GLOBAL ECONOMICS WEEKLY：Growth rotation
ECONOMICS RESEARCH 4 June 2010 PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 49 Global Forecasts 2Global Synthesis 3Global Rates and Inflation 5Global Markets Watch 6United States Outlook 7InFocus: Shelter costs approaching a trough 9Data Review & Preview 11Euro Area Outlook 13InFocus: Germany and the euro – mind the gap 15Data Review & Preview 18United Kingdom Outlook 20Data Review & Preview 22Japan Outlook 23Data Review & Preview 26Emerging Asia China Outlook 27Asia (ex-China) Outlook 29Data Review & Preview 31EMEA Outlook 33Data Review & Preview 35Latin America Outlook 37Data Review & Preview 39Country Snapshots 41Global Weekly Calendar 47 GLOBAL ECONOMICS WEEKLY Growth rotation This week’s economic data appear to confirm our view that global economic momentum remains positive and is unlikely to be derailed in the near term. We are revising upwards our expectations of US growth for the next quarters, while postponing the beginning of the Fed tightening cycle until April 2011. Debt concerns in peripheral Europe and the associated market volatility have postponed monetary tightening globally, but we do not believe central banks are behind the curve. We think the market underestimates the amount of monetary tightening already taking place in China and expect the landing there to be soft. Developed Economies US: Faster growth, slower Fed 7 We have raised our forecast for real GDP growth, but now expect the Fed to remain on hold until Q2 11. Euro area: Nervous expansion 13 Mixed economic readings from the euro area – PMIs have been generally positive still, but retail and auto sales have disappointed in Q2. UK: Recovery continues despite weak credit flows 20 This week’s PMIs again pointed to an ongoing expansion in demand and further signs of incipient inflationary pressures. Japan: Birth of Kan Administration: Key policy of new government 23 Naoto Kan was today approved as Japan’s new prime minister. We consider some of the key economic issues that his administration will face. Emerging Markets China: Policy tightening bias remains 27 We expect next week’s data release to show continued strength in activity, but a moderation in the growth rate and a rise in CPI inflation to 3% from 2.8% in April. Emerging Asia (ex-China): Wait and see 29 Policymakers remain on the sidelines, even as further strong Q1 growth prints emerge. EMEA: Varied growth paths 33 EMEA growth paths have varied widely. On average, the recession was steep and the recovery has been relatively mild. Latin America: Expect the unexpected in LatAm politics 37 Colombia’s surprisingly easy victory for incumbent candidate Santos cast a shadow of doubt over the reliability of polls. Nevertheless, economic policy was never at risk. Barclays Capital | Global Economics Weekly 4 June 2010 2 GLOBAL FORECASTS 3Q094Q091Q102Q103Q104Q101Q112009201020114Q092Q104Q102Q11Global5.15.15.34.64.14.14.3-0.84.74.41.62.62.72.5Developed1.53.42.53.42.82.82.5-3.42.62.80.71.41.41.4Emerging9.67.18.66.25.75.86.42.47.26.33.65.35.85.1BRIC12.47.910.57.97.16.87.85.08.67.62.24.44.84.2America2.95.73.44.74.03.63.1-2.43.93.6↑2.42.92.62.7United States2.25.63.04.5↑4.0↑3.53.0↑-2.43.6↑3.5↑1.41.81.01.5Canada0.94.96.1↑4.03.53.53.0-2.53.8↑3.10.81.52.52.2Latin America5.56.44.05.54.23.93.5-2.35.04.06.57.99.07.7Argentina-2.8-0.23.24.44.64.53.6-2.24.22.714.820.726.623.8Brazil7.08.410.03.42.83.64.0-0.26.54.54.35.15.44.6Chile5.26.2-5.97.017.06.35.0-1.54.06.6-1.91.23.63.3Colombia1.74.74.04.05.55.54.50.44.14.82.42.62.82.7Mexico10.17.9-1.410.04.03.53.5-6.55.03.54.04.65.13.6Peru10.011.510.36.14.95.75.51.16.35.90.21.62.73.0Venezuela-8.1-3.1-3.80.82.01.9-3.6-3.3-1.71.025.127.028.625.2Asia/Pacific9.66.39.16.05.75.96.93.67.56.50.52.22.62.5Japan0.54.24.0↓3.6↑2.42.82.4-5.23.42.2-1.7-1.3-0.7-0.2Australia0.81.94.72.53.24.04.21.33.33.72.03.13.33.5Emerging Asia12.27.010.56.76.66.78.25.88.67.71.64.04.43.8China12.510.110.48.78.18.19.58.710.19.00.73.14.53.9Hong Kong1.29.69.6↑-1.0↓0.8↓0.8↓6.0↑-2.85.1↑4.01.31.72.22.6India16.2-2.212.09.08.07.08.06.48.48.45.09.25.95.1Indonesia6.26.55.47.87.47.06.14.56.46.32.64.55.86.5Korea13.40.77.55.03.62.35.50.25.74.02.42.42.41.0Malaysia9.713.36.94.72.84.15.5-1.77.55.0-0.21.82.52.4Philippines1.65.712.63.62.44.17.41.16.05.33.05.76.35.4Singapore11.1-1.038.6-10.00.83.210.4-1.38.54.0-0.83.53.81.6Taiwan11.216.711.30.20.71.35.9-1.97.54.0-1.31.91.71.7Thailand5.717.016.0-13.3-5.98.28.1-2.35.04.51.93.23.52.5Europe and Africa1.92.72.62.82.32.52.3-4.51.92.61.62.52.92.4Euro
