RaboResearch - Economic Research

Special

United States infrastructure: Impact on economy and elections

Although the bipartisan infrastructure package is long overdue given the state of the infrastructure of the United States, it will hit the economy at a time of full employment and after a couple of years of high inflation. This means that the bang for the buck will be substantially eroded.

Special

German elections: Green means 'Go'

The Social Democrats are in pole position to lead Germany’s next coalition government, but protracted negotiations seem likely. A best guess is that Scholz will eventually lead a ‘Traffic light’ coalition of the SPD, the Greens and the FDP. There are, however, considerable divides to bridge and it could potentially take months before the successor to Merkel is finally decided.

Economic Report

Delta variant forces Australia into new lockdowns

Australia is facing new lockdowns due to the spread of the Delta variant. Nonetheless, we expect the economic impact to be less severe than last year. Inflation reached a high point of 3.8%. However, the central sees this as temporary and the RBA doesn’t expect to hike rates before 2024.

Economic Report

Australia: Policymakers shifting gears

The recent Australian federal budget represents a shift in budget strategy away from budget prudence towards higher spending. The combination of loose fiscal and monetary stimulus increases inflation expectations. However, the RBA doesn’t expect a rate hike before 2024 due to spare capacity in the economy.

Economic Report

EU Recovery fund officially ready for take-off

The European Commission has received an official go to start borrowing money to finance the EU recovery fund. Funds can start to flow to Member States this Summer. We estimate that these funds will lift Eurozone GDP by 0.5% over this and next year.

Special

Inflation: Ambient or transient?

Markets have been in the grips of ‘reflation’. Unless wage inflation picks up or governments stimulate beyond covid-19, the current upward forces on inflation will prove transient. Therefore, the ECB is expected to look through this rise in inflation.

Economic Update

France: Lockdowns determine economic recovery

Different from other European nations, France has not reinstated a lockdown in the first quarter. Consequently, we do not expect the French economy to contract in the first quarter. For 2021 we expect the French economy to grow by 5.8 percent.

Special

United States: President Biden

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

Implications of the EU China investment deal (CAI)

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.