ECONOMIC FORECASTING

Trump’s tariffs could spark fresh sell-off, says RBA

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Original article by Michael Read
The Australian Financial Review – Page: 4 : 4-Jun-25

Sharemarkets have recovered most of the losses incurred in response to the Trump administration’s reciprocal tariffs announcement in early April. However, the Reserve Bank of Australia’s chief economist Sarah Hunter says ongoing uncertainty regarding the US tariffs regime could result in renewed financial market volatility. Speaking ahead of the release of GDP data for the March quarter, Hunter warned that further changes to US tariffs or the economic outlook could prompt another equities sell-off; this in turn could adversely affect consumer spending and deter businesses from hiring staff or proceeding with capital investment plans.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

IMF warns of stalling progress to reduce inflation

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Original article by Patrick Commins
The Australian – Page: 2 : 17-Apr-24

The International Monetary Fund now expects global economic growth of 3.2 per cent in both 2024 and 2025. However, the IMF notes that the outlook remains uncertain due to factors such as China’s embattled property sector and the risk that wars in Europe and the Middle East will escalate. The IMF’s latest World Economic Outlook report also notes that the global economy is still "remarkably resilient", and it is optimistic that central banks will be able to achieve a soft landing for economies. The IMF has forecast economic growth of 1.5 per cent for Australia in 2024, and two per cent next year.

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INTERNATIONAL MONETARY FUND

Global outlook to help give economy a lift

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Original article by Patrick Commins
The Australian – Page: 6 : 26-Jul-23

The International Monetary Fund has upgraded its global economic growth forecast for 2023 from 2.8 per cent to three per cent. The IMF notes that the economic growth forecast "remains weak by historical standards", and compares with global real GDP growth of 3.5 per cent in 2022. The updated World Economic Outlook report does not include any forecasts for the Australian economy; however, Treasurer Jim Chalmers says factors such as global pressures and rising interest rates will see growth in the domestic economy slow considerably.

CORPORATES
INTERNATIONAL MONETARY FUND, AUSTRALIA. DEPT OF THE TREASURY

China’s drop in births a global threat

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Original article by Michael Smith, Ronald Mizen
The Australian Financial Review – Page: 1 & 11 : 18-Jan-23

University of Wisconsin-Madison demographer Yi Fuxian says China’s declining birth rate will have long-term implications for the global economy. The Chinese government has advised that the nation’s population fell by 850,000 in calendar 2022, to 1.412 billion. The number of deaths exceeded births for the first time in six decades, with factors such as the rising cost of living and COVID-19 restrictions deterring many couples from having more than one child. The demographic shift in China will have a limited impact on the nation’s economy in the short-term; however, demographers warn that China is likely to face labour shortages in 20-30 years’ time, which will affect the global supply of manufactured goods.

CORPORATES
UNIVERSITY OF WISCONSIN-MADISON

Second wave would be $25bn tsunami

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Original article by Patrick Commins
The Australian – Page: 4 : 11-Jun-20

The OECD’s latest economic outlook report forecasts that the Australian economy will contract by five per cent in 2020, compared with an average decline of 7.5 per cent among member nations. The OECD also expects the domestic economy to rebound by 4.1 per cent in 2021, in the absence of a second wave of the coronavirus. A fresh outbreak would reduce GDP growth in 2021 to just one per cent, according to the OECD. The Paris-based organisation expects the global economy to contract by 6% in 2020, and 7.6% if there is a second wave.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Rio boss warns of volatility, nationalism

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Original article by Nick Evans
The Australian – Page: 13 & 16 : 14-May-20

Rio Tinto CEO Jean-Sebastien Jacques has warned that global commodity markets will continue to experience volatility in the wake of the coronavirus pandemic, while global GDP growth will be hit. Jacques says is too soon to know whether there will be a V-shaped economic recovery. He also says the movement of people and goods will be restricted in the wake of the pandemic, while there could be a fundamental shift in global wealth distribution. Jacques noted that Rio Tinto’s mining operations will be affected by an increase in geopolitical tensions in the post-pandemic environment.

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RIO TINTO LIMITED – ASX RIO

V-shaped recovery unlikely: BHP

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Original article by Nick Evans
The Australian – Page: 13 : 13-May-20

BHP CEO Mike Henry expects global demand for copper and steel to fall sharply in the wake of the coronavirus pandemic, while he warns that demand for oil may not return to pre-virus levels for at least 18 months. Henry has told a Bank of America conference that a V-shaped economic recovery is now unlikely, except in China, and he has signalled that BHP will further reduce exploration capital expenditure when its 2019-20 full-year results are released.

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BHP GROUP LIMITED – ASX BHP

Hopes of V-shaped recovery likely to be dashed

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Original article by David Rogers
The Australian – Page: 20 : 24-Apr-20

The global sharemarket has recovered about 50 per cent of the losses incurred in the sell-off during February and March. However, a further V-shaped recovery for equities is likely to be dependent on the global economy being restarted quickly. A V-shaped economic recovery is also unlikely, according to economists. Josh Williamson of Citigroup expects Australia’s economic growth to fall by 5.8 per cent in 2019-20, before rebounding by 6.1 per cent in 2020-21. However, he does not expect the economy to return to pre-virus growth levels until late 2021.

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CITIGROUP PTY LTD

Blow to trade far larger than Trump

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Original article by Tony Boyd
The Australian Financial Review – Page: 1 & 16 : 26-Feb-20

BlackRock CEO Larry Fink says the coronavirus outbreak has highlighted the dangers of being too dependent on China for imported goods, and companies will need to diversify their supply chains. He also expects the coronavirus to have a greater impact on international trade than the tariff war that was initiated by President Donald Trump. Fink adds that rather than relying on the monetary policy measures of central banks, governments will need to pursue fiscal stimulus if the coronavirus affects global economic growth.

CORPORATES
BLACKROCK INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Coronavirus could cost global economy $1.1tn in lost income

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Original article by Phillip Inman
The Guardian – Page: Online : 20-Feb-20

The death toll from the coronavirus in mainland China has risen to 2,004, and more than 74,000 people across the nation have been infected with the respiratory illness. Meanwhile, two people have died in Iran after testing positive for the coronavirus, while Hong Kong has reported its second death from the illness. Oxford Economics has estimated that the coronavirus would reduce global economic growth by 1.3 per cent in 2020 if it becomes a pandemic; this could reduce global output by more than $1trn. However, the firm expects the impact of the virus to largely be limited to China.

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OXFORD ECONOMICS LIMITED