4/4/19: BRIC PMIs for March Show Improved Growth Conditions

With March PMIs reported by Markit in, here are the monthly frequency trends for the BRIC economies activity, based on composite PMIs:

Overall BRIC activity as signalled by PMIs remains range-bound in the tight, low activity range over the last 6 years (second chart above). However, the composite activity is running close to the upper bound of the range, implying overall stronger performance in the recent month. This is confirmed by the first chart above, showing that both Russia and ex-Russia BRIC economies activity is accelerating on trend since July 2018.

More analysis, based on smoother quarterly data forthcoming, so stay tuned.

19/10/18: IMF's Woeful Record in Forecasting: Denying Secular Stagnation Hypothesis

A recent MarketWatch post by Ashoka Mody, @AshokaMody, detailing the absurdities of the IMF growth forecasts is a great read (see https://www.marketwatch.com/story/the-imf-is-still-too-optimistic-about-global-growth-and-thats-bad-news-for-investors-2018-10-15?mod=mw_share_twitter).  Mody's explanation for the IMF forecasters' failures is also spot on, linking these errors to the Fund's staunch desire not to see the declining productivity growth rates (aka, supply side secular stagnation).

So, to add to Mody's analysis, here are two charts showing the IMF's persistent forecasting errors over the last four years (first chart), set against the trend and the cumulative over-estimate of global economic activity by the Fund since mid-2008 (second chart):

While the first chart simply plots IMF forecasting errors, the second chart paints the picture fully consistent with Mody's analysis: the IMF forecasts have missed global economic activity by a whooping cumulative USD10 trillion or full 1/8th of the size of the global economy, between 2008 and 2018. These errors did not occur because of the Global Financial Crisis and the high degree of uncertainty associated with it. Firstly, the forecasting errors relating to the GFC have occurred during the period when the crisis extent was becoming more visible. Secondly, post GFC, the hit rates of IMF forecasts have deteriorated even more than during the GFC. As Mody correctly points out, Fund's forecasts got progressively more and more detached from reality.

At this stage, looking at April and October 2018 forecasts from the Fund's WEO updates implies virtually zero credibility in the core IMF's thesis of a 'soft landing' for the global economy over 2019-2021 time horizon.

8/5/2013: Blackrock Institute Survey: N. America and W. Europe, May 2013

Just as I published April update from Blackrock Investment Institute Economic Cycle surveys, here comes May one for North America and Western Europe:

 Now, note change in Ireland's position compared to April:

May summary:

And conclusions (italics are mine):
"This month’s North America and Western Europe Economic Cycle Survey presented a large shift on the outlook for global growth over the next 12 months – although a net proportion of respondents remains positive, this is now a figure of 41%, compared with a net 71% last month. [In other words, things are turning gloomier for global growth outlook]

With regards to the US, the proportion of respondents expecting recession over the next 6 months remains low, with the consensus view firmly that North America as whole is in mid-cycle expansion. [In other words, current growth rates are not expected to rise much as would have been consistent with early-cycle expansion]

In Europe, the view continues to be more disparate, with a generally stronger northern Europe contrasted by continuing weakness in Eurozone as a whole. Belgium, France, Greece, Italy, the Netherlands, Portugal and Spain in particular are described in a recessionary state, with the consensus view remaining in this phase at the 6 month horizon in each case."

7/5/2013: Blackrock Institute: April 2013 Global Economic Conditions - 1

A number of updates from the Blackrock Investment Institute Economic Cycle surveys for April 2013. Here are core charts.

Note of caution: some of the countries coverage in responses is thin, so data should be treated as only indicative. And the surveys are based on opinion of external experts, not Blackrock internal views.

Global outlook: 

"...a positive outlook on global growth, with a net 71% of 127 economists expecting the global economy will get stronger over the next year, (2% higher from the March report), based on North America and Western Europe panel."

For the EMEA panel, "Respondents remain positive on the global growth cycle, with a net 57% of 64 respondents expecting a strengthening world economy over the next 12 months – however this is large downward shift from the net 74% figure last month."

Asia Pacific panel: "The global growth outlook remains positive, with a net of 71% of participants expecting a stronger global economy over the next 12 months; however this is a large step down from the net 84% figure in last month’s report."

Latin American panel: "The global growth outlook remains positive, with a net 47% of 49 participants expecting a stronger global economy over the next 12 months; however this is a large step down from the net 62% in last month’s report."

North America and Western Europe:

"With regards to the US, the proportion of respondents expecting recession over the next 6 months remains low, with the consensus view firmly that North America as whole is in mid-cycle expansion. 

In Europe, the view continues to be more disparate, with the UK and Eurozone as a whole described in a recessionary state. With caveat that the depth of country coverage varies significantly, the consensus view remains recessionary at the 6 month horizon for France, Greece, Italy, the Netherlands, Portugal, Spain and Belgium."

Note: Ireland results are based on very 'thin' data. 

More regions to follow in the next post.