« La conjoncture mondiale résiste bien, pas de récession en vue »

Les nuages s’accumulent sur l’activité économique mondiale mais dans l’ensemble elle résiste bien, mieux que prévu même. Le vrai risque c’est une erreur de politique de la Fed qui fermerait trop le robinet.

La croissance  résiste pour l’instant à la crise monétaire des émergents, au deleveraging en cours en Chine, aux craintes sur la guerre commerciale globale  et même aux erreurs de gestion multiples de gouvernements.

Le risque de récession reste faible; mais il y aura un relatif ralentissement en 2019.

Le resserrement de la politique monétaire de la Fed n’a pas encore mordu, car il est compensé par les mouvements de capitaux qui rentrent aux USA. Le logement néanmoins plafonne clairement.

Le ralentissement européen est tout à fait net et on ne va guère dépasser le petit potentiel médiocre de l’Union.

Dés ce mois le bilan aggrégé des banques centrales globales va se contracter, c’est une première.

Nous ne pensons pas que cela déclenchera des réactions tout de suite car pour que le resserrement des liquidités produise son effet il faut que le monde se mette  en risk-off, qu’il devienne attentiste, or le seuil qui déclencherai cet attentistme n’est encore atteint. Il y a encore un matelas d’optimisme, d’aucuns diraient de complaisance.

La conjoncture mondiale selon Gavyn Davies. 

Gavyn est un bon, mais il a un biais optimiste, politiquement correct.

The financial markets have been gripped in the past few weeks by an unfolding crisis in the emerging markets (EMs), stemming from a combination of deleveraging in China, tightening by the Federal Reserve and major policy errors in Turkey and Argentina.

So far, however, the volatility in EM asset prices, and the incipient tightening in financial conditions in many major EM economies, has not resulted in any significant damage to global economic growth.

Activity growth has dipped slightly since mid year, but remains somewhat above trend (see the latest monthly nowcast report).

This presumably explains why asset prices in the advanced economies (AEs) have been largely immune from EM turbulence so far, though there was a slight wobble in developed markets last week.

The global economy enjoyed a stellar year of co-ordinated growth in 2017, with activity expanding at a 4 per cent annual rate.

There was a dip in the early months of 2018, but this proved to be short lived, and the global nowcast rebounded to above 4.5 per cent by mid year.

Since then, it has remained above the 4 per cent threshold, a few tenths of a percentage point above the long term trend rate.


Among the major economies, the US has remained extremely robust, with the economy being boosted by at least 1 per cent this year by the demand effects of the fiscal stimulus. This has more than offset the tightening in US financial conditions that has followed recent Fed rate increases.  While there were concerns that the steam might be coming out of the American economy during the summer months, these fears have proved misplaced, and the economy has now returned to the 3.5 per cent growth rate observed in previous quarters (see Appendix). Economic data published in early September have been uniformly strong. Statistically, recession risks remain vanishingly low, at least until the middle of next year.

The EU has seen significantly slower growth this year, though the latest nowcasts are still slightly above trend. In the euro area, the winter slowdown was partly caused by adverse weather conditions, but the rebound since then has been somewhat unconvincing, including in Germany. It seems that euro area growth has now “normalised” at about 1.5 per cent, well below last year’s cyclical peak.

In the UK, Brexit risks are looming large in economic commentary, but activity still seems surprisingly unaffected, and the nowcast remains at 2 per cent, only a little below trend.

Asian growth has also been a bit better than expected, given recent concerns about trade wars and Chinese deleveraging.

The Chinese nowcast was strong throughout the mid year period, but that seems to have been a false signal, and growth has now subsided to just below 7 per cent. We are investigating this rare “miss” by the China model.

Forecasts from the nowcast models

As we have explained previously, the nowcast models also produce statistical projections for global growth that are driven mainly by the starting point for growth, and then an end point that is determined by the model’s estimate of the long run underlying growth rate. Although these forecasts are somewhat mechanistic in nature — making no allowance for expected policy changes or the effects of other idiosyncratic shocks — the projections are hard to beat in practice.

The latest projections for 2018 and 2019 are shown in the graphs below.

The forecasts suggest that global growth will slow down progressively through 2019, with much of the slowdown stemming from the US economy. Nevertheless, the downward path in US growth is predicted to occur more gradually than is shown in the consensus forecasts from independent economists, so slight upward amendments to US growth forecasts remain likely again next year.

Our models also expect activity growth in China to remain above the rates projected by the consensus. The main reason for this is that the model’s estimate for long run underlying growth in China has stopped falling, and is currently at 6.9 per cent, well above the authorities’ official growth targets.

By contrast, the nowcast models remain more pessimistic than the consensus about growth in the Euro Area, as they have been throughout 2018. The implication is that EA growth may return towards its trend rate somewhat more rapidly than expected next year, opening the possibility of further downgrades to consensus projections.

3 Downside risks to the forecast:

Although the nowcast models predict some slowing in global growth next year, they suggest that recession risks will remain remote in all of the major economies. However, the risks to these statistically-based forecasts are probably skewed downwards:

1 A hostile Fed.

This seems to be by far the biggest threat to the US and global upswings. Although Chairman Powell went out of his way to deliver a dovish message about inflation at Jackson Hole in August, activity data have remained very firm and inflation is at target. Upward surprises to inflation are fairly likely next year, with the Fed being forced eventually to raise rates by more than shown in the benign path currently built into the markets.

2 China deleveraging and tightening in EM financial conditions.

These factors, while dangerous, have not yet shown up in the nowcasts, partly because they have affected countries not covered by our models (especially Turkey, Argentina and South Africa). However, contractionary EM shocks eventually dragged down the advanced economies in 2013 and 2015, and could easily do so again next year.

3 Trade wars. 

Business surveys and trade reports have failed to identify much effect so far, but weakening manufacturing orders have appeared in PMI surveys for Q4. If President Trump implements his latest threats aimed at a further $200 billion of Chinese imports, the damage to US and Chinese growth may rise to a few tenths of a percentage point. This is clearly a wild card for next year.

A toxic combination of these risks could expose the many structural weaknesses that still remain within the financial system, a decade after the collapse of Lehman Brothers.

Appendix — Nowcasts for the Major 4 Economies





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