At an event organized by JP Morgan Asset Management, Lucía Gutiérrez-Mellado, the firm’s director of strategy, announced a slowdown in economic growth. However, she stressed that recession has been avoided, and the strength of this slowdown will depend largely on developments in the labor market.

Gutiérrez-Mellado noted signs of weakening in the U.S. labor market, noting that this year has been a surprise, with unexpectedly robust growth in the first half, driven by savings and tax aid that now has limited room to continue supporting the economy. According to her, the future of the American economy will be linked to the labor market.

As for Europe, the director of JP Morgan AM predicted a less pronounced slowdown, in part due to the surprising resilience of the United States.

Gutiérrez-Mellado also highlighted the leadership of raw materials in the last quarter, especially the price of oil, which is influenced by events in the Middle East.

As far as China is concerned, she anticipated that macroeconomic data will reach a nadir before the end of the year and some recovery in economic growth is expected as the Chinese government implements monetary policy measures.

Consequently, Gutiérrez-Mellado emphasized that she will maintain a neutral position in the manager’s portfolios, given the perspective of a low growth environment and a restrictive monetary policy. Furthermore, they will remain neutral in fixed income compared to equities.

Regarding inflation, Gutiérrez-Mellado expressed that, despite some increases in interest rates, they believe that the end of interest rate increases by central banks is near, with the possibility of an additional rise in the United States at best and the conclusion in Europe.

To conclude, she highlighted that the economic scenario is more positive compared to a few months ago, with moderate economic growth and a restrictive monetary policy. Additionally, she announced that the JP Morgan AM markets guide, which used to be updated quarterly, will now be updated daily in Europe, following the same practice as in the United States.

K. Tovar

Source: Descifrado

(Referential image source: Mathieu Stern, Unsplash)

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The European Commission made new forecasts for inflation growth in Spain for this 2022, raising the forecast to 8.1 % compared to the 6.3 % estimated last May and maintaining 4 % for the growth of the Spanish economy at closing of the year.

The new economic estimates of the Community Executive are framed within an inflationary environment as a consequence, mainly, of the upward spiral of energy resources and the rise in the prices of raw materials due to bottlenecks in the supply chain as a consequence of the war between Russia and Ukraine.

The estimated figure for Spain is below the community average, which was estimated at 8.3 %. However, it stands out from the 7.6 % expected for the eurozone.

GDP rebound

In the estimates made by the European Commission, a rebound in the Spanish Gross Domestic Product (GDP) also stands out with respect to the average of 2.6 % forecast for the eurozone. Spanish GDP is estimated at over 2.7 % in 2022.

If the estimate for GDP is achieved, the Spanish economy would become the seventh economy in the area with positive economic growth, behind Portugal, Slovenia, Ireland, Croatia, Hungary and Malta and on a par with Greece.

For 2023, the Commission “estimates a rebound in Spain’s GDP of 2.1 %, up to 1.3 percentage points less than expected in spring and 2.3 % less compared to the forecasts at the beginning of the year” but the figure This is above the 1.5 % growth forecast in 2023 for the community average and the 1.4 % for the eurozone.

M. Rodríguez

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Source: ondacero.es

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The International Monetary Fund (IMF) published its new estimates on economic growth and slightly modified its forecasts for the Latin American and Caribbean region by 2.5 % for this 20220 in the framework of an environment marked by uncertainty due to the war between Russia and Ukraine.

According to the organization, the tensions in the international environment, as a result of the war, cause the estimates to be quite “uncertain”. However, the entity forecasts that the “general growth of the region will moderate to 2.5 % during 2022–23, a figure that represents an improvement of 0.1 percentage points” compared to forecasts made in January.

The IMF is emphatic in pointing out that international tensions make forecasts “even more uncertain than usual.” For the largest economy in the region, Brazil, the financial entity estimated a “growth of 0.8 % in 2022 (+0.5 points compared to January forecasts) and 1.4 % in 2023 (-0.2 points), while Mexico, the second regional economy, would grow 2 % this year (-0.8 points) and 2.5 % next year (-0.2 points).”

Impact of the European economy in the region

According to the IMF, and despite the fact that the Latin American and Caribbean region has fewer direct links with Europe, compared to other regions, the inflationary process that is impacting the old continent, as well as its measures to tighten monetary policies, will disturb the economies of Latin America. Latin.

The agency’s report describes that before Russia’s invasion of Ukraine, inflation had already increased in several of the economies of the Latin American region as a result of the increase in the cost of raw materials and the “imbalances of supply and demand induced by the pandemic”, which caused that different central banks in the region “were already under pressure before the war.”

Additionally, it highlights that the insufficiency in the supplies of products that every war generates will increase these pressures “in particular through increases in the price of energy, metals, fuels and food” could significantly increase the risk of social unrest,” says the report.

M. Rodríguez

Source: eluniversal.com

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The International Monetary Fund (IMF) published the new estimates on economic growth for Latin America in 2021, raising them to “6.3 %, that is, half a point above its July forecast, thanks mainly to the good development of the raw material export sector.“

According to the IMF, Venezuela will register a contraction of its economy in the order of 5 %, half the figure published in its last report, last July, when it estimated the reduction in economic activity at 10 %.

However, Venezuela is not the only country that suffered variation in the new report on the Global Economic Outlook (WEO). Brazil and Mexico also “saw their forecast lowered by one tenth compared to three months ago, to 5.2 and 6.2 %, respectively.”

Positive growth

Some countries in the region will have higher growth than was estimated last July. Argentina will have a growth of 7.5 % in 2021, compared to 6.4 % reflected in July by the IMF. This country is negotiating a debt refinancing agreement with the IMF for about 45,000 million dollars, in a plan subject to policies that improve economic activity and fiscal health.

According to the IMF, Chile will be the Latin American country with the highest growth, forecasting 11 % for this year, compared to 6.2 % projected in April. These projections are a consequence of the production levels and reserves of copper and lithium of the country. On the other hand, Colombia will grow 7.6 % and Peru 10 %, while Central America as a whole will grow 7.7 %.

The report also indicates that the Caribbean economies, which depend mostly on tourism, will register a 3.6 % development, a figure higher than the 2.4 % calculated in the previous update.

M. Rodríguez

Source: primicia.com.ve

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