaccine effectiveness and availability.
- Growth is projected to return to pre-COVID levels for most economies in 2022, not 2021. ASEAN5 growth is forecast at -5.0% for 2020 and 4.3% for 2021.
- India's growth forecast was revised up to -8.2% for 2020/21 and 9.1% for 2021/22, still facing challenges from
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
The document provides an update on the impact of the September 11th terrorist attacks on the Scottish economy. It finds that while the global economy was already slowing prior to the attacks, the attacks deepened the slowdown. Nearly every economy has been affected and growth forecasts have been revised downwards. The US and Japanese economies are reported to be in recession already. Scotland and the UK have also been impacted by international events, though recent UK forecasts still expect growth in 2001. Monitoring the post-September 11th response in specific Scottish sectors remains difficult due to a lack of available economic data.
The document discusses the global economy during the COVID-19 pandemic. It outlines how some European countries like Denmark, Norway, Austria, and the Czech Republic are beginning to lift restrictions and reopen parts of their economies. It also discusses how South Korea and Taiwan were able to safely reopen their economies during the outbreak. The document then addresses concerns about a potential global depression, the importance of global trade to economic recovery, and approaches being taken in the US, Canada and other countries. It concludes by discussing the need for reforms to organizations like the WHO and changes to how risks are managed globally.
- The global economy is expected to stabilize in 2020 after a difficult 2019, but a meaningful acceleration is unlikely as political tensions remain and central banks have limited policy tools. Growth will likely remain around 3%.
- Emerging markets will perform better than in 2019 due to easier financial conditions, but China's structural slowdown will be a drag on prospects.
- Central banks have depleted policy ammunition as rates are low, and further stimulus measures may have diminishing returns. This puts more focus on fiscal policy, but significant action is unlikely.
- The report discusses these themes and their implications for the MENA region, particularly around oil demand and prices.
- Global growth remains subdued at 3.2% in 2019 and is projected to reach 3.5% in 2020, lower than previous forecasts due to ongoing trade tensions and policy uncertainty.
- Momentum in global activity was soft in the first half of 2019, with weaker performance in emerging markets offsetting better results in some advanced economies. Investment and consumer spending have been weak across many countries.
- Downside risks to the global economic outlook have increased since April, including potential further escalation of trade conflicts, exposure of financial vulnerabilities, and rising disinflationary pressures. Multilateral policy coordination is needed to support growth.
Here are the key points from the Central Bank section:
- The central bank has increased the public sector credit growth ceiling to 10.9% for the second half of the fiscal year, up from its previous projection of 8.5%, in light of higher growth in the first half.
- Interest rates on savings certificates offered by the central bank (around 12%) remain significantly higher than deposit rates offered by commercial banks (6-7%).
- The central bank's monetary policy statement projected GDP growth will be between 7.5-8.2% for fiscal year 2018-19.
- A priority is bringing down default loans by ensuring better corporate governance in the financial sector.
Quantic Asset Management Monthly Review April 2019
Find out more about our services by visiting https://www.quantic-am.com/en/and https://www.tirthas.com/
RED BOX, RED YEARS (THE TREND OF BUDGET, BUDGET SIZE INDEX AND BUDGET PER CAPITA IN UK)
http://iilss.net/
http://maynter.com
AWAKE LIONS (UK GOVERNMENTAL WEIGHT INDEX ANALYSIS)
UK WITH EU ACHIEVE TO WHAT? (UK POLITICAL WEIGHT INDEX ANALYSIS)
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
- The global economy is suffering due to the COVID-19 pandemic, with expectations of a significant downturn in economic activity in Q2 2020 and a potential global recession. The construction industry has been designated as essential in most areas, allowing work to continue despite disruptions.
- The residential construction sector was poised for continued growth entering 2020 but will now see declining housing starts, new orders, and demand due to social distancing and the economic downturn. Low mortgage rates and inventory should initially support home prices, but job losses could increase delinquencies over time.
- Nonresidential construction will also be disrupted, particularly sectors like oil/gas, commercial, office, lodging and transportation. Public spending had already softened
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
Macroeconomic Developments Report. September 2020Latvijas Banka
The Macroeconomic Developments Report is published on a semi-annual basis.
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
The NIFTY 50 Index is National Stock Exchange of India's benchmark expansive based securities exchange index for the Indian value showcase. In Nifty50 Cash Services Trade Nivesh provide you Nifty Intraday Trading Tips with High Profit Levels.
Statement of the monetary policy committee 19 november 2020Preggie Moodley
The Monetary Policy Committee of the South African Reserve Bank held interest rates steady at 3.5% amid ongoing economic uncertainty from COVID-19. While the global economic outlook has improved slightly, growth is expected to remain slow in 2021 as infections continue. Domestically, South Africa's economy is recovering but output levels won't return to pre-pandemic levels for some time due to lower investment. Inflation is expected to remain below the midpoint target of 4.5% over the next two years. The Committee noted downside risks to inflation in the near term and a balanced outlook over the medium term.
Export nations need to ensure that supply chains remain as intact as possible. This means that when and where credit insurers are withdrawing from covering international trade during this crisis, the government exceptionally steps in. Otherwise there is a risk a collapse of finely woven supply chains.”
The World Bank has revised its global GDP growth forecast for 2021 upwards to 5.6% due to strong recoveries expected in the US and China. However, emerging markets and developing economies continue to struggle with the pandemic and its economic impacts. The World Bank cut India's GDP growth forecast to 8.3% for fiscal year 2021-22, down from its previous estimate of 10.1%, due to the negative effects of a severe second COVID wave in India. Several other organizations like Crisil have also lowered their growth projections for India amid concerns over reduced private consumption and investment.
- Growth in 2022 will moderate from 2021 levels as central banks and governments begin removing stimulus measures, but the economic recovery is still expected to continue with firm demand.
- Household balance sheets have significantly improved, increasing savings and wealth, which will support continued strong consumer spending. Government infrastructure spending plans will also support growth.
- Supply challenges are a greater concern than demand, as supply chains remain disrupted and key production hubs like China maintain COVID restrictions, which could keep inflation elevated for longer.
- Tight labor markets may also put upward pressure on wages, supporting consumer spending but challenging the view that inflation will remain low. Central banks are expected to withdraw stimulus gradually and are unlikely to aggressively raise rates in 2022
The document summarizes a U.S. macroeconomic forecast by Cushman & Wakefield. It finds that:
1) The U.S. economy has remained resilient despite global headwinds like Brexit, with strong consumer spending and job growth powering continued expansion.
2) GDP growth is expected to be moderate at 1.6% in 2016 and 2.1% in 2017, while employment growth will exceed 2.2 million new jobs in 2016 and 1.8 million in 2017.
3) Commercial real estate markets like office and industrial will continue tightening, with office rents growing 5.5% in 2016 and 4.8% in 2017 and industrial vacancy falling further before a modest rise in
Europe’s focus is shifting from austerity to growthQNB Group
1) Austerity policies implemented in response to Europe's sovereign debt crisis are facing increasing backlash as they are seen as preventing economic recovery and growth.
2) Recent poor economic data and rising unemployment are exacerbating opposition to austerity, as seen in recent governments falling in Netherlands and Romania.
3) Upcoming elections in Greece and France will impact austerity policies, with socialist candidate Francois Hollande in France calling for more growth-focused policies.
Macroeconomic Developments Report. December 2018Latvijas Banka
Macroeconomic Developments Report:
External Demand;
Financial Conditions;
Sectoral Development;
GDP Analysis from the Demand Side;
Labour Market;
Costs and Prices;
Conclusions and Forecasts;
The Fiscal Impact of Inequality Measures. Analysis of Scenarios.
WORLD ECONOMIC OUTLOOK INTERNATIONAL MONETARY FUND UPDATEdynamo777
Global economic growth is projected to slow from 3.4% in 2022 to 2.9% in 2023 and then rise to 3.1% in 2024. Inflation is expected to fall globally from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, remaining above pre-pandemic levels. Monetary policy tightening is starting to cool demand and inflation but the full impact will not be seen until 2024. Downside risks remain from further escalation of the war in Ukraine, debt distress, and financial market repricing in response to inflation news.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Ivo Pezzuto - World Economy. Resilience or Great Reset (The Global Analyst ma...Dr. Ivo Pezzuto
The Covid-19 pandemic, like other previous crises, will certainly leave lasting economic scars around the world in the years to come, but hopefully, it will also become the catalyst of a brighter and more sustainable future, thanks to the acceleration of industries’ transformation, digitalization, consolidation, reconfiguration of supply chains, productivity enhancements, and invention of new business models. The article aims to explore some of the greatest challenges facing the world economy in the post-COVID-19 era and the major casualties and potential risks related to dramatic externality.
The article also aims to highlight unique and specific fragilities at the onset of this pandemic crisis and the urgent need to address them in order to make the world economy more resilient.
The document discusses the global economy during the COVID-19 pandemic. It outlines how some European countries like Denmark, Norway, Austria, and the Czech Republic are beginning to lift restrictions and reopen parts of their economies. It also discusses how South Korea and Taiwan were able to safely reopen their economies during the outbreak. The document then addresses concerns about a potential global depression, the importance of global trade to economic recovery, and approaches being taken in the US, Canada and other countries. It concludes by discussing the need for reforms to organizations like the WHO and changes to how risks are managed globally.
- The global economy is expected to stabilize in 2020 after a difficult 2019, but a meaningful acceleration is unlikely as political tensions remain and central banks have limited policy tools. Growth will likely remain around 3%.
- Emerging markets will perform better than in 2019 due to easier financial conditions, but China's structural slowdown will be a drag on prospects.
- Central banks have depleted policy ammunition as rates are low, and further stimulus measures may have diminishing returns. This puts more focus on fiscal policy, but significant action is unlikely.
- The report discusses these themes and their implications for the MENA region, particularly around oil demand and prices.
- Global growth remains subdued at 3.2% in 2019 and is projected to reach 3.5% in 2020, lower than previous forecasts due to ongoing trade tensions and policy uncertainty.
- Momentum in global activity was soft in the first half of 2019, with weaker performance in emerging markets offsetting better results in some advanced economies. Investment and consumer spending have been weak across many countries.
- Downside risks to the global economic outlook have increased since April, including potential further escalation of trade conflicts, exposure of financial vulnerabilities, and rising disinflationary pressures. Multilateral policy coordination is needed to support growth.
Here are the key points from the Central Bank section:
- The central bank has increased the public sector credit growth ceiling to 10.9% for the second half of the fiscal year, up from its previous projection of 8.5%, in light of higher growth in the first half.
- Interest rates on savings certificates offered by the central bank (around 12%) remain significantly higher than deposit rates offered by commercial banks (6-7%).
- The central bank's monetary policy statement projected GDP growth will be between 7.5-8.2% for fiscal year 2018-19.
- A priority is bringing down default loans by ensuring better corporate governance in the financial sector.
Quantic Asset Management Monthly Review April 2019
Find out more about our services by visiting https://www.quantic-am.com/en/and https://www.tirthas.com/
RED BOX, RED YEARS (THE TREND OF BUDGET, BUDGET SIZE INDEX AND BUDGET PER CAPITA IN UK)
http://iilss.net/
http://maynter.com
AWAKE LIONS (UK GOVERNMENTAL WEIGHT INDEX ANALYSIS)
UK WITH EU ACHIEVE TO WHAT? (UK POLITICAL WEIGHT INDEX ANALYSIS)
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
- The global economy is suffering due to the COVID-19 pandemic, with expectations of a significant downturn in economic activity in Q2 2020 and a potential global recession. The construction industry has been designated as essential in most areas, allowing work to continue despite disruptions.
- The residential construction sector was poised for continued growth entering 2020 but will now see declining housing starts, new orders, and demand due to social distancing and the economic downturn. Low mortgage rates and inventory should initially support home prices, but job losses could increase delinquencies over time.
- Nonresidential construction will also be disrupted, particularly sectors like oil/gas, commercial, office, lodging and transportation. Public spending had already softened
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
Macroeconomic Developments Report. September 2020Latvijas Banka
The Macroeconomic Developments Report is published on a semi-annual basis.
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
The NIFTY 50 Index is National Stock Exchange of India's benchmark expansive based securities exchange index for the Indian value showcase. In Nifty50 Cash Services Trade Nivesh provide you Nifty Intraday Trading Tips with High Profit Levels.
Statement of the monetary policy committee 19 november 2020Preggie Moodley
The Monetary Policy Committee of the South African Reserve Bank held interest rates steady at 3.5% amid ongoing economic uncertainty from COVID-19. While the global economic outlook has improved slightly, growth is expected to remain slow in 2021 as infections continue. Domestically, South Africa's economy is recovering but output levels won't return to pre-pandemic levels for some time due to lower investment. Inflation is expected to remain below the midpoint target of 4.5% over the next two years. The Committee noted downside risks to inflation in the near term and a balanced outlook over the medium term.
Export nations need to ensure that supply chains remain as intact as possible. This means that when and where credit insurers are withdrawing from covering international trade during this crisis, the government exceptionally steps in. Otherwise there is a risk a collapse of finely woven supply chains.”
The World Bank has revised its global GDP growth forecast for 2021 upwards to 5.6% due to strong recoveries expected in the US and China. However, emerging markets and developing economies continue to struggle with the pandemic and its economic impacts. The World Bank cut India's GDP growth forecast to 8.3% for fiscal year 2021-22, down from its previous estimate of 10.1%, due to the negative effects of a severe second COVID wave in India. Several other organizations like Crisil have also lowered their growth projections for India amid concerns over reduced private consumption and investment.
- Growth in 2022 will moderate from 2021 levels as central banks and governments begin removing stimulus measures, but the economic recovery is still expected to continue with firm demand.
- Household balance sheets have significantly improved, increasing savings and wealth, which will support continued strong consumer spending. Government infrastructure spending plans will also support growth.
- Supply challenges are a greater concern than demand, as supply chains remain disrupted and key production hubs like China maintain COVID restrictions, which could keep inflation elevated for longer.
- Tight labor markets may also put upward pressure on wages, supporting consumer spending but challenging the view that inflation will remain low. Central banks are expected to withdraw stimulus gradually and are unlikely to aggressively raise rates in 2022
The document summarizes a U.S. macroeconomic forecast by Cushman & Wakefield. It finds that:
1) The U.S. economy has remained resilient despite global headwinds like Brexit, with strong consumer spending and job growth powering continued expansion.
2) GDP growth is expected to be moderate at 1.6% in 2016 and 2.1% in 2017, while employment growth will exceed 2.2 million new jobs in 2016 and 1.8 million in 2017.
3) Commercial real estate markets like office and industrial will continue tightening, with office rents growing 5.5% in 2016 and 4.8% in 2017 and industrial vacancy falling further before a modest rise in
Europe’s focus is shifting from austerity to growthQNB Group
1) Austerity policies implemented in response to Europe's sovereign debt crisis are facing increasing backlash as they are seen as preventing economic recovery and growth.
2) Recent poor economic data and rising unemployment are exacerbating opposition to austerity, as seen in recent governments falling in Netherlands and Romania.
3) Upcoming elections in Greece and France will impact austerity policies, with socialist candidate Francois Hollande in France calling for more growth-focused policies.
Macroeconomic Developments Report. December 2018Latvijas Banka
Macroeconomic Developments Report:
External Demand;
Financial Conditions;
Sectoral Development;
GDP Analysis from the Demand Side;
Labour Market;
Costs and Prices;
Conclusions and Forecasts;
The Fiscal Impact of Inequality Measures. Analysis of Scenarios.
WORLD ECONOMIC OUTLOOK INTERNATIONAL MONETARY FUND UPDATEdynamo777
Global economic growth is projected to slow from 3.4% in 2022 to 2.9% in 2023 and then rise to 3.1% in 2024. Inflation is expected to fall globally from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024, remaining above pre-pandemic levels. Monetary policy tightening is starting to cool demand and inflation but the full impact will not be seen until 2024. Downside risks remain from further escalation of the war in Ukraine, debt distress, and financial market repricing in response to inflation news.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Ivo Pezzuto - World Economy. Resilience or Great Reset (The Global Analyst ma...Dr. Ivo Pezzuto
The Covid-19 pandemic, like other previous crises, will certainly leave lasting economic scars around the world in the years to come, but hopefully, it will also become the catalyst of a brighter and more sustainable future, thanks to the acceleration of industries’ transformation, digitalization, consolidation, reconfiguration of supply chains, productivity enhancements, and invention of new business models. The article aims to explore some of the greatest challenges facing the world economy in the post-COVID-19 era and the major casualties and potential risks related to dramatic externality.
The article also aims to highlight unique and specific fragilities at the onset of this pandemic crisis and the urgent need to address them in order to make the world economy more resilient.
Threats To The Stock Market in 2022
• Inflation
• The Fed
• Tech Stocks
• End of Stimulus Packages
• Lack of Diversification
• Regulatory Risk
• Labour Costs
• New COVID variants
The document discusses the global economic outlook for 2023. Key points:
- Global economic growth is expected to continue decelerating in 2023 as major economies face negative factors like high inflation, slowing demand, and geopolitical tensions.
- Central banks will have to walk a fine line to cool inflation without triggering a recession by engineering a soft landing for the global economy.
- There are significant downside risks, with all large economies facing hurdles like high energy prices in Europe, interest rate sensitivity in the US, pandemic policies weighing on China, and slowing external demand pressuring Japan and emerging markets.
Macroeconomic Developments Report. March 2021Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
1) Global economic growth is slowing significantly in 2022 as downside risks materialize, including higher-than-expected inflation prompting tighter financial conditions, a sharp slowdown in China due to COVID lockdowns, and negative spillovers from the war in Ukraine.
2) Inflation has surged worldwide due to food and energy prices as well as lingering supply constraints, and it is expected to be 6.6% in advanced economies and 9.5% in emerging markets in 2022. Central banks are tightening monetary policy more aggressively in response.
3) China's economy contracted in Q2 due to lockdowns, adding to global supply chain disruptions, while the war in Ukraine continues to cause
This report provides an in-depth analysis of the current economic landscape in major economies, such as the USA, UK, China, India, Japan, and key alliances such as G7, BRICS, and ASEAN. Additionally, it offers forecasts for the future economic outlook.
Global economic outlook due to covid 19M S Siddiqui
Global coordination and cooperation-of the measures needed to slow the spread of the pandemic, and of the economic actions needed to alleviate the economic damage, including international support-provide the greatest chance of achieving public health goals and enabling a robust global recovery.
- The global economy slowed in the first half of 2019 as manufacturing orders declined and trade growth weakened due to the US-China trade war.
- Despite these headwinds, global markets posted positive returns in the first half led by developed market equities. Both stocks and bonds rose together due to diverging views on future central bank actions.
- Key investment themes for the second half include ongoing central bank easing, uncertainty around the US-China trade war, potential for an earnings recession, and safe haven assets like gold continuing to benefit from rising global risks.
1. 2023 will be a challenging year globally with high inflation, geopolitical uncertainty, and diverging economic growth across regions. The US and Europe are expected to fall into recession while China may see positive surprises.
2. Europe will fall into recession this winter due to an energy crisis, with inflation remaining above targets through 2023. The US is also at risk of recession in the second half of 2023 if the Fed's terminal rate rises close to 6%.
3. Central banks will continue tightening monetary policy aggressively to fight high inflation, which could lead to recession risks. Financial markets may see opportunities for entry points after an initial period of caution as recession risks become priced in.
The Prospect for Global Economic Recovery and where Bangladesh stands on the ...Md. Tanzirul Amin
The following article was written by me, and was published in the Economic Trends section of the Keystone Quarterly Review (Volume-31) on November 30, 2020: https://lnkd.in/g9nGxzn
The article covers the prospect for recovery of the global economy, and how Bangladesh might perform in its journey across the recovery curve. Moreover, major signs of potential economic recovery and shapes of projected recovery curves are discussed.
Magna 20 mar - impacts on global advertising - enSebnem Ozdemir
The COVID-19 pandemic will significantly impact the global advertising market in 2020. Most economists now expect a global recession in the first half of the year followed by a recovery. Key industries like travel, restaurants, and retail will see severe decreases in marketing spending due to slower sales and profits. Digital media formats will be impacted the least while linear TV and radio will see milder impacts. Overall, global digital advertising growth is expected to slow to single digits this year compared to 20% growth in recent years. The pandemic is driving changes in media consumption but supply of online impressions is increasing as more people stay home.
WORLD TOWARDS A NEW IRREVERSIBLE GLOBAL ECONOMIC AND FINANCIAL CRISIS AND BRA...Faga1939
This article aims to demonstrate that the global economic and financial crisis tends to get worse with: 1) the escalation of the global debt that threatens to put the world capitalist system in check in the face of the possibility of the explosion of the public debt bubble in the United States and the China; 2) the drastic downturn of the economy in the United States, China and the European Union, which could enter into recession in 2023; and, 3) the possibility of two giant global banks, Credit Suisse and Deutsche Bank, going bankrupt because they are on the verge of collapse triggering a new global economic and financial crisis similar to the Great Recession of 2008 and the Depression of 1929. This article raises, also, the need for President Lula's government to adopt an economic policy that makes Brazil less dependent on foreign markets in terms of export markets, international capital and foreign technology and that, consequently, prioritizes the development of the internal market.
Global growth is expected to slow to 1.8% in 2023 due to factors like tightening monetary policy, China's COVID restrictions, and the war in Ukraine. The US is forecast to narrowly avoid recession with growth around 1% as inflation falls significantly by late 2023. Core inflation is expected to decline by 2 percentage points with only a small 0.5 percentage point rise in unemployment, unlike previous high inflation periods, because this cycle's labor market overheating showed up in job openings rather than excessive employment. Europe will likely experience a mild recession while China sees a bumpy reopening and slower long-term growth.
Investors are generally happy that the worst fears of runaway inflation versus a severe recession were not realized in 2023. Nevertheless, there are still economic and investment risks for 2024 to be considered.
https://youtu.be/wBzD8WW16P8
Recently, a number of factors have come together to break the two major shackles that have held the world stuck in a static state for the majority of this year. The bigger of these two- though there was some strong interlinkage, was the announcement of a vaccine for the coronavirus; in
The document discusses global household wealth in 2019 and how it has been impacted by the COVID-19 pandemic in 2020. It finds that:
1) Global household wealth rose by $36.3 trillion in 2019 but dropped by an estimated $17.5 trillion between January and March 2020 due to market declines.
2) However, from March onward markets rebounded and wealth recovered, such that total global wealth was estimated to be marginally higher at mid-2020 than at the start of the year.
3) Despite large declines in GDP, global household wealth has held up relatively well due to asset price rebounds, though uncertainties remain around small business valuations and future economic impacts.
- A recovery in risk assets in 2023 is possible following the rare sell-off in both equities and bonds in 2022, but it is uncertain and will depend on inflation, interest rates, and the severity of the expected global recession.
- While caution is warranted, there could be opportunities for investors during the year as the global economy adjusts to higher interest rates, which represents a return to "normal" financial conditions after a long period of low rates.
- The path of any recovery remains unclear as much depends on factors like the trajectory of inflation and interest rates, as well as the depth of the expected global recession.
This document discusses the challenges facing the MENA region in adjusting to lower oil prices and a changing global economic environment. It outlines the macroeconomic context, including the impact of the oil price crash on oil exporters and importers. Other challenges covered are geopolitical tensions, a slowing global economy, and demographic trends. The document concludes by discussing priority reforms for the region, including fiscal reforms like subsidy cuts and tax increases, as well as structural reforms to improve competitiveness, such as enhancing the business environment and investing in human capital. It provides Saudi Arabia as a case study of a country implementing reforms.
China's Current Challenges – A Dummies GuideAmir Khan
China's economy has been slowing in recent years due to both cyclical and structural factors. Some of the key structural challenges include demographic changes as China ages, excessive debt accumulation, and diminishing returns from investment and catch-up growth. These challenges are of global concern given China's large role in the world economy. Policymakers are trying to stabilize growth through fiscal and monetary stimulus, but reforms to address underlying issues face limitations.
Germany – How Worrisome is the Country’s Recent Slowdown?*Amir Khan
Germany's economy has recently slowed down due to factors such as the slowdown in China, Brexit uncertainty negatively impacting German exports, and environmental regulations temporarily setting back the automotive industry. This has led to declining industrial orders and weaker business sentiment surveys. As a result, German GDP declined slightly in the third quarter of 2018 and was flat in the fourth quarter, avoiding an official recession. While growth rebounded in early 2019, the outlook remains uncertain, prompting the EU Commission to downgrade its growth forecasts for Germany and the Eurozone. Policy options to address the slowdown are limited given already low interest rates and political resistance to deficit spending in Germany.
Bahrain - Making Sense of the Country's Current WoesAmir Khan
Bahrain has faced mounting fiscal and economic strains due to its heavy reliance on oil revenues and falling oil prices. This has led to a widening fiscal deficit, rising public debt, and a currency devaluation. Saudi Arabia, Kuwait, and the UAE announced support for Bahrain's economic reforms to provide stability. However, downside risks remain while Bahrain waits for a formal bailout package estimated between $3.5-4 billion annually to address its deficits and inadequate foreign reserves. Any financial support is likely to come with policy conditions requiring fiscal austerity and structural economic reforms to accelerate Bahrain's return to capital markets and address its long-term challenges.
Bahrain - Making Sense of the Country's Current WoesAmir Khan
Bahrain has faced longstanding fiscal challenges that have intensified due to falling oil prices. This has led to rising debt levels and weakened confidence in the economy. While Bahrain could seek an IMF program or regional support, it will likely need to implement difficult reforms to cut spending and improve its business environment to restore market access. Political tensions also persist, but regional allies like Saudi Arabia are committed to Bahrain's stability.
1) Thanks to stimulus measures introduced after a failed coup attempt in 2016, Turkey's economy grew strongly in 2017 at over 6%. However, growth is expected to moderate to around 4% in 2018 as some stimulus expires and base effects diminish growth.
2) The Turkish authorities implemented fiscal stimulus like VAT cuts and established a large credit guarantee fund to encourage lending, which supported domestic demand and investment. However, most of the credit fund has now been used up.
3) While exports contributed positively to growth, this may be temporary due to factors like a weaker lira. High inflation and current account deficits continue, questioning the sustainability of credit-fuelled growth.
"Emerging Markets in the Aftermath of the Commodity Price Crash – Onwards & U...Amir Khan
This document discusses emerging markets in the aftermath of the commodity price crash. It notes that many emerging markets are major commodity producers and were significantly impacted by the collapse in commodity prices from 2014. This undermined the thesis of a commodity "supercycle". While emerging markets regained momentum in 2017, ongoing challenges include global policy normalization, uncertainty around continued commodity price rises, growing trade protectionism, China's economic rebalancing, and signs that the global economy may have peaked. The document uses Saudi Arabia as a case study, noting the country's dependence on oil and efforts to implement fiscal reforms and economic diversification under its Vision 2030 plan. In conclusion, while emerging market prospects overall remain favorable, the need for commodity-dependent nations to adopt
Euro Area & Global Economy - Getting its Mojo BackAmir Khan
1) The document provides an economic analysis and overview of the Euro Area and global economy by Bank of Tokyo-Mitsubishi UFJ.
2) It finds that the global economy is gaining momentum, with synchronized growth across developed and emerging markets. Key political risks in Europe did not materialize.
3) The Euro Area economy appears to be strengthening, with surveys and data pointing to continued growth driven by domestic demand. However, inflation remains below targets.
1. The global economy is expected to see tepid growth through 2017 as aging populations and structural slowdowns weigh on major economies. However, manufacturing and trade indicators point to a synchronized pickup in growth across countries.
2. Markets are likely to remain influenced by Donald Trump's policies, which could boost growth through fiscal stimulus but also raise inflation concerns. Risk assets may perform well while safe havens like Treasuries sell off. Commodity prices may rise further due to OPEC production cuts supporting oil.
3. Commodity markets overall are set to continue improving in 2017 as efforts to reduce excess supply bear fruit, exemplified by an OPEC agreement boosting oil prices above key technical levels
This document provides a summary of seven themes to watch in global markets in 2017 according to Bank of Tokyo-Mitsubishi UFJ. The themes are: 1) tepid global growth expected to pick up slightly, 2) markets will remain influenced by policies and actions of US President Donald Trump, 3) commodity markets are expected to continue recovering from oversupply, 4) a shift from monetary to fiscal policy support, 5) emerging markets will face more scrutiny, 6) political uncertainties in Europe are expected to rise, and 7) banks are anticipated to perform well. The document outlines factors and risks underlying each theme.
Special Report - Aferthoughts on the OPEC agreementAmir Khan
1. OPEC and non-OPEC countries agreed to cut oil production by 1.8 million barrels per day in an effort to boost falling oil prices. OPEC will cut around 1.2 million bpd, with the largest cuts from Saudi Arabia, Iraq, UAE, and Kuwait. Russia and other non-OPEC countries will cut around 0.6 million bpd, led by 0.3 million from Russia.
2. The agreement led to an initial spike in oil prices over 15% to $54/barrel. However, implementation risks remain from countries like Iraq and uncertainties around continued cooperation from Russia. Oil prices are expected to remain in a $50-60/
Presentation - Populism & the Politics of Rage - the Case of the UK & US Amir Khan
This document summarizes the political events of Brexit and Trump's election, analyzing their implications. It discusses how Brexit initially caused economic uncertainty and currency volatility in the UK, but the near-term impact has been contained. While Trump's election surprised markets, reaction was muted. Long-term, both events could encourage populism in Europe and make the US more inward-looking. Brexit may also push the EU to further integrate in response.
The document analyzes recent economic developments in South Africa. It finds that the South African economy has been slowing and falling behind its emerging market peers in growth rates. Political tensions have also risen under President Jacob Zuma, which has weakened the ruling ANC party's popularity. The rand and bonds have underperformed while the stock market has performed better. South Africa faces challenges of high unemployment, deficits, and reliance on mining while also benefitting from its human capital and infrastructure compared to other African nations.
Special Report - Is the OPEC Agreement a Game Changer?Amir Khan
Contrary to expectations, OPEC managed to reach an agreement at the sidelines of the Global Energy Forum held in Algiers. But it's too early to say this will be turning for the oil market.
Special Report - Spain - Election AftermathAmir Khan
Growing political uncertainty and the fragmentation of the exiting political order among some of the developed countries of Europe appears to be here to stay. No more is this true than in the case of Spain where, in fact, there has been the absence of a functional government for almost a year now. Here's how we think the situation may ultimately play out in the country.
1) Germany has shifted from an economy reliant on net exports to one more dependent on domestic consumption in recent years. This is due to strong private household spending supported by factors like low unemployment, rising wages, and government spending on refugees.
2) However, this shift may not be sustainable long-term as unemployment could rise again and income growth may slow. Germany also still has a large current account surplus, indicating domestic investment needs to increase to balance savings.
3) For the shift to domestic demand to last, Germany needs active policies to encourage more business investment rather than savings to boost productivity and competitiveness as labor costs rise.
Btmu Economic Brief - Nigeria: Making Sense of the Naira's DevaluationAmir Khan
The Central Bank of Nigeria recently replaced its currency peg arrangement and allowed the Nigerian naira to float freely, resulting in the currency falling over 42% in its first week. While this devaluation was needed to address foreign exchange shortages caused by low oil prices and will boost Nigeria's long-term growth, it will be painful in the short-term by increasing inflation and import costs. The move also does not solve Nigeria's economic challenges, which still require reforms to tackle issues like corruption and security threats.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
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Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
1. Public
PUBLIC
January 2021
Report Series
Amír Khan
Samba Financial Group
P.O. Box6038,Dubai
U.A.E
+971 (0) 43824303
amir.khan@samba.com
This and other publications can be
Downloaded from www.samba.com
Global Macro Themes for 2021
Executive Summary
After a turbulent year – capped by the economic fallout from Covid-19 – 2021
is likely to be a more predictable one, with a major economic rebound.
However, the hangover from 2020 persists, with a new wave of Covid-19
infections and economic lockdowns. The big fear is that one or more of the new
Covid variants will prove to be resistant to all the current vaccines.
Despite these near-term fears, the central assumption is that, thanks to the roll
out of multiple vaccines and ultra-accommodative policy settings, the global
economy is set to rebound forcefully this year at around 5%, but to revert to its
long-term average approaching 4% in 2022. That said, growth will likely be
uneven and patchy across countries and sectors in the near-term. China is set
to lead the way with growth of some 9% in 2021, while the US and Eurozone—
which will continue to struggle in Q1—are expected to post growth of 5% and
4.5%, respectively.
Reflecting these expectations, markets have entered 2021 in a risk-on mode.
Buoyed by Joseph Biden’s victory, Democratic control of the Senate, and the
promise of additional stimulus that this brings, market participants have
embraced the “reflation” trade. With the Fed also confirming its commitment
to extended monetary support, equities have continue to surge. While this has
led to growing calls that the equities markets are overvalued and may even have
entered “bubble” territory, the fact that real or inflation-adjusted rates – which
determine the discount rate applied to expected earnings – are still heavily
negative, gives some comfort that the current rally has further room to run.
Last year’s pivot from monetary to fiscal policy is set to remain with us in 2021.
This will be particular true for the US, where there are likely to be two major
fiscal initiatives: the first, which has already been unveiled by the new President,
is part of the Covid relief effort and has a price tag of $1.9tn. The second, which
has yet to be detailed, will be under the headline of “Build Back Better” and
represents a major push to improve America’s creaking infrastructure, with a
particular emphasis on green initiatives. A similar narrative could also play out
in Europe, where national governments have been given greater leeway to
increase public spending with the creation of the EU’s €750bn Recovery Fund.
Within the EM space, the continuation of this “lower for longer” policy setting,
coupled with a weak US dollar, should underpin investment flows into these
markets, drawn by the allure of higher interest in a yield-starved world. EMs
also stand to benefit from China’s ongoing rebound and calmer relations
between China and the US.
Against this generally constructive global backdrop, MENA economies are set to
do moderately better in 2021. This will be driven by a recovering global
economy, higher oil prices and a potential moderation in geopolitical tensions
at the global and regional level.
2. January 2021
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Global macro themes in 2021
Introduction
The year 2020 has been like no other. The global lockdown and
mobility restrictions during the first wave of the Covid-19
pandemic triggered the most severe economic contraction in
modern history. Most economies recovered sharply thereafter,
but a second wave of infections set the economy back again. Yet
with recent progress on vaccines, and the political headwinds
associated with the US election and Brexit now behind us,
prospects for 2021 are starting to look more encouraging.
The markets, meanwhile, have continued to march higher despite
the ongoing threat posed by Covid-19 and the new variants of the
pandemic that have been detected in a number of countries. This
has reinforced the disconnect between markets and the real
economy (see chart) and is to, a large extent, explained by the
flood of liquidity that has been provided by the global central
banks. Additionally, markets have also been willing to look
through any bad news in the belief that policymakers will come
to their rescue and that, with the roll out of vaccines, better
economic times lie ahead.
Against this backdrop, we have identified six macro themes that
we think will set the tone for the markets and global economy in
2021. We will also look at the implications, if any, that these
themes may have for the MENA region.
Theme 1: A vaccine-led recovery but one that will likely be
uneven
The global economy has been on a rollercoaster ride since the
onset of the Covid-19 pandemic at the start of last year. After
contracting sharply during the height of the lockdown measures
in Q2, most major economies rebounded forcefully in Q3 as the
easing of lockdown measures and unprecedented stimulus
helped to revive economic activity, suggesting that the worst of
the hit to the global economy was over. But with lockdown
measures eased perhaps prematurely, a new wave of infections
began to break. Re-imposed lockdowns in various countries led to
further economic constraints and the Q4 data have so far been
poor. The accompanying chart shows how second-wave Covid-19
infections are weighing on European economies, jeopardising
prospects for continued growth in the early period of 2021. The
US may face a similar threat, with Covid-19 numbers there spiking
sharply higher.
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S&P 500 (Index, LHS) US Composite PMI (3-month SMA, RHS)
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US Eurozone China
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While there will clearly be logistical challenges
associated with the manufacturing and distribution
of vaccines on a wider scale, the breakthrough on
this front is set to boost household confidence and
revive private consumption.
China’s economy continues to power ahead, thanks
to fiscal and monetary support and its early exit
from Covid-related lockdown measures.
Nevertheless, both regions will benefit from progress around
vaccines – not least Pfizer/BionNtech, Moderna and Oxford
University/Astra Zeneca – which have exhibited a high level of
efficacy during test results. Indeed, the initial rollout of these
vaccines, at least among health workers/front-line staff and
vulnerable sections of society, has already started in earnest in
countries like the US and UK. That said, while there will clearly be
logistical challenges associated with the manufacturing and
distribution of such vaccines on a wider scale, the breakthrough
on this front is set to boost household confidence and revive
private consumption. There are also other reasons for optimism:
The world’s major central banks, led by the Fed, will continue
with their ultra-loose monetary policy settings. According to
the IMF they have already injected an estimated $7.5tn into
global financial markets during the crisis, with more to come.
The likely continuation of expansive fiscal policies in 2021 –
not least under the new Biden administration in the US – will
also help to backstop growth this year (see below).
Household balance sheets/incomes held up well during the
pandemic as governments stepped in to compensate for
much of the income losses through their various furlough
and/or fiscal transfer programmes. This support means that
households have entered 2021 with already high savings (see
chart). This pent-up demand should provide a further boost
to private consumption.
Geopolitical tensions and policy uncertainties are set to ease,
most notably with China-US strains cooling somewhat and a
post-Brexit trade deal now agreed. This should be supportive
of corporate confidence and capex, which has remained in
the doldrums since the onset of the pandemic.
China’s economy continues to power ahead, thanks to fiscal
and monetary support and its early exit from Covid-related
lockdown measures. Although it was the original source of the
pandemic, its handling of the first wave proved to be much
more effective, allowing confidence and activity, particularly
on the industrial/supply side, to rebound much more quickly
and durably. GDP growth was 6.5% in the final quarter of last
year. China’s revival should underpin growth in East Asian
economies in 2021, and further afield given its hunger for raw
materials.
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US & global policy uncertainty
(Index; Bloomberg)
US Global
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As a region that is heavily geared to the global
economic cycle, the Covid-19 pandemic has hit the
MENA region hard.
Taken together, these factors could propel global growth to
around 5% in 2021 (vs -2.8% in 2020), reverting to its long term
average of around 4% thereafter. China is set to lead the way with
growth of some 9% in 2021, while the US and Eurozone—which
will continue to struggle in Q1—are expected to post growth of
5% and 4.5%, respectively.
While DMs and advanced EMs should fare well this year,
populous developing markets could struggle. This will be almost
entirely due to limited access to vaccines, along with issues
around distribution and storage. But even developed markets are
likely to feel the effects of last year for some time to come: a case
in point is the US labour market, which saw >20m job losses
during the pandemic. While around half of these job losses have
been clawed back, the ranks of those that are deemed to be long-
term unemployed continues to rise and this problem is set to
persist as we progress through 2021.
The main risk to the outlook centres on the possibility that the
virus might mutate to such an extent that it becomes resistant to
the current crop of vaccines. There are already signs of more
infectious strains emerging in countries as diverse as the UK,
Brazil and South Africa, though there are as yet no signs that these
strains might be resistant to current vaccines.
Implications for MENA region: As a region that is heavily geared
to the global economic cycle, the Covid-19 pandemic has hit the
MENA region hard. The most obvious channel was the collapse in
oil prices during H1, while the drying up of tourism flows to the
region has also been damaging, especially to the non-oil
producing countries. While the likely improvement in the global
macro backdrop in 2021 represents good news for the region, the
focus on reforms—most notably economic diversification—needs
to be maintained so that the region can become more resilient in
the face of any future economic shocks.
Theme 2: Pivot to fiscal stimulus likely to remain intact
Unlike the period following the global financial crisis, when
monetary policy did most of the “heavy lifting”, the onset of
Covid-19 has seen a marked shift towards greater reliance on
fiscal policy, with the average fiscal deficit of the G7 countries in
2020 estimated to be around 15% of GDP (vs. 2.2% in 2019)
according to the IMF (see chart). This shift has essentially taken
two forms. First, most governments deployed direct transfers to
shield household incomes as the global economy came to an
abrupt halt.
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The transition toward a more activist fiscal policy
has already led to a sharp build-up of public debt.
We feel this transition for now makes sense given
that monetary policy is to a large extent already
“maxed out” in many developed countries.
We think that expansive fiscal policies are set to
remain with us through 2021, though as a
percentage of GDP they will be on a smaller scale
than 2020.
Most of the focus will be on the US, where the new
President has announced a further Covid relief
package to the tune of $1.9 bn. This will in due
course be followed by an infrastructure bill. While
the exact size of this has not been determined, it
will be aimed at upgrading the country’s creaking
infrastructure.
Second, to reduce the likelihood of permanent economic damage
and keep people employed, many governments leveraged the full
weight of their balance sheets to set up credit guarantee and
direct lending schemes to businesses.
This transition toward a more activist fiscal policy has already led
to a sharp build-up of public debt (see chart). A case in point is the
US, where in 2020 the country’s public debt ratio is estimated to
have reached more than 130% of GDP according to the IMF, up
from 105% in 2015. Similarly, Italy’s 2020 ratio is put at 160% of
GDP (up from 135% in 2015) and Japan’s at 260% (from 231%).
While this deterioration in public finances is not without its
concerns, we feel this transition makes sense given that monetary
policy is to a large extent already “maxed out” in many developed
countries. By the same token, ultra-loose monetary policy has
created ideal funding conditions for fiscal expansion. Indeed,
even the IMF – once seen as the bastion of fiscal orthodoxy – has
encouraged countries to continue to expand their fiscal spending
through the current crisis, especially on infrastructure and related
projects.
Given this context, we think that expansive fiscal policies are set
to remain with us through 2021, though as a percentage of GDP
they will be on a smaller scale than 2020. In the US, there are likely
to be two major fiscal initiatives: the first, which has already been
unveiled by the new President, is part of the Covid relief effort
and has a price tag of $1.9tn. The focus is largely on support to
low-income families and the unemployed, as well as more help
for local administrations. The second, which has yet to be
detailed, will be under the headline of “Build Back Better” and
represents a major push to improve America’s creaking
infrastructure, with a particular emphasis on green initiatives.
Democratic control of Congress points to quite a bit of this agenda
being passed this year, though probably less than some expect
given uneasiness about the size of the public debt among some
moderate Democratic senators. Still, the amounts of money
involved should give a vigorous tailwind to US growth in 2021
(with positive spill-overs for various other exporters). Longer
term, the investment in infrastructure should also help to
improve US productivity.
A similar narrative could also play out in Europe, where national
governments have been given greater leeway to increase public
spending with the creation of the EU’s €750bn Recovery Fund.
This move amounts to an important first step towards the
creation of a genuine “fiscal union” and will make borrowing costs
cheaper for individual Eurozone member states.
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The close coordination between fiscal and
monetary policy that was in evidence last year in a
number of countries is set to continue in 2021.
“1
The output gap is an economic measure of the
difference between the actual output of an economy and
its potential output. A negative output gap occurs when
actual output is less than what an economy could
produce at full capacity, while a positive output gap
occurs when actual output is more than its full-capacity
output.”
Likely consequences
Against this backdrop, fears about the potential take-off of
inflation and the management of an expanding debt load are set
to rise as we progress through 2021:
• Potential for rising inflation
With both fiscal and monetary policy set to remain extremely
accommodative this year, markets have started to fret about the
inflationary consequences, especially in the US. The fact that the
US Fed has indicated that it will let the economy “run hot” – i.e. it
will look through any overshoot in inflation beyond its 2% target
to ensure the recovery – supports this narrative. While it is true
that both food and commodity prices have risen recently, we
think that underlying inflation will remain contained for two
reasons: i) overall demand conditions in most economies remain
weak and it will take a while for this to change meaningfully; and
ii) the so-called “1
output gaps” still remain significant in most
countries and a lot of spare capacity needs to be used up before
inflation becomes a real worry.
• Management of an expanding debt load
The close coordination between fiscal and monetary policy that
was in evidence last year in a number of countries is set to
continue in 2021. A key objective behind this is to absorb the
deluge of new government bonds that are coming on to the
market in order to finance increased government expenditure. It
is also aimed at ensuring that government borrowing costs
remain suppressed. While such “financial repression” will largely
be confined to DMs, it is also likely to become more commonplace
among EM countries this year, as these countries seek to explore
new and more innovative ways of financing their fiscal deficits.
While for the time being markets have largely remained sanguine
about such developments, the recent experience of Turkey shows
that markets can easily lose confidence if they deem that the
policy path – be it fiscal or monetary –is unsustainable or
misguided.
Implications for MENA region: The MENA region has not been
immune to the economic fallout from Covid-19 and the adverse
impact it has had on individual governments’ public finances. That
said, relative to their DM peers, the fiscal outlays in the MENA
countries have been modest. Indeed, we expect this conservative
fiscal bias in the MENA region to continue through 2021. While
this might reassure the markets it is also likely to constrain the
growth trajectory.
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The MENA region, led by the GCC countries, has
cultivated close trade and investment ties with the
Asia-Pacific countries. This Pivot towards Asia will
help MENA economies to offset the ongoing
weakness in Europe and US, where the second wave
of the virus and/or mutations is hitting these
economies hard.
Theme 3: EMs set to regain their allure
The powerful stimulus delivered by developed markets’ central
banks through a combination of rate cuts and asset purchases –
and the resulting liquidity that this has created – has supported
EMs assets with, for example, EM equities outperforming their
developed market peers during H2 of last year (see chart). The
continuation of this “lower for longer” policy setting, coupled
with a weak US dollar, should underpin investment flows into
EMs, drawn by the allure of higher interest in a yield-starved
world. EMs also stand to benefit from China’s ongoing rebound
and calmer relations between China and the US.
Yet it still makes sense to differentiate between EMs, since some
have significant vulnerabilities that have been exposed by the
pandemic. Even among the larger EMs, structural impediments to
growth have started to become more apparent. A case in point is
China, where an ageing population, rising corporate indebtedness
and problems related to its shadow banking system have
adversely affected the economy’s performance in recent years.
This also applies to varying degrees to Russia, Brazil and India. The
markets have been alert to such challenges for some time now
and we see this leading to greater dispersion in returns: EMs with
stronger fundamentals may disproportionately benefit. Indeed,
Asian currencies backed by stronger fiscal fundamentals have
been more resilient (see chart). Additionally, China and some
other Asian countries have done a better job of containing the
virus and are further ahead in the restart of their economies. This
is another reason that we think they are likely to continue to
outperform in 2021. More broadly, we think that a weaker US
dollar – the result of renewed risk appetite – should support EMs
in 2021.
Implications for MENA region: the MENA region, led by the GCC
countries, has cultivated close trade and investment ties with the
Asia-Pacific countries. From a trade perspective, the fact that the
latter group has done a better job in tackling the virus and
reopening its economies is good news for the MENA region.
Additionally, this reorientation towards Asia will help MENA
economies to offset the ongoing weakness in Europe and US,
where the second wave of the virus and/or mutations is hitting
these economies hard.
NB: Countries highlighted in red are Asian countries
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Theme 4: Commodities rebound set to continue
Despite the economic fallout caused by Covid-19, the
commodities markets – led by industrial metals and copper in
particular – had a good run in 2020 after reaching a low point in
March, not least because of the recovery in the Chinese economy
from Q2 onwards. We expect this upward bias to continue in
2021, thanks to an improving global economy, the rollout of
multiple vaccines and ongoing stimulus. Yet supply may be slow
to come back online. The 2020 price drop wiped out the weaker
marginal suppliers, which will limit the supply response.
Additionally, of the suppliers that remain, it may take consistently
higher prices to convince them to reopen that mine, or hire more
oil rigs, or plant more acreage. We believe that this lagged effect
should support higher commodity prices in 2021.
The oil market is still struggling under the weight of weak demand
and elevated stocks, though market participants are focusing on
the lift to demand that effective vaccines could bring. Prices have
also been buoyed by Saudi Arabia’s unexpected unilateral
decision to cut output by 1m b/d in February. We accept that
demand will likely strengthen materially in H2 assuming vaccine
rollout goes as planned. This will allow OPEC Plus to release more
oil into the market, though it will have to calibrate this very
carefully if stocks are to be drawn down in a meaningful way.
Higher prices are also likely to provide comfort to US shale
producers, which had a very tough 2020, with at least 40
producers going to the wall. On balance, we think Brent will
average $56/barrel this year. The main risk revolves around Iran
and how much additional oil it might bring to markets assuming
the US re-joins the Iran nuclear accord. We anticipate that OPEC
Plus will work hard to convince Iran to only gradually increase its
output, but there is no guarantee that this will be successful.
We believe that fundamentals continue to be attractive for gold
and the precious metals complex more broadly. Sizeable
monetary and fiscal support and a weaker US dollar should be
supportive. That said, gold’s safe haven status is being challenged
by another hard-to-value asset: cryptocurrencies. For the
moment, though, cryptocurrencies’ volatility (not to mention
their complicated creation and ownership structure) is a turn-off
for mainstream investors.
Implication for MENA region: While oil prices have experienced
a meaningful rise recently from the lows seen earlier last year,
and currently stand at around $55/b, most MENA oil producers
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will still run fairly large budget deficits this year relative to their
historic norms. This means that they will continue to tap the
capital markets and draw on their reserves to finance these
deficits. While this is not a new development, it underscores the
longstanding need for these economies to broaden their tax base
and accelerate their diversification efforts.
Theme 5: Geopolitical tensions set to ease somewhat
Geopolitical tensions escalated sharply under the tenure of the
Trump administration. The main pressure point was trade issues
between China and the US, but Washington’s relations with Iran
also deteriorated sharply as the US withdrew from the Iran
nuclear accord. However, with the arrival of Joe Biden at the
political helm in the US, expectations are that geopolitical
tensions will dissipate somewhat.
The chief geopolitical implication of a Biden presidency is likely to
be a more predictable US approach to trade, foreign affairs and
allies. Tensions with Europe, particularly over trade and
contributions to NATO, will likely ease. The heat should also be
taken out of relations with China given what is likely to be a
calmer approach from the Biden administration. That said, US
suspicion of China runs deep and encompasses both political
parties. Washington has long been frustrated by lack of market
access, weak intellectual property protection, state subsidies and,
more recently, claims of industrial espionage. It is also alarmed by
what it sees as a more aggressive Chinese approach over
territorial disputes. For the moment, therefore, it seems that
Biden will not seek to roll back the tariffs on China imposed by the
Trump administration.
Aside from its greater predictability, a Biden administration will
also seek to foster a more “multilateral” foreign policy approach
that contrasts with the “unilateral” style that was espoused by the
Trump regime. This is likely to be evident in two key policy areas
in particular:
First, the US will re-engage with—and even take the lead
on—efforts to combat global climate change. This was
made plain on the first day of President Biden’s tenure
when he signed an executive order to re-join the Paris
Climate Accord.
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President Trump’s defeat may have come as a
disappointment to hawks in the Gulf who
appreciated his robust approach to Iran. However,
engaging with Iran should improve the political
climate in the Gulf and soften a long-standing
concern among potential foreign investors.
ESG (environmental, social and governance) issues
have become a growing part of investor discourse
over the past five years or more.
Environmental momentum will get a major push
from the US’s decision to re-join the Paris Climate
Accord.
• Second, Biden will look to re-join the Iran nuclear deal that
was agreed in 2015 in collaboration with its European allies.
Israel and the US’s Gulf allies may urge the US not to, but the
current deal lacks teeth without US involvement, and indeed
Iran appears to have pushed ahead with nuclear enrichment
since the US withdrew.
Elsewhere, the recent post-Brexit trade deal between the UK and
EU could also be positive for the global economy. Brexit
uncertainty has been a thorn in the side for both Britain and its
EU trading partners for almost five years.
Implication for MENA region: President Trump’s defeat may have
come as a disappointment to hawks in the Gulf who appreciated
his robust approach to Iran. However, President Biden’s apparent
willingness to re-engage with the Islamic Republic should yield
long-term dividends for the region. Engaging with Iran should
improve the political climate in the Gulf and soften a long-
standing concern among potential foreign investors. (Separately,
the recent announcement of a normalisation in relations between
Qatar and its GCC peers provides a welcome change to the
investment environment.) Second, President Biden is far less
likely to offer support to the US shale industry; indeed, he is more
likely to place curbs on it. This should mean less US interference
in OPEC oil policy decisions, giving greater autonomy to the cartel
and its allies.
Theme 6: ESG to go to mainstream
ESG (environmental, social and governance) issues have become
a growing part of investor discourse over the past five years or
more. But we think that 2021 could be the year when ESG’s
importance is truly cemented. There are number of catalysts that
we think are likely to drive this:
The EU and China recently released more ambitious
targets for reaching net zero emissions. This will require
major investment to make the transition happen.
Environmental momentum will get a major push from
the US’s decision to re-join the Paris Climate Accord.
This is significant given that US is the second largest
polluter in the world after China. Green infrastructure is
at the heart of President Biden’s spending plans, while
the European Green Deal and its recent fiscal spending
plan is also focused on making the European economy
more environmentally sustainable.
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• Both equity and bond investors are increasingly mindful of a
company’s (or country’s) ESG credentials. Indeed, the major
ratings agencies now include ESG criteria in their risk
assessment metrics. This trend is only going to harden as
younger, more ESG-aware investors come of age.
Implications for the MENA region: With data suggesting that the
MENA countries – and specifically the GCC nations – are some of
the worst polluters in the world on a per capita basis, more effort
needs to be made to promote environmental awareness in these
countries. This is clearly difficult given their high reliance on
hydrocarbons production and exports, and petrol is still heavily
subsidised in some. In addition, the spin-off industries from cheap
energy (steel, petrochemicals, cement, fertilisers) also have large
carbon footprints and the GCC will therefore have to work hard
to enhance its ESG credentials. That said, countries such as Saudi
Arabia and the UAE are pushing ahead with major renewable
energy projects. Corporate governance has also improved
markedly in the region over the past decade or so, and the
empowerment of women has been a notable dynamic.
Concluding thoughts/market implications
Most would agree that 2021 is likely to be a more predictable year
and one that sees a major economic rebound. However, the
hangover from 2020 persists, with a new wave of Covid-19
infections and economic lockdowns. The big fear is that one or
more of the new Covid variants will prove to be resistant to all the
current vaccines.
For the moment, markets seem to be focusing on the promise of
better times to come. Buoyed by Joe Biden’s victory, Democratic
control of the Senate, and the promise of additional stimulus that
this brings, market participants have embraced the “reflation”
trade. With the Fed also confirming its commitment to extended
monetary support, equities have continue to surge. Some warn
that a bubble is in the making, but we are reasonably sanguine,
noting that real Treasury yields (that is, inflation protected) are
still heavily negative. Given that real bond yields determine the
discount rate applied to expected earnings, negative real yields
would appear to justify stretched price-earnings ratios in the
S&P500 and other markets. Meanwhile, the pivot from “growth”
stocks (such as internet and technology) to “value” (financials,
energy and materials) has also got underway in earnest in the
belief that a recovering global economy is likely to benefit the
latter group more than the former.
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From a geographical perspective, we welcome the
recovery of the Chinese economy since Q2 of last
year and feel that it will continue to provide a
powerful tailwind to the global economy in 2021.
From a geographical perspective, we welcome the recovery of the
Chinese economy since Q2 of last year and feel that it will
continue to provide a powerful tailwind to the global economy in
2021. This will be most keenly felt in Asia-Pacific countries whose
supply chains are closely linked to the Chinese economy, but
many other raw materials’ producers will also benefit. Among the
DMs, the US stands out to us, especially given the ambitious
agenda of the incoming President to increase fiscal spending to
backstop growth in the short-term and to increase overall
efficiency of the economy in the long-term through infrastructure
and green investment. In Europe, while the renewed lockdowns
owing to the second wave present a clear worry in the near-term,
we are more optimistic about the region further out, as
vaccination programmes gain traction and former headwinds,
such as Brexit, become a thing of the past.
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Disclaimer
This publication is based on information generally available to the public
from sources believed to be reliable and up to date at the time of
publication. However, SAMBA is unable to accept any liability
whatsoever for the accuracy or completeness of its contents or for the
consequences of any reliance which may be place upon the information
it contains. Additionally, the information and opinions contained herein:
1. Are not intended to be a complete or comprehensive study or to
provide advice and should not be treated as a substitute for specific
advice and due diligence concerning individual situations;
2. Are not intended to constitute any solicitation to buy or sell any
instrument or engage in any trading strategy; and/or
3. Are not intended to constitute a guarantee of future performance.
Accordingly, no representation or warranty is made or implied, in fact or
in law, including but not limited to the implied warranties of
merchantability and fitness for a particular purpose notwithstanding the
form (e.g., contract, negligence or otherwise), in which any legal or
equitable action may be brought against SAMBA.
Samba Financial Group
P.O. Box 833, Riyadh 11421 Saudi Arabia