GLOBAL ECONOMICS WEEKLY：Global growth momentum should override debt crisis
ECONOMICS RESEARCH 7 May 2010 PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 43 Global Forecasts 2Global Synthesis 3Global Rates and Inflation 5Global Markets Watch 6United States Outlook 7InFocus: Corporate healing 9Data Review & Preview 11Euro Area Outlook 13Data Review & Preview 15United Kingdom Outlook 16Data Review & Preview 18Japan Outlook 19Data Review & Preview 21Emerging Asia China Outlook 22Asia (ex-China) Outlook 24Data Review & Preview 26EMEA Outlook 27Data Review & Preview 29Latin America Outlook 31Data Review & Preview 33Country Snapshots 35Global Weekly Calendar 41 GLOBAL ECONOMICS WEEKLY Global growth momentum should override debt crisis The viciousness of recent market dynamics is certainly a risk to our outlook for a strong global recovery, but we do not think it will derail it. Current indicators suggest very positive economic momentum almost everywhere, including the four largest economies in the euro area. We believe that if growth in the euro area were to make a turn for the worse, the impact on global growth would be small and mostly limited to delaying the policy tightening expected later in the year. Only a full-blown panic attack would cause a global double dip, in our view. But since policymakers are likely to fight it vigorously, we do not expect this to happen. Developed Economies US: Strong data, but markets are focused elsewhere 7 The incoming economic data point to strong growth in Q2 10, as employment growth picked up in April and the ISM manufacturing index hit another 5-year high. Euro area: Euro diverging trajectories 13 The main data this week were German IP, which confirmed that the German recovery should be boosted further by ongoing euro depreciation. UK: Inflation gnaws at policy credibility 16 Pipeline inflationary pressures are building, while consumer price inflation is already high, leaving the MPC with an uncomfortable dilemma. Japan: Still producing, starting to hire 19 The prospects of a double dip in industrial production appear increasingly remote as exports continue to grow and capex starts to pick up. Emerging Markets China: Well positioned to weather downside risks to external demand 22 We expect China’s strong cyclical position to help it weather the downside risks to external demand, emanating from the sovereign debt crisis in southern Europe. Emerging Asia (ex-China): Looking more sustainable 24 Activity indicators in EM Asia have started Q2 on a strong note, with Korean exports and China’s PMI rising sequentially in April. EMEA: EMEA export-led recovery maturing 27 Growth in EMEA has so far been mostly led by exports. Domestic demand has been weak due to ongoing recession factors, and this puts a cap on growth. Latin America: Supply that destroys its own demand 31 At a time of heightened market volatility, dislocations and general risk aversion, Venezuela seems to be preparing to bring new bonds to market. Barclays Capital | Global Economics Weekly 7 May 2010 2 GLOBAL FORECASTS 3Q094Q091Q102Q103Q104Q101Q112009201020114Q092Q104Q102Q11Global4.64.95.14.54.04.14.1-0.84.64.31.62.62.82.5Developed1.33.22.63.12.62.82.3-3.42.52.70.71.51.61.5Emerging8.76.98.26.35.85.76.32.47.16.33.65.35.85.1BRIC10.97.610.47.87.26.77.65.08.57.62.24.34.84.2America3.05.83.74.13.63.62.8-2.43.93.32.43.13.02.9United States2.25.63.24.03.53.52.5-2.43.53.21.42.11.61.7Canada0.95.05.5↑4.03.5↓3.53.0↓-2.63.63.1↓0.81.5↑2.5↑2.2↑Latin America5.66.54.84.34.13.93.5-2.35.03.96.57.88.97.7Argentina-2.8-0.23.24.44.64.53.6-2.24.22.714.820.726.623.8Brazil7.08.47.13.84.03.64.0-0.26.04.54.34.95.34.6Chile6.65.91.56.010.06.05.0-1.55.25.7-1.90.93.43.4Colombia1.74.74.04.05.55.54.50.44.14.82.42.62.82.7Mexico10.48.44.05.33.03.53.5-6.55.53.34.04.65.13.6Peru10.011.510.36.14.95.75.51.16.35.90.21.62.73.0Venezuela-8.1-3.1-3.80.82.01.9-3.6-3.3-1.71.025.127.028.625.2Asia/Pacific8.35.98.66.25.75.86.73.67.46.50.52.12.72.5Japan-0.63.85.22.92.12.72.3-5.23.32.1-1.7-1.4-0.6-0.2Australia0.81.94.72.53.24.04.21.33.33.72.03.13.33.5Emerging Asia10.86.69.67.26.76.67.95.88.67.71.64.04.43.8China9.89.610.88.48.08.09.28.710.19.00.73.14.53.9Hong Kong1.69.21.81.82.72.74.8-2.74.34.01.31.72.22.6India16.2-2.212.09.08.07.08.06.48.48.45.09.26.15.2Indonesia6.26.57.46.66.15.37.44.56.56.22.64.55.86.5Korea13.40.77.55.03.62.35.50.25.74.02.42.42.41.0Malaysia9.87.39.36.13.24.15.1-1.77.55.0-0.22.12.52.4Philippines1.84.45.74.12.44.97.40.94.35.33.05.76.35.4Singapore11.5-2.833.3↑-5.6↓1.9↓1.3↓5.8↓-2.08.5↑4.0-0.83.53.81.6Tai
