Global Economic Outlook and Risks

Transcription

1 Global Economic Outlook and Risks Global Finance Conference, Hofstra University Matthew Higgins, Vice President, Research & Statistics Group May 5, 2017 The views expressed here are those of the author, and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.

2 Roadmap Global economic performance since the financial crisis Recent signs of stronger global growth Temporary rebound or return to stronger trend? Advanced economies struggle to escape lowflation China s rebalancing challenge Implications of potential U.S. trade restrictions

3 Advanced and EM Economies: GDP Growth Percent change from year-ago quarter China Other EMEs Advanced Economies Sources: National authorities, authors calculations. Individual economies growth rates weighted by lagged U.S. dollar GDP

4 Global Economy ex. China: Real GDP Performance Index, 2008:Q1 = 100 ( GDP-weighted average ) Pre-crisis trend Note: Trend measured by growth over Real GDP Sources: National authorities, authors calculations. GDP for individual economies weighted by lagged U.S. dollar GDP.

5 4 Evolution of Global Market Growth Forecasts Percent, CY/CY Sources: Blue Chip Economics, Consensus Economics. Figures are GDP-weighted averages for five AEs (with the euro area counting as one) and 25 EMEs

6 60 Citigroup Economic Surprise Indexes Percent positive or negative* Emerging Economies Advanced Economies *Weighted by series historical FX impact

7 Global GDP Growth and Composite PMI 8 Percent SAAR Diffusion Index 65 6 Correlation = GDP Growth Composite PMI Sources: Eurostat, Markit Economics April

8 Global Manufacturing PMI 57.5 Diffusion Index Average :Q1 = 53.7 Average :Q3 = April Source: Markit Economics

9 12.5 Global Industrial Production Growth Percent SAAR, rolling 3-mo. basis Average :Q1 = Average :Q3 = Feb Source: CPB World Trade Monitor. Data exclude construction

10 Global trade far outpaced production until recently Global Industrial Production and Export Volumes Global Industrial Production and Export Volumes :Q1 = 100, 3mma :Q1 = 100, 3mma Exports Production Production 100 Exports Source: CPB World Trade Monitor Source: CPB World Trade Monitor.

11 Manufacturing Inventories, Asia ex. China 15 Percent change, annualized 6-mo. basis March Sources: METI, KOSTAT, MOEA, Haver Analytics. Data are in real terms, and are a weighted average for Japan, Korea and Taiwan.

12 Global Commodity Prices 120 Indexes, 2015:01 = 100 $U.S./bl Softs (LHS) Metals (LHS) Brent crude (RHS) Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 20

13 2400 U.S. Baker-Hughes Oil and Gas Rig Count Raw rig count Source: Oil and Gas Journal Weekly.

14 Advanced Economy Real GDP 115 Indexes, 2008:Q1 = United States Japan Euro area

15 G-3: Unemployment Rates Percent change from year ago 12.0 Official NAIRU estimates Euro Area United States Japan Sources: BLS, Eurostat, Ministry of Health, Labor and Welfare. NAIRU estimates from Congressional Budget Office, European Commission and Bank of Japan.

16 12 11 EC Natural Rate Estimates and Projections Percent Source: European Commission. All figures are from the Autumn forecast round.

17 G-3: Core Consumer Price Inflation 2.5 Percent change from year ago United States Euro Area Japan Sources: BEA, Eurostat, BoJ. U.S. inflation measured using the PCE index

18 AE Core Inflation Performance with Negative Policy Rates Country Date Adopted Initial Core Inflation Current Core Inflation Japan January Sweden February Switzerland December Denmark September Euro Area June Sources: National sources, OECD. Policy rates are as follows: Japan, marginal current account balances; Sweden, repo rate; Switzerland, 3 - mo. LIBOR target; Denmark, CD rate; Euro Area, deposit rate.

19 110 Credit to Private Nonfinancial Sector ( % GDP ) Advanced China Other EMEs Sources: BIS, IMF. Credit is from all sources, and measured at market value. Countries weighted by GDP at PPP.

20 China and other EMEs: Capital Spending as a Share of GDP 50 Percent China Other EMEs Source: WEO database

21 China: Non-financial Credit by Source $U.S. trillions, as of end-march 2017 Corporate & muni bonds, $3.7 Foreign bonds/loans, $0.3 Shadow finance*, $6.5 Domestic bank loans, $16.6 Source: CEIC, PBOC, BIS, staff estimates * Includes estimates for additional trust credit and bank claims on non-bank financial institutions. Muni bonds have been recently swapped for corporate bank loans

22 U.S. Merchandise Trade by Partner ( $U.S. bn. ) Country or Region Exports Imports Balance World 1,455 2, Canada Mexico Euro area Asia ex. China, Japan South America China OPEC* Japan Europe ex. EMU, UK United Kingdom Miscellaneous Source: U.S. Census Bureau. Figures are for the 12 months through December * Excluding Venezuela.

23 U.S. Merchandise Trade with Canada ( values for 2016, $U.S. bn. ) Exports Imports Total Capital Goods ex Autos Motor Vehicles and Parts Passenger Cars Auto Parts and Trucks Industrial Supplies Consumer Goods Food and Beverages Other Source: U.S. Census Bureau.

24 U.S. Merchandise Trade with Mexico ( values for 2016, $U.S. bn. ) Exports Imports Total Capital Goods ex Autos Motor Vehicles and Parts Passenger Cars 4 24 Auto Parts and Trucks Industrial Supplies Consumer Goods Food and Beverages Other 8 8 Source: U.S. Census Bureau.

25 Current and Hypothetical MFN Tariffs Rates on U.S. Imports from Mexico ( percent ) NAFTA MFN* Total Capital Goods ex. Autos Motor Vehicles and Parts Passenger Cars Auto Parts and Trucks Industrial Supplies Consumer Goods Food and Beverages Other Source: U.S. Census Bureau; United States International Trade Commission. * Implied MFN tariff rate is derived from duties actually paid in 2016 on U.S. imports from Brazil, China, Japan, and the EU, weighted to reflect the commodity composition of imports from Mexico.

26 U.S. Trade Balance with Mexico USD Bn Manufacturing Balance At Value Added High Estimate USD Bn Low Estimate Manufacturing Trade Balance Source: Census Bureau; OECD; Koopman et al. The upper and lower bounds of the adjusted manufacturing balance are derived using estimates of the share of U.S. value-added in bilateral Mexican imports from Koopman, Powers, Wang, and Wei (2010) and the OECD TiVA database, respectively.

27 2500 U.S. Corporate Profits by Source $U.S. billions, annual rate Domestic plus foreign profits Q4: $690 billion Domestic profits (net) Source: BEA. Domestic profits are net of payments to foreign equity holders.

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