Infographic Dutch version
Infographic accompanying the Outlook 2018.
We have developed a two-equation model to forecast India’s interest rate and inflation. Going forward, we expect that both variables will follow an upward trajectory. In our lower bound forecasts, we are even more hawkish than the repo forecasts from a Bloomberg survey among 46 economists.
A two-equation forecasting model shows that we expect interest and inflation rates to increase in India. It might be worthwhile for the Reserve Bank of India to examine whether it is useful to communicate medium-term forecasts on these variables.
Simulations with a macro-econometric model show that a reduction in the US corporate tax rate will boost GDP growth in the short run, but the debt ratio in the long run. The cut will also lead to higher long-term interest rates and a stronger US dollar.
The breaking down of ‘Jamaica’-coalition talks last night brings unprecedented political uncertainty to Germany. Political initiative and control is moving away from Merkel towards the President, Frank-Walter Steinmeier, who can ultimately trigger new elections.