Developed, Real GDP YOY%
Developed, Real GDP YOY%
Hong Kong2.
New Zealand3.
United Kingdom1.
United States1.
[Neutral] Teg: Australia

All I know good news for export sector that is they are investing in new LNG (liquefied natural gas) capacity to carry it to China.

[Neutral] Teg: Germany

The main feature of German economy, as I think, is very high level of current accounts surplus (around 7-9% of GDP, this is one of the highest level within developed peers) This is one of the keys potential driver for economic growth. High surplus demonstrates that Germans and companies of the country still prefer to save rather than invest. The government should offer Germans some incentives to invest. Why not to increase a little bit of inflation (e.g. steady increase in wages, more government spending, etc.). I am sure this is like low-hanging fruits.

[Negative] Teg: Switzerland

The economy of Switzerland is standing still. I can not find any measurable drivers for upturn more that 1% GDP growth pre annum. Moreover, uncertainty over possible changes in income tax for firms provides some risk. Analysts estimates as 50-50 that the government would increase corporate taxes to cover as more as possible the debt level

[Neutral] Teg: Canada

I expect that Canada will be able to continue its stable growth: IMF's forecast for GDP growth in 2018 is ~2.1%, unemployment rate is at the lowest level since 70s (5.8%). However, despite all these obvious signs of recovery, one should note some concerns: 1) NAFTA renegotiation. USA is very important market for Canada (2/3 of export) and, thus, NAFTA is very important agreement for Canada (that makes Canadian products competitive on US market). However, now the future of NAFTA is questionable. Moreover, taking into account Trump's protectionist policy, I consider the case for USA to withdraw from a treaty as rather probable. 2) Household debt. According to OECD, households in Canada have the highest debt-to-income ratio (> 100%) in the developed world. Coupled with the lowest unemployment rate, I consider these as a fundamental internal constraints for Canada's long-term growth. 3) US tax reform. On the one hand, this reform is likely to support US GDP growth and, consequently, Canada's GDP growth (as Canadian economy is heavily reliant on US economy). However, on the other hand, lower corporate tax was one of the Canada's competitive advantages (comparing with USA), and, consequently, this reform is likely to decrease foreign direct investments. 4) Higher US Fed interest rate. It is likely that US Fed will increase interest rate. And the net result for Canada is rather questionable. On the one hand, that will likely lead to Canadian dollar weakening and, thus, Canadian export support. On the other hand, US dollar strengthening will lead to world economy slowing down.

[Positive] Teg: Germany

In spite of the current tense relations within the EU, Germany is likely to remain the most powerful economic and political player in the EU due to the structural elements supporting German power within the bloc and most importantly its dominant economy. In my view Germany will continue to demonstrate huge trade surpluses, reflecting the competitiveness of its manufacturing sector and comparably low levels of domestic consumption and investment. This will continue to generate large domestic savings that are generally investing to another countries, providing a a strong primary income surplus. I expect the current-account surplus to remain solid, decreasing consistently to just above 6% of GDP by 2022. As well as I expect that average annual inflation will be at the level of 1.7% in 2018-2022.

[Negative] Teg: France

The government of France recently announced to raise energy and tobacco taxes pursuing to make growth reliing on green sectors and enhance the healthcare. The vogue for electric-car are growing fast. The fiscal stance is projected to be largely neutral over the projection horizon

[Neutral] Teg: Japan

In Japan, growth trend is set to be maintained in 2018, but weaken thereafter as fiscal policy will benefit from planned consumption tax increase. I revised the growth less than 1% for the next years. As I think there is only one possibility to climb at 1% on even more is the expected growth of Global Demand, obviously from Main 3 (USA, China, EU). As per the USA and China - new incentives over softening of tax burdens on corporates - expected to be aggressive using Trump's words. Thus, import is the main driver for the economy of Japan. As It is easy to overestimate the influence of imports, I would tag neutral on the economy of Japan.

[Positive] Teg: Germany

Germany is in a boom phase, with growth rate ~2.5% (the highest since 2011, when growth rate was 3.7% on the back of post-crisis recovery). This growth is fueled by booming real estate market (due to low interest rates), global growth, increasing investments (due to capacity utilization is at the highs) and increasing domestic demand (due to increasing wages and decreasing unemployment which is at the lows). Fiscal policy is rather stable as well: moderate stimulus with budget balance in surplus. I assume that current growth of Germany is rather stable in near-term. However, in 1-2 years there is a risk that real estate market, one of the catalyst, would be overheated, thus, slowing down of growth is possible.

[Positive] Teg: Canada

European import is the main driver for the economy of Canada. As per official sources of EU officers they are not expect any increase of imports of goods. In contrary China and US market's tend to increase import from Canadian business. Thus, I put moderate increase in GDP for the next 2 years

[Positive] Teg: Hong Kong

Positive sentiment for helping high-tech businesses in Hong Kong - a promise given by Hong Kong's chief executive, Carrie Lam Cheng Yuet-ngor to reduce the profit tax on companies and grand tax remissions for their investments in R&D (research and development). This doubtless would attract existing business to invest more in qualifying research and development as well as would attract new investments from abroad to establish new technical divisions in Hong Kong

[Positive] Teg: Switzerland

I would suggest that in conformity with the manufacturing PMI (Purchasing Manager Index) which is at its highest since July 2010 and the services PMI also stands at very high levels. These leading factors give us positive signals for the economy of Switzerland in 2018-2019. Switzerland increases its export compared to others European countries. Internal consumption is expanding faster nowadays that in 2017 due to the decrease of unemployment rate and rising real wages. Thus, I think that real GDP of Swiss would show minimum 2% of growth in 2018

[Negative] Teg: Germany

I guess that aging society of German is the main challenge for its economy. In the logic the government should accelerate special education for immigrants in order to promote solid economic growth. But of course this is very sensible thing which may be in the agenda in minimum 5 years.

[Negative] Teg: Sweden

Growth will likely remain in 2018 as it was back to 2017. With interest rates in the country at -0.5%, holding cash in bank cost people some money, curiously but true. They need to reconsider monetary and fiscal policy to boost growth. Negative rates are widely criticized but Sweden seems not to turn against negative rates, as they just do not want to cap output and lessen real wages. I would argue on the efficiency of such a policy (this only gives the opportunity to earn by the government with tax and lessened obligations to pay on any debt - Sweden officials are collecting too much tax)

[Negative] Teg: United Kingdom

I think that the negative merchandise trade balance will remain the current account in deficit over 2018-2022, offsetting surpluses on the services account. More importantly I expect that UK economy will slowing down its growth since 2021 against the backdrop of the looser trade relations with the EU to mean a larger goods trade deficit and a smaller services surplus. Also I don't believe that UK's policymakers will be able to implement structural reforms in the near-term that have crippled the economy in recent years, including weak productivity growth, ineffective innovation and poor infrastructure. So my outlook on British economy is negative.

[Positive] Teg: France

I guess that economic growth of France has remained solid. The government plans: (a) to decrease the share of government spending by 3 p.p. (in terms of GDP) over the next 2 years (2018-2019), incl. cutbacks in subsidised jobs and housing subsidies, (b) to reduce corporate income tax from 33% to 25%, (c) to cut in capital income, wealth and taxes on property.

[Negative] Teg: Italy

Italy faces significant challenges this year and the next 2019. In most sources It is cited that Italy is the potential highest risk factor for the whole Eurozone. It is suffering from high level of public debt (140% of GDP as of Jan-2018), thus banking systems of Italy needs to be largely restructured (but impossible under Eurozone rules). Due to fundamental weakness of the economy, we can not expect any improvements in Mid-term horizon. Also, Political risks add more challenges, I mean that the leader of euro-sceptic Italy's Five Star Movement might come to power in May 2018, one of their hot idea is so-called Italexit seems to be likely, I mean the political actions about it, practically not (at the earliest in 2022). Also, as matter of fact at founding of Party in 2009 the party was anti-Vladimir Putin, but it has since become much more pro-Russia. More likely that after election the political process of independence and pro-Russia will be the same as in Greece. Over

[Positive] Teg: Hong Kong

As per the local new incentives over tax in China and in the US are announced (I mean the softening of tax burdens on corporates) this we may reckon as a positive signal for HK outlook. As well, more finance analyst in Hong Kong are confident and optimistic about HK this year and the next 2019. As you understand Hong Kong is likely to catch up this positive effect (the recovery of the US and mainland China) for the simple reason that Hong Kong plays its role as international financial center - at lease one of the biggest.

[Negative] Teg: Japan

I expect that Japan economy will continue to grow with growth rate approximately equals to average growth rate in 2012-2017 (Abenomics beginning). The key driver for this is export growth (machinery, chemicals, and non-ferrous metals) due to weak yen and global economy growth. Monetary situation remains healthy as well: despite recent acceleration in inflation, its forecast is still below BoJ target. However, one should note several challenges for Japan economy: 1) Near-term challenges: (1) recent strengthening of yen that increases Japanese exporters concern, (2) weakness in consumer spending due to wages decreasing, as well as new housing construction falling. 2) Fundamental long-term challenge: planned increasing of national sales tax in 2019 from 8% to 10% to cover deficit in pension system (due to Japanese demographic situation). I assume that this will lead to economic growth slowing down (as in 2014 when this tax was increased from 5% to 8%)

[Negative] Teg: Italy

I think that domestic demand growth in Italy and positive outlook for the euro zone economy will be completely offset by political instability in the country. Political uncertainty has increased the potential for financial volatility and could harm the current moderate economic recovery, as well as further postpone of structural reforms at least in the short term. In spite of the possible support by the EU, Italy's high public debt and political instability will continue to give rise to concern for the major euro zone creditor countries, as well as put pressure on stability in the EU and financial sector.

[Positive] Teg: Germany

In most cases (I mean when reading articles written by analysts) the outlook for German economy is promising. They are assumed to implement the policy of wages increase, infrastructure projects. These would boost an inflation (what we know is not bad but indeed positive when it is moderate). The political elite I think must reduce the power of sanction against Russia, I calculated that Germany may easy earn min. 25-30 bn euro. Of course this lies on political grounds and indeterminable in mid-term future.