G20, Real GDP YOY%
2016201720182019E2020E2021E
G20, Real GDP YOY%1.82.41.521.92.9
Argentina-3.13.9-3.5-0.42.73.2
Australia2.12.82.82.82.72.7
Brazil-2.71.41.32.52.52.2
Canada1.532.121.71.8
China6.76.86.56.266
France0.92.71.41.61.51.7
Germany1.82.61.11.61.51.4
India6.86.37.17.37.47.5
Indonesia55.15.25.15.35.6
Italy0.91.70.710.91
Japan0.92.10.90.50.7
Mexico2.11.52.52.12.12.9
Russia-0.21.51.51.61.5
Saudi Arabia2.1-1.41.62.42.12.1
South Africa0.91.611.71.91.8
South Korea2.93.12.62.62.8
Turkey3.112.93.6
United Kingdom1.91.81.51.61.5
United States1.52.22.51.91.8
[Positive] Teg: India

In most analysts report the outlook for India is largely positive notwithstanding the fact of its slowdown in 2017. Such a growth 7.3%-7.5% for the next two years 2018-2019 adds economy of India as a fastest growing emerging market in Asia and in the world. I would quote factors from UN report: positive forecast is supported by robust private consumption and public investment as well as ongoing structural reforms. Indian government plans to improve Goods and Service Tax as well as Bankruptcy Code which will lead to more efficient trend of growth in Long-run. Once the government of India continues to carry out structural reforms, prudent macro policies and redistribute towards infrastructural project - we may really bet a lot into India's outlook - merely 8% per year in GDP terms.

[Negative] Teg: Brazil

Despite recent stabilization in Brazilian economy after recession in 2015-2016, I assume that this recovery will be short-lived. The thing is, budget deficit remains high and its reduction might lead to both growth lowering (due to reduction of government spending) and social instability (due to unpopular measures such as raise the retirement age). As a result, political crisis is quite possible and, if so, that will lead to second wave of recession

[Positive] Teg: France

France's recovery from its economic downfall in 2012 has been slow in comparison with the most of its European peers. However, according to the results of 2017 (GDP growth = 1.9%) the economic growth has showed the strongest growth since 2011. Taking into account the continued cyclical upturn in the euro zone and increasing of domestic demand, I expect annual growth to average 1.7% in 2019-2022. Also the main challenges for Macron's policy are to reduce the high rate of unemployment (especially among young people), increase competitive advantage, promote the economic growth, improve foreign investors' views about the French labor market, as well as develop the public finances. I believe in Macron's ability to achieve these goals, therefore I expect the reforms will start to gain traction towards the end of 2022.

[Positive] Teg: Brazil

I expect that Brazil's economy will continue to recover from downfall in 2015-2016, as well as weak growth in 2017, and will show annual average real GDP growth at 2.6% in 2018-2022. Lower inflation and interest rates are supporting the growth of private consumption, given by stimulating retail sales and improving household and company balance sheets. However, the credit growth is weak, due to the banks haven't adapted to the sharp decline in the policy rate. In my view, by implementing fiscal reforms and pursuing a sensible policy, the next government could increase the investment, after falling by 25% in 2015-2016, and provide stable economic growth in 2018-2022. Therefore I have positive outlook for Brazil's economy.

[Positive] Teg: Mexico

In spite of Mexico-US tensions, I expect further growth of the country's economy, which will be provided by increasing industrial production. The Mexican peso's depreciation will push the external demand for Mexican products, which in turn will make a positive impact on local manufacturing production and exports. Also mining production will continue to support total industrial production growth, as well as construction activity will continue to expand. In sum, my positive outlook on Mexico's economy reflects sustainable growth in the mid-term.

[Positive] Teg: Argentina

Most sources say that the economy of Argentine is expected to accelerate in 2018 and 2019 on the grounds of the increase of consumption and investments in fixed assets. I remember that they want to raise infrastructure's investments by 20% this year. It is very nice and promising for businesses which engaged in mineral resource extraction, agricultural and chemical sector, well would be done and for the others in total. In such scenario GDP would expand minimum by 3% this year and by 4% in 2019. It is also worth to note (on my opinion this is important) that the government announce to cut the spending's on state apparatus. Nonetheless, this in total is ideal picture. To be skeptical for GDP, I guess adequate rates for 2018 and 2019 are 2% and 2.5%

[Neutral] Teg: Canada

Economic growth rate I expect to slow in the next two years as household consumption and government spending slows. Recent developments in consumption has not been transferred to the increase in wages and I think that house prices will continues to slow, no considerable job growth (if any at all). They also did not announced any substantial government investments. Thus, I project the growth of Canadian economy to ease

[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.

[Positive] Teg: Russia

Russian Government set 2% target growth for 2018 year, I would suggest two main factors which are the base of such growth forecast. Firstly, the growth of internal consumption due to inflation dropped (to 2-3 percent, a level never imaginable for Russia) which ultimately strengthen real wages and thus spending.. Secondly, oil prices, as we see there is a gradual and steady increase in global oil pricing high exceed 3 years history - above $70 per barrel, this brightens Russia's outlook. I would bet minimum 4% of GDP growth for the next 3 years

[Positive] Teg: Turkey

As emerging economy Turkey offers the best investment case in terms of growth and downside risk in oil-linked shares. Due to positive dynamic in world oil prices as I estimate to be limited to 70 USD per barrel for 2018 year

[Negative] Teg: United Kingdom

After Brexit referendum in 2016 UK economy growth rate is constantly decreasing (2015 = 2.3%, 2016 = 1.9%, 2017 = 1.8%). And I assume that full negative effect from both Brexit and entrenched UK economy problems will be felt by UK only in 2019 (planned exit from the EU is March 2019). 1) Productivity problem. During last decade UK's productivity growth is constantly slowing down. As a result, Office for Budget Responsibility's long-term productivity forecast was halved down to 1.2%. 2) Higher inflation due to weaker sterling and, thus, weaker consumer spending power due to Brexit. I assume that weaker consumer spending power is the major cause of slower UK economy growth. One should note that this negative effect is partially offset by industrial production and export growth on the back of weak sterling and global growth. However, I believe that this positive offset will be quite limited as real investments will decline due to political uncertainty. Additional consequence of this factor is accelerating (double-digit) growth in unsecured lending (however, current level of consumer debt to GDP is still below pre-crisis level). 3) UK/EU deal uncertainty. UK wants to maintain a special trading relationship with the EU after leaving EU, but EU, obviously, does not want to give UK such benefits. I assume that negative outcome for UK is quite probable. As a result, additional slowing of UK economy in 2019 is highly likely

[Positive] Teg: Australia

I like Australia's ability to maintain economy growth above 2% pa for nearly 25 years (since 1993) and I expect that Australia has cloudless perspectives to continue this tendency at least in near-term (1-2 years). Major factors that will support this growth are (1) strong domestic demand (wage growth and government expenditure), (2) commodity price growth and export growth (despite export growth is slowing, I expect that demand for minerals and LNG in China will be able to fuel export growth from Australia). Nevertheless, there are some concerns that should be noted: (1) slowing labor market (unemployment rate above average, slowdown in jobs growth), (2) increased household debt (as a result of low interest rates)

[Negative] Teg: South Africa

In spite of installation of Cyril Ramaphosa as the new president and following increasing confidence from the international community and investors, I don't have positive outlook for the South African economy. Tighter fiscal policy and a rise of taxes to keep debt under control and prevent additional credit downgrades, will impede efforts to boost growth. Also structural constraints such as skills shortages and inefficient state-owned companies will continue to weaken economic activity, as well as negative external balance will affect the economic growth in the mid-term.

[Negative] Teg: Canada

I think that exchange rate, commodity prices and strong US economy will keep deficit of the external account of Canada in 2018-2022. Apart from oil, I expect low commodity prices in coming years and this will make negative impact on the current-account. Now we see healthy private consumption, which supported by continued strong household spending against the backdrop of the low interest rates, cheap fuel and an improving labour market. However, monetary policy tightening and increasing prices on the energy resources will slowdown in the private consumption in the near-term. Therefore I forecast slowdown in economic growth of Canada in 2018-2022.

[Negative] Teg: Brazil

The Brazilian government one month ago announced that GDP this year (2018 will grow faster and they wait recovery from the recession for the past 10 years. This is for optimists. I do not see real activity (as you know some big steps) to resolve structural problems in economy. Look, all they wants to do is to narrow a budget deficit by curtailing the social security system. This will not help. Obviously imho.

[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: Saudi Arabia

The economy of Saudi Arabia is primary linked to oil price. For the next 2-3 years most analyst bet on steady growth in oil price, thus, It is likely to forecast economic growth. You know, that the government recently announced that it expects 2.7% GDP real growth rate. On this estimate I would doubt. Last year the government struggled against low oil market by spending cuts in order to lower budget deficit. Now the government plans to raise internal consumer spending by extra payment for government workers and the introduction of value-added taxation (VAT) reform. These all may strive GDP up to 2.0% - 2.1% growth maximum (as per the expectation of barrel of oil at $70).

[Negative] Teg: United States

Trump administration and al around political situation add more uncertainly of the opportunity of return rate on investment, that would surely restrain new investors to spend. Also, we need to particularly emphasis the movements of the USA government toward trade protectionism (e.g. 25% import duty on series of china products). This brings us more economic risk in the USA due to the answer from China in trade wars game. The next step from the USA I would expect (a) restrains in foreign investments from China into the USA and (b) defense of intellectual property (copyrights) of US companies (we know how Chinese producers have been copying western brands). All these put more pressure on economic outlook. But I would expect the real GDP growth would be limited by c2% for the next two years

[Positive] Teg: Russia

Russia's economy shows positive signs of recovery and returns to growth. The main engines of this recovery are: (1) improved and stable macroeconomic situation: low inflation, low unemployment rate, higher real wages (and, thus, domestic private demand), lower interest rates, etc., (2) improved business environment (e.g., Ease of doing business index, ranking of Russia: 2014 = 92, 2015 = 62, 2016 = 51, 2017 = 40, 2018 = 35), (3) favorable commodity prices. I assume that near-term risk associated with USA sanctions against Russian companies and USA increased import tariffs for steel and aluminum will not have significant effect for economy growth. However, there are some fundamental issues that could adversely affect Russian economy: (1) Russian banking system problems. Despite Central Bank's attempts to clean banking system, one should note that (a) these activities are rather costly (some estimate ~$40 ban up to now), (b) competitiveness is decreasing (as the share of private banks decreasing), (c) confidence of business in the banking system is low. (2) Decreasing productivity coupled with declining labor force (due to demographic). (3) Traditional dependence of Russian economy from oil and gas (mainly, due to high share of oil and gas income in Budget)

[Positive] Teg: India

I think that further economic growth in India, with an average annual GDP growth of 7.6% in 2018-2023, will be supported by strong increases in private consumption and accelerating gross fixed investment. However, this will depend on progress in recapitalizing the banking sector, because a lack of broader reforms in the sector will continue to place constraints on lending activity. Also I see positive impact for the investor sentiment in government measures for improving the business environment, such as tax reforms and the increased digitalization of government-to-business services. However, India's trade deficit will remain high in 2018-2022, due to price of crude oil, which is India's largest import item in value terms. Exports will increase, but the rate of growth will be incommensurable in comparison with imports growth.