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
[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: 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.

[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: 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)

[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

[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

[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: 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.

[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.

[Negative] Teg: United Kingdom

I would suggest that all situation over Skripal Case was done by internal forces of Great Britain itself, by the community against Teresa Mai. I believe that they just set her up (to make her as a scapegoat). This is the easiest way and method for internal political struggle. Well, this in coupe with high level of debt against European Union due to Brexit leaves us with no driver for growth in economy of Great Britain. At least, very modest opportunities.

[Negative] Teg: China

I expect the slowdown in China's economic growth in the near-term, driven by reduction in domestic demand, which would be the main constraint on achieving ambitious plan of the government for economic expansion. Also I think that slowdown in industrial production will continue its negative trend and will lead to volatility in domestic financial markets, based on concerns about risks related to the trade outlook. Probably, US-China trade tensions will fresh strain and will make a negative direct impact on the Chinese economy. That's why I have bearish view on China's economy in the mid-term.

[Neutral] Teg: Russia

I just want to express one interesting point on the corruption in military sector in Russia. You all remember that Russia's Military Defense Minister Mr. Anatoly Serdyukov had been accused for wasteful spending of multi-billions of rubles which were dedicated to military upgrade and development. And what did Mr. Putin..., he just fired him but simultaneously they announced that this was an unprecedented corruption in Military Sector. Secondly, during this particular time Russians had not been doing any independent movement in global geopolitical scene. But right after that Mr. Putin demonstrated all his strength, military strength. I am assured that this was a strategic rational for this: they just showed to the world that Military Sector was under the control of such a man like Mr. Serdyukov in order to lull the world into a false sense of security that there were all thefts from senior to juniors in military sector of Russia and thus no development was possible....One day I had a meeting with senior military officer and he told me that Mr. Serdyukov never was in touch with any military officer.. This means that the Minister Mr. Serdyukov was just a folding screen behind which the really development of military force was underway. Maybe this is untrue but logically reasonable. I do not want to say that Russia does not have a corruption, It has indeed but I think that that strategic sectors are under close control.

[Positive] Teg: Indonesia

I expect further growth of Indonesia's economy, which will be accompanied by real GDP growth of 5.1% per year in 2018-2022. Growth in private consumption will remain strong and especially will be supported by election-related spending in 2019, as populist government measures for supporting household consumption. According to my forecast, the government's efforts to increase the inflow of private investments (domestic and foreign) in infrastructure and manufacturing will ensure capital raising in the mid-term. As a result, gross fixed investment will increase by 5.6% on average in 2018-2022.

[Positive] Teg: Mexico

In 2017 foreign investments in Mexico fell due to uncertainty relating to USA commitments to NAFTA. This will result in poor growth of GDP for 2018. This goes together with domestic policy uncertainty remains until presidential election on 1st July 2018. After, I would suggest that we may expect pro-American president thus we may expect positive shifts in policy (mainly renegotiation of NAFTA with the USA). Growth in Mexico seems to be moderately higher in 2019 and 2020, at 2.5-2.7 percent per annum but this year 2018 - poor 1.0% - 1.9%

[Negative] Teg: Russia

The confrontation between Russia and the West intensified statist, nationalist and protectionist trends within the government. At this case the main priority for the Russian government will be economic sovereignty, which would be expressed by insulating the economy from external shocks. The main tools of this strategy include a large positive sovereign external asset position, protectionist measures to support domestic manufacturing through import substitution and a cautious approach to foreign investment. In my view the implementation of this strategy as part of transformation period will be associated with a slowdown in the Russian economy growth rate in the medium term. Also the weakness of most political and legal institutions, as well opaque governance system, will put additional pressure on the country in this transitory period.

[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.

[Positive] Teg: China

I believe that China is able to achieve its goal, announced in April 2018 by the Communist Party of China, to double real GDP by 2020 compared with the level in 2010, that would require real GDP growth to average at least 6.3% a year in 2018-2020. Money squeeze in 2017 will make negative impact on economic activity, however, I think this is likely to be offset by looser economic policy settings. Therefore consumption and investment growth will remain stable in 2018. The external sector is sensible to US-China trade tensions, but I don't expect an escalation into full-blown trade war that could have a major impact on GDP growth in China. And in spite this trade frictions I expect that China's large merchandise trade surplus will expand over 2018-2022. Also, according to my expectations, the consumer prices will grow by an average of 2.6% per year in 2018-2022

[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.

[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: 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.