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: 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)

[Negative] Teg: China

There are rumors that in light of china's currency depreciation, the central bank is likely to tighten liquidity. Obviously, it will raise further concerns in relation to the growth outlook of China. I explain: the US tax reform is underway, and once to be carried out this will cause interest rate increase in the US market, the will result in capital flow from China into the US and will ultimately weaken the yuan. Thus I think that GDP growth will slow.

[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

[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.

[Positive] Teg: United States

Only positive signal is that the USA tax policy changes (I mean corporate tax increase) that would probable boost the recovery of economy - positive impact. Unemployment rate is low and continues to be at its natural level (4-5%). According to the key economic indicators the outlook for the US economy is healthy. I would suggest the estimation of real GDP to be within 2-3% for 2018-2020. Nonetheless President Trump promised to increase growth to 4 per cent, let's see.

[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%

[Positive] Teg: Saudi Arabia

The economy is expected to benefit this 2018 year from higher oil prices reflecting the success of cuts by OPEC and allies and strong as expected global growth compared to 2017. This additional revenue will help to boost internal consumption which constitute around the half of SA GDP. I would suggest a gradual growth in GDP from 2.2% in 2018 up to 2.5% in 2021. Also, the government announced privatization of Saudi Aramco and some others assets, this should attract more foreign investors to Saudi Arabia. If it happens it would be the greatest oil stock IPO with the total value of more than 1.5 trillions of dolor (I am measuring by Price-to-Reserves multiple). How many shares the Government would offer we do not know but it is rationale around 5%-10% in IPO, which would result in 75-150 billion of dollars. This is a good sign for investors and opportunities that Saudi Arabia offers if they would not postpone privatization as it was...

[Negative] Teg: Turkey

After rapid increase in real GDP at the end of 2017 (+3.3% in 2016 vs +7.3% in 2017), supported by government stimulus measures and credit guarantees, as well as political pressure on banks to provide a loans and improved export competitiveness, I expect that in 2018 the Turkey's economic growth will slow down to 4%. This slowdown will reflect the impact of tax boost, higher interest rates, tightening of global liquidity against the backdrop of weaker Turkish Lira, increased inherent instability and higher inflation. As a result all planned government measures to increase employment and investment, will be fully blocked by these negative factors. In addition, foreign capital inflows will be offset by political instability in line with the transition to a presidential system of government, domestic financial vulnerability and lower interest rate in comparison with the developed economies.

[Positive] Teg: Russia

I heard that notwithstanding the sanctions a lot of German businessmen are keen to invest and 2-3 times more right after the presidential election. I personally met about 10 good wealth persons. In my estimates this would give 2-3pp. more in GDP. I bet that Russia is one of the top country to invest in amidst emerging markets.

[Negative] Teg: United States

The US economy is one of the most diversified national economies in the world and has been leading the world economy for the last 100 years. The US is having strong growth momentum and I think this trend will continue in 2018-2019. The strong labour market data will keep the Federal Reserve on a steady path of monetary tightening, so I expect an additional rate increase during 2018-2019. Geopolitical concerns in Europe and better-than-expected economic data of the US are driving the price of US dollar, however, the renewed trade war jitters may pause US dollar's rising anytime. In addition, I expect further growth of the US economy given by significant support from the tax reform and the budgetary expenditure

[Negative] Teg: India

India's outlook is more positive as many investors and agencies think, but such a positive factors are something like promises of the government's projection. I am very skeptical on this. Around 40% of industrial facilities face with low capacity utilization rate, infrastructure is poor in comparison to China, many banks have on its balance a lot of non-performing assets wherethrough invested a lot into non-perspective sectors. Well, high-loaded investments in infrastructure is very critical for economy growth in India. But nowadays there is no any measurable action on it. Thus, I would suggest rather faded prospects for 2018-2019, but brighter right after 2019

[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.

[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.

[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

[Positive] Teg: Brazil

After recession in 2015-2016 Brazil shows strong signs of recovery. The major problem of Brazil economy was high inflation that led to (1) decreased real consumption (coupled with high unemployment rate), (2) higher interest rate (for both households and government). Banco Central do Brazil was able to take prices under control and, thus, ensuring a healthy mix of falling inflation and lower interest rates. The result is economy growth due to (1) private consumption increasing, (2) unemployment decreasing, (3) export increasing. Nevertheless, budget deficit remains high and that creates risks. That is why I assume that next steps might be (1) limitation of government expenses, (2) privatization, (3) pension reform (particularly, unpopular measures such as raise the retirement age).

[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

[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: United States

Over the last year, the US economy has made a profit on combination of stable growth, strengthening leading indicators, modest inflation, as well as gradually rising interest rates. And I think US will continue its growing tendency in 2018-2022. Also the US manufacturing sector is demonstrating the strongest expansion since 2011 and in my view will lead to increasing in manufacturing jobs. In addition I don't expect that US-China trade tensions will make direct negative impact on the US economy, so I bet on further sustained growth of the country?s economy.

[Positive] Teg: Australia

Australian representatives two or three years in a row talks about rebalancing to non-mining sector through government investments into it. They plans tax relief for business (a gradual reduction) by 5 p.p. They do it on the pace of the Trumps attempt for aggressive tax rate cuts for businesses. This is rather good news for industry. thanks'. This will generate jobs and helps to raise sluggish economic development into somewhat measurable.