Economic Comment
The Eurozone economy contracted with 0.7% in the final quarter of last year and with 6.8% in 2020 as a whole. Going forward, the apparent resilience of the economy bodes some comfort, but will not prevent another contraction in the current quarter.
Economic Comment
The German economy expanded by 0.1% in the fourth quarter. Going forward, there are still some major risks however. Transport prices for goods from China have quadrupled recently and pose a threat to the strong trade performance in Germany.
Economic Report
Spain is in the midst of a heavy third coronavirus wave. The government hopes it can avert a full lockdown, but the economy will suffer anyhow. We think the economy contracted in 20Q4 and pencil in another contraction for the current quarter.
Special
The Italian government survived the confidence votes in parliament, but its mandate has weakened. Policymaking will be somewhat more difficult, while the third COVID wave pushes the economy back into recession.
Special
While we expect Biden’s policies to boost economic growth, we do not expect them to end the vicious cycle of polarization and social unrest that is undermining the country. In foreign and trade policy, Biden is likely to return to a multilateral approach.
Special
The EU-China Comprehensive Agreement on Investment (CAI) should improve EU companies’ access to China and ‘level’ the playing field. However, its commitments are ‘weak’ and the envisaged dispute resolution mechanism lacks teeth.
Economic Update
A new strain of coronavirus has been found in Japan while a third wave of cases sweeps over the country. That will cause the economy to contract in the first quarter of this year. In that sense, the situation will get worse before it gets better.
Economic Report
We expect Indian GDP to contract by -8.4% (y/y) in fiscal 20/21 and grow by 9.7% (y/y) in fiscal 21/22. The INR is projected to appreciate in tandem with the expected global economic recovery and boosted by optimistic global investor sentiment.
Economic Report
On January 6, Trump supporters stormed Congress. The ever increasing polarization of US politics and society has reached a level that poses a serious threat to the stability of the country. If the US does not find an off-ramp from this route, we are only going to see a further escalation of civil unrest.
Special
The EU-UK trade agreement marks the start of a complex relationship in which the UK and the EU will have to learn to live together separately. This won’t be without frictions.
Economic Report
If the Democrats win both run-off elections in Georgia this would open the door to a large fiscal stimulus package and more expansive fiscal policy in the coming years. This would reduce the pressure on the Fed to provide more monetary stimulus through asset purchases.
Economic Report
On November 15th, the Regional Comprehensive Economic Partnership (RCEP) was signed, but India decided to opt out. Many consider this a policy mistake, but we argue that India’s choice is actually quite rational.
Special
Democrats and Republicans have finally passed a bill on a new Covid-19 relief package which was signed into law by President Trump on Sunday. The size of the fiscal package is estimated at almost $900 billion, although about half of that is money recycled from the CARES Act.
Economic Update
The emerging markets heatmap provides a comprehensive overview of the relative vulnerability of eighteen emerging markets. Results show that Asian countries are in relatively good shape, while Latin American countries are most vulnerable.
Economic Report Dutch version
There is pressure to address the problem of plastic packaging waste. Advanced recycling is mentioned as a promising solution and can complement existing recycling methods, accelerating the transition to a circular economy.
