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State of the Macro-economy

State of the Macro-economy. Tanveer Singh Chandok (Director of Macroeconomics). World Economic State in a nutshell. World Economic State in a nutshell. Europe. Pulled out of the insane spiral at the end of 2012 Slow growth in 2013 Biggest problem currently: Credit Growth

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State of the Macro-economy

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  1. State of the Macro-economy Tanveer Singh Chandok (Director of Macroeconomics)

  2. World Economic State in a nutshell GTSF Investments Committee

  3. World Economic State in a nutshell GTSF Investments Committee

  4. Europe • Pulled out of the insane spiral at the end of 2012 • Slow growth in 2013 • Biggest problem currently: Credit Growth • Eurozone consumers are deleveraging but at a slower rate • Growth in the Eurozone mortgage loans continues to weaken • Primary contributors are Spain and Italy • Collapse in mortgage growth form the peak of 27% during pre-financial crises shows that the housing bubble in Spain is still unwinding • Bottom line: periphery of the Eurozone is still coming out the recession, ECB has not hit all targets GTSF Investments Committee

  5. North America: Fed up with the FED • GDP growth beat forecasts @ 2.5% • May initiate the FED to move with it’s tapering program • Stock prices rose, as did yields on govt. bonds • Recent surge in exports • Jobless claims in the U.S fell • Improving underlying private demand should support a pickup in GDP growth • Looking shaky towards the end of the quarter • FED tapering the $85 billion buy-back program • Estimates vary between as early as this September or mid-2014 GTSF Investments Committee

  6. Emerging Submerging Markets GTSF Investments Committee

  7. China • Main monthly figures from trade to industrial output improved in July • In the middle of a transition from an investment-led economy to a consumption-driven one; and from an economy addicted to rapidly rising credit to one that is more self-sustaining • The transition has not occurred yet, and monetary policy will play a key role in determining the rate of growth GTSF Investments Committee

  8. Japan • Q2 GDP growth @ 2.6% did not keep up with the blistering 3.6% growth towards the start of the year: still impressive • Shinzo Abe’s “3-arrow plan”: • Shocked the morbid economy into growth • The 3rd arrow, “structural reform” is still to prove it’s worth GTSF Investments Committee

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