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Edition July 10, 2018 - Crédit Agricole S.A.
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  • Edition July 10, 2018

    World – Macroeconomic Scenario for 2018-2019: The end is not yet nigh

    Despite tightening financial conditions in the US and a possible worsening of trade tensions, a cyclical downturn is not imminent. The heady days of simultaneous expansion are, however, now well and truly over. Growth is still running high in the US and remains vigorous in the Eurozone after a temporary loss of impetus, though it looks set to recede in the emerging economies – the first region to suffer from the killer combination of a rising dollar, rising US interest rates, and growing fears of protectionism.

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  • The American threats

    Despite a tightening of US monetary policy and threats of mounting protectionism, American growth is strong and the Eurozone is bearing up well. Until 2020, that is…

  • Content:

    - Developed countries – Still showing resilience
    - Emerging countries – Slightly slower growth, deepening risks
    - Oil – Saudi Arabia keeps market in balance
    - Monetary policy – Restraint from some central banks
    - Interest rates – Creeping up
    - Exchange rates – An appetite for the dollar
    - Economic and financial forecasts

  • Extract:

    In the Eurozone, the economic slowdown in Q118 has raised a number of questions, often met by overly pessimistic, even alarmist, responses. However, the shock, which can be put down to relatively sluggish exports, does not signal an early end to the growth cycle. There are no crippling constraints on supply, particularly when it comes to the workforce: labour tensions will not derail growth. Growth is subsiding and is coming under threat from external factors, with the tightening of US monetary policy less worrying than the risk of a trade war escalation. In light of the likely retaliation by the US's trading partners (though they would have to be moderate, given the losses such retaliation would entail for the countries concerned), it would be overambitious to put a figure on the potential cost of a war that has yet to take shape fully. A trade war would obviously hamper growth. However, even now, before any escalation has occurred, the potential damage to confidence and the ensuing adverse effect on investment decisions is a real cause for concern, in our view.

  • Associative topics : Africa and Middle East | Asia and Oceania | CEE and Central Asia | Economics | Europe | Industry and Services | Latin America | North America

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