Credit Agricole Economic Research

France : Cr�dit Agricole leading indicators

Economic Research - Credit Agricole — Mon, 14 May 2012 0:00:00 +0200

The Cr�dit Agricole leading indicator suggests that GDP is stable in Q1 and Q2 2012. We have increased our Q1 growth forecast to 0% q/q, compared with the earlier -0.1%.

Eurozone: Cr�dit Agricole leading indicators

Economic Research - Credit Agricole — Sat, 12 May 2012 0:00:00 +0200

The fall-off in activity looks like being less marked than expected in Spain, limited to 0.3%. In Germany, activity may have fallen slightly, by 0.1% q/q, and seems to have stabilised in France in the first quarter. It is in Italy that the recession seems to have been most sudden, with GDP down 0.7%.

Emerging economies in 2020: a New World?

Economic Research - Credit Agricole — Fri, 11 May 2012 0:00:00 +0200

By 2020, the emerging economies will account for around 50% of the world economy. By then, two-thirds of global GDP growth will be generated in those countries. At that point, the world will be a different place: China's GDP will be greater than that of the EU and will be biting at the heels of the US. However, apart from a few exceptions, per capita incomes in emerging countries will still be significantly lower than those of the "developed" countries.

Latin America in 2012

Economic Research - Credit Agricole — Fri, 4 May 2012 0:00:00 +0200

Average growth in Latin America will slow slightly in 2012, coming to 3.6% in volume terms, following 4.2% in 2011 and 6.0% in 2010. The modest rebound expected in Brazil will not fully offset slowdowns expected in other countries, ranging from moderate (in Mexico, Colombia and Chile) to sharper (in Argentina).The risk of deindustrialization is a considerable concern to South America's political and industrial leaders.

ECB laying the ground for potential action

Economic Research - Credit Agricole — Thu, 3 May 2012 0:00:00 +0200

The ECB left its main policy rates unchanged today. The Governing Council did not discuss a change in rates as the monetary stance was deemed appropriate despite rising uncertainty. Those hoping for an explicit hint at an imminent easing may have been disappointed as a result. However, the removal of the reference to �upside risks� to inflation from the official statement is consistent with a clear shift towards a more flexible stance, in our view. In the past, this has been a traditional way for the ECB to signal a potential move on rates.

France: strengths to emphasise

Economic Research - Credit Agricole — Wed, 2 May 2012 0:00:00 +0200

There has been much talk recently about the structural weaknesses in the French economy. But while correcting these points can only help to strengthen the country's competitiveness and boost its growth potential, France can also seek to rely on its strengths and leverage these many assets.

France, 2012 Elections: Programmes fall short of challenges

Economic Research - Credit Agricole — Tue, 10 Apr 2012 0:00:00 +0200

The electoral programmes of the two main candidates in the French presidential election were presented in January in the case of F. Hollande, and more recently for N. Sarkozy. They should in theory tackle the French economy's structural weaknesses, and in the first instance the structural weakness of SMEs and the low level of competitiveness of French products. Their programmes offer only partial solutions. However, in both cases, the budgets are balanced in theory but raise questions, especially as regards spending targets.

ECB exit still a very distant prospect

Economic Research - Credit Agricole — Thu, 5 Apr 2012 0:00:00 +0200

Today�s ECB decision to leave rates unchanged was a non-event. However, its communication continues to show a gradual shift towards a greater emphasis on inflation risks, including potential second-round effects on wages, even though there is no such risk emerging at the Eurozone level, for now. At the same time, ECB�s President M. Draghi made it clear that he would oppose any quick exit from non-conventional liquidity measure which he said was "premature".

Markets still looking for meaning

Economic Research - Credit Agricole — Thu, 29 Mar 2012 0:00:00 +0200

Growth came to a sudden halt in late 2011 as unemployment surged. Economic conditions have deteriorated sharply in the Eurozone and our forecast now has to factor out the one item that could have injected a little breath of fresh air � namely the slowdown in inflation. Fiscal orthodoxy will remain the rule but a few concessions could be granted to soften the adjustment regime in order to dig ourselves out of a recession that is likely to affect all or almost all member states.

It looks as if 2012 will be a turning point in defining the right balance between fiscal orthodoxy to purge past excesses and reassure investors about the survival of the single currency on the one hand, and on the other a certain pragmatism to avoid choking both growth and public finances. In our projections, that room for manoeuvre is likely to be restricted to acceptance of a slight deviation from fiscal targets, without undermining austerity dogma. In this fragile balance the financing conditions for countries still present in the capital markets should continue unchanged, making life easier for governments and underpinning the step-by-small-step strategy of creating a unified Europe.

Monetary policy: new frontiers, new challenges

Economic Research - Credit Agricole — Tue, 27 Mar 2012 0:00:00 +0200

With the crisis, central banks found themselves in the front line when it came to cushioning financial shocks and underpinning the fragile process of recovery. They used every weapon in their arsenal, beginning with the conventional by flooring interest rates, and then moving on to the non-conventional by opting for active management of the size and structure of their balance sheets. While these measures were dictated by the need for an emergency response to a crisis of historic proportions, the fact of putting the financial system on life support in this way raises doubts about possible addiction to such support, with inevitable questions about the side-effects of such ultra-accommodative policies.