Global Focus – Economic Outlook Q2-2021
Total Page：16
File Type：pdf, Size：1020Kb
Global Research Global Focus – Economic Outlook Q2-2021 Global growth – An uneven race research.sc.com Standard Chartered Global Research is available across all iOS and Android devices. Our intuitive, accessible and customisable apps* allow you to receive our reports, forecasts, audio-visual presentations and interactive data visualisation tools on-the-go. * Click the icons to download or search ‘Standard Chartered Global Research’ in the app store. If you are in scope for MiFID II and want to opt out of our Research services, please contact us. Issuer of Report Standard Chartered Bank Important disclosures and analyst certifications can be found in the Disclosures Appendix All rights reserved. Standard Chartered Bank 2021 https://research.sc.com Global Focus – Economic Outlook Q2-2021 Table of contents Global overview 3 Cameroon – Moving towards recovery 75 Global growth – An uneven race 4 Côte d’Ivoire – A series of unfortunate events 76 Where we differ from consensus 10 Ethiopia – A particularly difficult quarter ahead 77 Global charts 12 Gabon – The oil price reprieve 78 Ghana – The long reach of the COVID crisis 79 Geopolitical economics 14 Kenya – Third-wave woes 80 Biden’s democracy club 15 Mozambique – Delayed but not denied 81 Economies – Asia 20 Nigeria – Higher oil, faltering reform 82 Asia – Top charts 21 Senegal – Flaring tensions 83 Asia – Macro trackers 22 South Africa – Bracing for a third wave 84 Australia – Chugging along 24 Tanzania – Transition 86 Bangladesh – Turning around 26 Uganda – Oil to drive growth acceleration 87 China – Embarking on the 14th FYP 28 Zambia – Debt restructuring, IMF & elections 88 Hong Kong – Recovery cannot be rushed 30 Zimbabwe – Ifs, ands, and buts 90 India – FY22: A tale of two halves 32 Economies – Europe 91 Indonesia – Reviving the economy 34 Europe – Top charts 92 Japan – Challenges and opportunities ahead 36 Euro area – Cracks in the exit strategy 93 Malaysia – All-round support 38 Switzerland – Back on track in 2021 95 Nepal – Gradual pick-up 40 UK – Ahead of the curve 97 New Zealand – Hold your horses 41 Czech Republic – Infection rates soar 99 Philippines – Battling headwinds 43 Hungary – A delayed recovery 101 Singapore – Watch for the nuances 45 Poland – Resilience amid new COVID wave 103 South Korea – Tailwinds are blowing 47 Russia – Modest recovery expected 105 Sri Lanka – PBoC swap to buffer FX reserves 49 Taiwan – An upbeat start to 2021 51 Economies – Americas 107 Thailand – Confidence remains low 53 US and Canada – Top charts 108 Vietnam – Strong fundamentals 55 Latin America – Top charts 109 US – Post-pandemic bonanza 110 Economies – Middle East, North Africa and Canada – Resilient 112 Pakistan 57 Brazil – One step forward, two steps back 114 Bahrain – Balancing non-oil growth and reform 58 Chile – Taking a shine 116 Egypt – Steady as she goes 59 Colombia – Mixed blessings 118 Iraq – Devaluation amid rigid reform outlook 60 Mexico – More good than bad 119 Kuwait – Higher oil prices to ease liquidity 61 Peru – Speaking in binary 121 Lebanon – The more things change… 62 Oman – Goldilocks scenario 63 Strategy outlook 123 Pakistan – Balancing act 64 Exodus 124 Qatar – Onwards and upwards 65 Forecasts tables 130 Saudi Arabia – Shifting sands 66 Forecasts – Economies 131 Turkey – Treading carefully 67 Forecasts – FX 132 UAE – Recovery underway 68 Forecasts – GDP 133 Economies – Africa 69 Forecasts – Rates 134 Africa – Vaccine delays weigh on the outlook 70 Forecasts – Commodities 135 Africa – Top charts 72 Forecasts – Selected interbank rates by tenor 136 Angola – Oil provides a welcome respite 73 Authors 137 Botswana – Putting fiscal stabilisation first 74 Standard Chartered Global Research | 31 March 2021 2 Global overview Global Focus – Economic Outlook Q2-2021 Global growth – An uneven race A multi-speed economic recovery, with risks Razia Khan +44 20 7885 6914 [email protected] Global The scale of US fiscal stimulus and the speed of vaccine rollout have overview Head of Research, Africa and Middle East Standard Chartered Bank significantly lifted global economic prospects. We raise our 2021 global growth Edward Lee +65 6596 8252 forecast to 5.7% from 4.8%. Growth optimism has driven markets since we made our [email protected] Chief Economist, ASEAN and South Asia initial forecast in December, contributing to commodity gains and new inflation Standard Chartered Bank (Singapore) Limited concerns. However, we maintain a cautious outlook given the uneven nature of the economic recovery. economics Geopolitical The speed of vaccine rollout is a key differentiator of near-term growth prospects (Figure 1). US growth now looks likely to be front-loaded (see US – Post-pandemic bonanza). Around 30% of the US population had received at least one COVID-19 vaccine dose by end-March, enabling a faster and likely more sustained economic recovery. In Asia Europe, vaccine supply bottlenecks and the slower pace of progress have prompted us to lower our 2021 GDP forecast (see Euro area – Cracks in the exit strategy). Downside risks to growth persist given new waves of COVID and the likelihood that containment measures will need to be extended. Europe’s fiscal response to the pandemic has been more constrained relative to the US; slow progress on submitting reform plans is likely to MENAP delay disbursements from the EU’s Recovery Fund. Global growth to bounce back this China is likely to maintain robust growth this year, with the authorities tapering year following the COVID crisis; stimulus only moderately in order to safeguard the economic recovery (see China – policy is playing a key role Embarking on the 14th FYP). The People’s Bank of China (PBoC) has pledged to Africa stabilise the macro leverage ratio by making credit growth more consistent with nominal GDP growth. Rebalancing will become more important, as growth to date has been insufficiently broad-based and concentrated in exports (where demand is largely COVID-related, for example PPE or electronics) or sectors benefiting from easy credit. Consumer-related sectors such as catering, accommodation, tourism and air travel remain well below pre-pandemic levels. Europe The acceleration of industrial production growth has highlighted supply bottlenecks and the risk of rising producer inflation (Figure 3). China’s latest Five-Year Plan aims to prioritise high-quality growth by deepening supply-side reforms, expanding domestic demand and fostering home-grown innovation. Americas Figure 1: Vaccine rollout – EM clearly lags DM Figure 2: The world is experiencing another wave of % of people who have received at least one vaccine dose COVID-19 infections (daily new cases, 7DMA (’000s) 20 100 800 outlook Brazil Strategy Africa Asia India 18 90 700 European Union North America France 16 80 Poland Oceania South America Turkey 600 14 70 Germany 12 World 60 World (RHS) 500 US (RHS) 10 50 400 Forecasts 8 40 300 6 30 200 4 20 2 10 100 0 0 0 29-Dec-20 28-Jan-21 27-Feb-21 29-Mar-21 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Source: OWID, Standard Chartered Research Source: CEIC, Standard Chartered Research Standard Chartered Global Research | 31 March 2021 4 Global Focus – Economic Outlook Q2-2021 India has seen a new surge in In India, more expansionary fiscal policy should support recovery momentum cases, but targeted restrictions overview (see India – FY22: A tale of two halves). We expect a sharp recovery to double-digit Global should allow more activity than growth in FY22 (ending March 2022), driven by consumption and public capex. India’s earlier lockdowns economic recovery has been uneven to date, with the informal sector lagging the formal sector and rural demand growing faster than urban demand. Policy – especially monetary policy – will need to remain supportive to sustain the recovery. Higher oil Geopolitical prices pose a risk, as do obstacles to vaccinating India’s large population. Localised economics COVID outbreaks are a concern. Case numbers have recently surged to their highest since October 2020. We do not expect the majority of the population to be vaccinated until 2022, suggesting that economic activity remains vulnerable to restrictions during episodes of higher infections. The pace of recovery diverges in The pace of recovery also diverges across the rest of Asia. Developing domestic Asia Asia; strong exports and successful pandemic situations are a key driver of this divergence. Taiwan and Vietnam are pandemic management support among the few economies that started 2021 with GDP above pre-COVID levels. Strong growth in Taiwan and Vietnam external demand and successful domestic pandemic management support the positive growth outlook for these economies. In contrast, an early-year surge in infections in Indonesia and Malaysia has negatively affected their 2021 outlook (we downgraded MENAP our growth forecasts for these economies earlier this year). The situation has since stabilised, but not without affecting their growth recoveries. Similarly, we have downgraded our 2021 GDP growth forecast for Japan, partly due to the six-week emergency lockdown in January-February. In domestically driven economies In domestically driven economies such as Indonesia and the Philippines, the pace of Africa like Indonesia and the Philippines, vaccine rollout will be particularly important to the resumption of activity. In the the pace of vaccine rollout will be Philippines, household consumption accounts for c.72% of GDP and contracted 7.9% important in 2020. The economy is now seeing a resurgence of infections to the