United States: Tax cuts lift short-term growth outlook

I have raised the outlook for 2018 by 0.3 percentage points to 3.0% after the tax reform was finalized. The adjustment is mainly a reflection of increased consumption growth, while the net export contribution is turning negative and the trade deficit is set to increase further.   I expect increased labor participation and strong growth in productivity to…

France 2018 outlook: cautiously optimistic

By Guest contributor Anna Råman, Independent Economist, annaraman@hotmail.com   The French growth prospects for 2018 are solid and we expect GDP growth of 1.9%, up from 1.8% in 2017.  Exports have gained pace this year and investments are favoured by solid external and domestic demand, easy financing conditions, optimism ahead of major corporate tax cuts…

Germany 2018 outlook: full steam ahead

I expect German GDP to increase by 2.7% in 2018 – up from 2.5% this year. Conditions remain favorable in 2019. The economic fundamentals are solid with record-low unemployment and strong income gains, while the corporate sector is well positioned to tap into a global investment cycle. The strong domestic growth makes Germany less vulnerable…

United States: The Unfolding Opioid Crisis

The annual number of deaths from opioid abuse is now on a par with total American casualties in the Vietnam War. The epicenter of the crisis is abuse of prescription drugs, but that has now led to a spike in heroin and fentanyl abuse. Drugs and drug-related crimes have expanded beyond the inner cities, hitting…

United States: The Anatomy of a Recovery

The US recovery since 2009 has underperformed previous recoveries with the decline in real public spending accounting for half of the underperformance. The other important factor is the deleveraging in household. For the corporate sector the recovery has been pretty average – on average. Inflated debt levels remain a headwind for the US economy.  …

2018 Oil Price Outlook

Temporary factors on the supply and demand side have pushed up oil prices in recent months. As growth in demand has likely peaked, focus returns to the supply side. While I expect OPEC to extend the production cut, non-OPEC countries are expected to increase production substantially in 2018 – led by US shale. Hence, Brent…

United Kingdom 2018 Outlook: Not Great

The British economy has beaten most economic projections in the period following the Brexit vote in June 2016. However, real wages are now declining and the Bank of England has tightened financial conditions. The Brexit negotiations are a mess, which is impacting investment decisions. All this means that economic growth is fading. I expect GDP…

United States: Tax less, spend more!

• Republicans are working on tax reform and spending priorities… • … but have abandoned usual fiscal prudence in the process • Deficits are going to increase in coming years • Interest outlays will soon begin to crowd out other priorities • No acute fiscal crisis, but a long-term mess   Report: 171017 United States…

United States 2018 Outlook: As good as it gets

The US economy has entered a positive phase of the moderate growth cycle. A global upswing is supporting exports, and private investment has already picked up. Deregulation efforts are gaining steam and should support growth in 2018 – more so than modest tax cuts.   Households have been the main driver of growth in recent…

Euro area: ECB’s growing dilemma

The ECB is increasingly a victim of its own success. With the economic recovery strengthening, the overall monetary strategy – a downbeat narrative supporting quantitative easing (QE) and negative interest rates – is under pressure. More rate hikes from Federal Reserve will allow ECB to take baby steps towards normalization over the coming year without a…