McKinsey Global Economic Intelligence Report - January 2014

CONFIDENTIAL
Copyright 2013 McKinsey & Company. This document contains the confidential and proprietary information of McKinsey & Company.
Do not reproduce, disclose, or distribute the information contained herein without McKinsey & Company's express prior written consent.
Global Economics Intelligence
Released January 2014
(data through December 2013)
STRATEGY CONTEXT
Global Summary Report
To subscribe to this complimentary briefing, please contact
GEI_subscription@mckinsey.com
McKinsey & Company |
Disclaimer
1
This report is intended for the purpose of illustrating the broad
capability of McKinsey & Company. No part of it may be circulated,
quoted, or reproduced for distribution outside the client organization
without McKinsey & Company's express prior written consent.
We also recommend that its content not be used for critical decision
making without first consulting your McKinsey contact. McKinsey &
Company shall not be responsible or liable for any decisions made
by you or your company based on the use of this report.
As global growth ticks upward, so do risks
Global Economics Intelligence Global Executive Summary
January 2014
2
With 2014 under way, there is optimism in the global
economy. Latest data for the United States
confirms that fundamentals are improving, with a
stream of positive economic news from
manufacturing and consumer confidence to retail
sales and housing prices. In the Eurozone, while
fiscal austerity, high unemployment and tight credit
continue to weigh on growth, the ECB has
managed to calm sovereign debt concerns and
business and consumer confidence is better.
Chinas growth is clocking in at a robust level
relative to other emerging markets.
Recently world leaders met in Davos at the World
Economic Forum and the general sentiment could
be described as one of cautious optimism. There
is reason for optimism, yes, but divergence
between major economiesthe United States,
Eurozone, China, and leading emerging markets
still exists. As the global economy expands, certain
risks loom larger too. There are plenty of question
marks. Its unclear what a sustained Eurozone
recovery may require, given challenges like
SOURCE: Haver Analytics; McKinsey's Global Economics Intelligence analysis
1 India: BSE Sensex-30; Brazil: Bovespa; Russia: RTSI Index; China: SSE Composite Index; Germany: DAX; U.K.: FTSE 100; U.S.: S&P 500; France:
CAC 40. Updated through 20 January 2014.
Equity Markets
1
Monthly, index (Jan 2007 = 100)
0
50
100
150
200
250
300
2014 2013 2012 2011 2010 2009 2008 2007
U.S.
Russia
China
Germany
France
Brazil
India
U.K.
Head of the
International
Monetary
Fund
Christine
Lagarde,
gestures as
she speaks
during a
session at the
World
Economic
Forum in
Davos,
Switzerland,
Saturday,
Jan. 25,
2014. (AP
Photo/Michel
Euler)
Global Economics Intelligence Global Executive Summary (contd)
January 2014
As global growth ticks upward, so do risks
banking sector weakness and high unemployment.
Concerns about Chinas prospects center on
banking sector health and its ability to transition
effectively to domestic consumption-based growth.
Some emerging economies are challenged on
multiple fronts. Indicators for Brazil, India, and
Russia are mixed. With a general election on the
horizon, Indias economy remains on shaky ground
with stronger trade data being overshadowed by
continued weakness in domestic demand. In Brazil,
weak GDP growth is coinciding with growth-
restricting policies to combat high inflation and a
weakening currency. And in Russia, GDP grew at
the slowest pace in four years. Following its
December 2013 announcement, the U.S. Fed began
tapering its monetary stimulus this month, starting
with a $10 billion reduction. Pending further
tapering, many emerging market currencies have
since slipped against the USD, as some countries
contend with a triple threat of domestic weakness,
global conditions, and market gyrations. So, while
growth expectations are certainly higher for the
global economy, the perceived risks are greater too.
SOURCE: Eurostat; BLS; EIU; IBGE; NBS; Havers; McKinsey's Global Economics Intelligence analysis
Unemployment rate
% of labor force (monthly)
1 Data for India and China are annual and shown as a smoothed trend line. 2 No new updates for Russia unemployment
3
0
2
4
6
8
10
12
2010 2009 2008 2007 2013 2012 2011
India
1
China
1
Russia
Brazil
US
Eurozone
Federal Reserve
Chairman Ben
Bernanke speaks
during a news
conference at the
Federal Reserve
in Washington,
Wednesday, Dec.
18, 2013. The
Fed will begin to
reduce bond
purchases by $10
billion in January
because of a
stronger U.S. job
market.(AP
Photo/Susan
Walsh)
NOTE: This word reflects what McKinsey attendees heard at Davos from speakers, both from public and private sector. This does not represent
McKinseys views.
SOURCE: McKinsey Global economics intelligence analysis
Sentiment at Davos
Davos World Economic Forum
January 2014
4
What we heard at Davos this year
Worsening
Relative change in indicator level
Flat or no significant change Improving
Worse than
2007 level
Same as or
better than
2007 level
Global Snapshot (country momentum analysis)
January 2014
SOURCE: McKinsey's Global Economics Intelligence analysis
= Current month momentum
= Previous month momentum
5
Global Heat Map of macroeconomic, financial market, and government and policy indicators
January 2014 vs. December 2013
Sustained growth momentum in China and U.S.; Brazil, Russia and India decelerate, while
Eurozones economy may have bottomed out
Indicator
category
Trade/external
Consumer
1
Labor market
1
Business/industry
Real estate
Prices
Equity
Credit
Forex
Debt
Public-sector health
Public policy
Emerging economies Developed economies
Severe decline Worsening Significant improvement Improving No significant change
Heatmap color explanation
Macroeconomic
Financial
markets
Government
and policy
6 SOURCE: McKinsey's Global Economics Intelligence analysis
Change vs. prior month
Global Heat Map of macroeconomic, financial market, and government and policy indicators
January 2014 vs. 2007 levels
Severe decline Worsening Significant improvement Improving No significant change
Heatmap color explanation
Indicator
category
Emerging economies Developed economies
Trade/external
Consumer
Labor market
Business/industry
Real estate
Prices
Equity
Credit
Forex
Debt
Public-sector health
Public policy Government
and policy
7 SOURCE: McKinsey's Global Economics Intelligence analysis
Change vs. 2007 levels
Sustained growth momentum in China and U.S.; Brazil, Russia and India decelerate, while
Eurozones economy may have bottomed out
Macroeconomic
Financial
markets
Critical trends and risks in the global economy
January 2014
Deterioration vs. previous month/period
Improvement vs. previous month/period
No significant change
SOURCE: McKinsey's Global Economics Intelligence analysis
Economic data signals an uptick especially in global trade, but as the Fed begins tapering its
monetary stimulus (QE3), the implications for financial markets are unclear
Consumer spending rose across countries except in China; In the Eurozone, annual growth of retail
sales index increased to the highest level since March 2007
Developed markets consumer confidence rose in December; while declining in emerging markets
Consumers
and
households
A
Global manufacturing PMI accelerate to a 32-month high in December, while the overall services sector
also continued to expand
Russias manufacturing PMI and India's services PMI were the only two indices that remained in
contraction zone in December
Business
and industry
B
Container Throughput Index increased in December to its historical high and suggests sharp rebound
of global trade at the end of 2013
Export increased across the countries except the Eurozone
Trade and
external
C
Inflationary pressures remained stable across countries except Brazil and India where it rose
Gold prices increased in January by ~5% but declined by the same amount from Nov-Dec 2013
Emerging market currencies were volatile in Dec and Jan following the news of US QE tapering
Prices D
U.S. unemployment rate fell to 6.7%
Seasonal factors drove unemployment to 4.6% from 5.2% in Brazil
Labor
markets
E
10-year bond yields for the U.S. and Germany increased at the end of 2013 after the QE tapering
announcement, but fell in early Jan alongside other economies
Equity performance remained mixed in early Jan; in Dec equities in advanced economies recorded
gains, especially the S&P500
Financial
markets
F
The Fed held its first FOMC meeting from Jan 28-29 and the committee decided to make a further
measured reduction in the pace of its asset purchases in February
Bank of Japan held its two-day policy meeting in January but did not announce any change in its policy
stance. India and Brazils central banks raised benchmark interest rates to combat high inflation
Government
and policy
G
8
Contents
II
Global pulse
Leading indicators, forecasts, and executive sentiment
I
Major indicators executives should watch
A. Consumers and households
B. Business and industry
C. Trade and external
D. Prices
E. Labor markets
F. Financial markets
G. Government and policy
9
Retail sales growth
13.4
3.7
-10
-5
0
5
10
15
20
25
30
35
5.7
4.5
A J J J J O A J O O J J J J A O A J J O J O
1
A O J
2.0
A A J
U.S. Eurozone Russia China Brazil
2007 2008 2009 2010 2011
Y-o-y (monthly)
2013
SOURCE: Census Bureau; Eurostat; National Bureau of Statistics of China; BCB; McKinseys Global Economics
Intelligence analysis
1 The China figures are from December ; other data are for November
2012
A. Consumers and households retail sales
January 2014
10
Retail sales accelerated across the board except in China; In the Eurozone, annual growth of
retail sales index increased to the highest level since March 2007
1 Measures the confidence, major concerns, and spending habits of online consumers in 58 countries on a half-yearly basis. 2 Latest data are for Q3
2013. 3 Consumer confidence readings on the chart may differ from those reported because data were rebased to January 2007 to show relative
changes in confidence across countries.
SOURCE: Global: Nielsen; U.S.: Conference Board; Eurozone: Eurostat; China: national sources; Brazil: FGV; McKinsey's
Global Economics Intelligence analysis
Index (quarterly)
2
Nielsen Global Consumer Confidence Index
1
100
90
80
0
94
Q1
2013
Q1
2012
Q1
2011
Q1
2010
Q1
2009
Q1
2008
Q1
2007
71
92
102
150
100
50
2013 2012 2011 2010 2009 2008 2007
Brazil China Eurozone U.S.
Country Consumer Confidence Index
3
Indexed to Jan 2007 = 100 (monthly)
A. Consumers and households consumer confidence
January 2014
11
Consumer confidence in advanced economies rose in December, while declining in emerging
economies
Contents
II
Global pulse
I
D. Prices
E. Labor markets
12
Diffusion index, seasonally adjusted (monthly)
JPMorgan Global Purchasing Managers Index (Manufacturing)
JPMorgan Global Purchasing Managers Index (Services)
Diffusion index, seasonally adjusted (monthly)
53.3
60
50
40
0
O J A J O J A J O J A J O J A J J A J O J A J O J A J O
A J O J A J O J A J O J A J O J A J O J A J O J O
0
40
50
60
J A J
53.6
NOTE: A reading above 50.0 indicates an increase from the previous month and a reading below 50.0 indicates a decrease. The country-level data
are the PMIs for individual countries as sourced from Markit Economics or the Institute for Supply Management (ISM) and are not a breakdown
of the JPMorgan Global PMI.
2007 2008 2009 2010 2011 2012 2013
B. Business and industry Purchasing Managers Index (PMI)
January 2014
2007 2008 2009 2010 2011 2012 2013
The end of 2013 saw growth of the global
manufacturing sector accelerate to a 32-month
high
Global manufacturing production expanded
for the fourteenth straight month in December
Increase in global manufacturing employment
for the sixth consecutive month was recorded
and input prices also increased
According to the survey The global
manufacturing sector ended 2013 on a
positive note. According to the global PMI,
output was rising at the fastest pace in almost
three years
Global service sector continued to expand during
December
Latest expansion of service sector output due
to a marked increase in new business and
new orders
The global service sector maintained solid
growth momentum in December as per the
release
SOURCE: ISM; JPMorgan; McKinsey's Global Economics Intelligence analysis
In December 2013 both global manufacturing and services sector expanded on new business
13
Over the past 2 months
O
0
35
40
45
50
55
60
65
J A J O J A J O J A J O J A J O J A J O J A J O J A J
2009 2010 2011 2008 2007 2012
50.8 49.6
49.4
57.3
50.5
50.7 48.4
50.5
52.7
57.0
U.S.
51.6
Euro-
zone
49.7
Brazil Russia India China
Nov 2013 Dec 2013
U.S.
Eurozone
Brazil
Russia
India
China
NOTE: A reading above 50.0 indicates an increase from the previous month and a reading below 50.0 indicates a decrease. The country-level data
are the PMIs for individual economies sourced from Markit Economics or ISM and are not a breakdown of the JP Morgan Global PMI
SOURCE: PMI for U.S.: ISM; Eurozone: Markit; India, China, Brazil, and Russia: HSBC; McKinsey's Global Economics
Intelligence analysis
Purchasing Managers Index Manufacturing
Diffusion index (monthly)
2013
January 2014
14
Manufacturing PMI for most economies ended the year on a high note in December, indicating
expansion; the exception was Russia
70
60
50
0
O J A J O J A J O J O J A J O J A J O J A J J O J A J A
India Russia Brazil Eurozone U.S. China
2009 2010 2011 2008 2007 2012
52.5
47.2
52.9
52.3
51.2
53.9
50.9
46.7
53.6
51.7
51.0
53.0
China India Russia Brazil Eurozone U.S.
Dec 2013 Nov 2013
NOTE: A reading above 50.0 indicates an increase from the previous month, and a reading below 50.0 indicates a decrease. The country-level data
are the PMIs for individual countries as sourced from Markit Economics or the Institute for Supply Management; they are not a breakdown
of the JPMorgan Global PMI.
SOURCE: PMI for U.S.: ISM; PMI for EZ: Markit; PMIs for India, China, Brazil, and Russia: HSBC; McKinsey's Global
Economics Intelligence analysis
Purchasing Managers Index Services (PMI)
Diffusion index (monthly)
2013
January 2014
15
Indian services PMI continued to contract in December; other economies indicted expansion,
although at a slower pace
Contents
II
Global pulse
I
D. Prices
E. Labor markets
16
Total exports
0
100
200
300
400
2013 2012 2011 2010 2009 2008 2007
0
100
200
300
400
2013 2012 2011 2010 2009 2008 2007
Russia
China
Brazil
India
Eurozone
U.S.
NOTE: Exports and imports are not seasonally adjusted.
SOURCE: National statistical Web sites; Havers; McKinsey's Global Economics Intelligence analysis
Total imports
C. Trade and external export and imports
January 2014
Exports increased across the board except for the Eurozone; the U.S. posted the highest
increase (5.1% y-o-y); import growth remained positive only in China
17
y-o-y % change
y-o-y % change
-0.25
0
0.25
D N O S A J J M A M F J
-0.3
0
0.3
D N O S A J J M A M F J
2013
2013
119.9
80
85
90
95
100
105
110
115
120
2011 2010 2013 2008 2007 2012 2009
NOTE: The RWI/ISL Container Throughput Index provides timely information on short-term trends in international trade. The database covers 72 ports,
which handle about 60% of world container throughput. The monthly data do not include figures for Rotterdam, Antwerp, and Dubai.
SOURCE: RWI/ISL; McKinsey's Global Economics Intelligence analysis
RWI/ISL Container Throughput Index
Index level
C. Trade and external Container Throughput Index
January 2014
18
Container Throughput Index increased in December to its historical high and suggests global
trade rebounded significantly at the end of 2013
96
98
100
102
104
106
108
110
112
114
116
118
120
122
124
126
128
130
132
134
136
138
140
142
2013 2012 2011 2010 2009 2008 2007
C. Trade and external World trade monitor
January 2014
Trade volume increased by 0.2% in November on higher exports from most emerging
economies and increased imports in advanced economies
SOURCES: Netherlands Bureau for Economic Policy Analysis; McKinsey's Global Economics Intelligence analysis
CPB World Trade Monitor
Volume, index level, 2005=100
19
y-o-y % change
November 2013 CPB World Trade Monitor details
0.23
-0.24
1.41
3.22
0
0.74
4.97
5.66
Export Import
Advanced
economies
Emerging
economies
m-o-m % change
y-o-y % change
Contents
II
Global pulse
I
D. Prices
E. Labor markets
20
% y-o-y (monthly)
Consumer price indices
Producer price indices
% y-o-y (monthly)
1.2
-1.2
-10
-5
0
5
10
2013 2012 2011 2010 2009 2008 2007
U.S. Eurozone
1.1
2007 2008 2009 2010 2011 2012 2013
0.8
-2
0
2
4
6
U.S. Eurozone
D. Prices advanced economies
January 2014
SOURCE: Eurostat; national statistics Web sites; press; McKinsey's Global Economics Intelligence analysis 21
Inflationary pressures remained contained in advanced economies
5.1
7.5
-1.4
2.0
-20
0
20
40
O J A J O J A J O J A J O J A J O J A J O J A J O J A J
Russia China India Brazil
% y-o-y (monthly)
Consumer price indices
5.9
2.5
-10
0
10
20
6.5
9.8
O J A J O J A J O J A J O J A J O J A J O J A J O J A J
Russia China India Brazil
SOURCE: National statistics web sites; press; McKinsey's Global Economics Intelligence analysis
Producer price indices
% y-o-y (monthly)
D. Prices emerging economies
January 2014
22
Inflation remained at relatively high levels in emerging economies, except in China
2009 2010 2011 2008 2007 2012 2013
2009 2010 2011 2008 2007 2012 2013
40
60
80
100
120
140
160
180
200
220
240
260
280
300
Precious
metals
Energy
Livestock
Agriculture
Industrial
metals
2008 2007 2014 2010 2011 2012 2013 2009
1 Updated through January 17
th
; commodity data are taken from the GS Commodities Index, with components weighted by production. Precious metals:
gold 83%, silver 17%. Energy: crude oil 70%, oil products 25%, natural gas 4%. Agriculture: corn 28%, wheat 25%, soybeans 15%, sugar 14%, other
19%. Livestock: cattle 66%, hogs 34%. Industrial metals: copper 46%, aluminum 31%, other 23%.
Commodities indices
1
Monthly, indexed to Jan 2007
D. Prices commodities
January 2014
23
Precious metal prices rose significantly in early January 2014
McKinsey & Company | SOURCE: Haver Analytics; World Gold Council; McKinsey's Global Economics Intelligence analysis
over the last 2 weeks
Gold spot price
1
Absolute, USD per troy ounce (weekly)
1,252
2012 2013 2009 2010 2011 2008
0
1,000
1,500
2,000
2007 2014
1 Updated through 17th January 2014
1,170
1,200
1,230
1,260
27 31 3 7 9 13 15 17
Dec 2013 Jan 2014
D. Prices commodities gold
January 2014
24
Gold prices rallied and gained ~5% in the first two weeks of 2014, even as the demand for gold
fell by more than 50% in Q3 2013
1 Crude Brent, Henry Hub (Nymex). 2 Henry Hub Natural Gas Spot Price. 3 New York Harbor No. 2 Heating Oil Price. 4 Australian coal: McCloskey
Newcastle 6700 kc GAD fob Steam Coal Spot Price; South African coal: Richards Bay 6000 kc NAR fob Steam Coal Spot Price; Chinese domestic
coal: McCloskey/Xinhua Infolink's Steam Coal Price; American coal: Central Appalachian (CAPP) Coal Futures. 5 Oil and natural gas prices as of
January 17th; heating oil prices as of January 20th,coal prices as of January 17th
USD/barrel
USD/MMbtu USD/Mt
U.S. cents/gallon
Oil price
1
Heating oil prices
3
Natural gas price
2
Global Coal RB Index
4
94.4
108.4
140
120
100
80
60
0
0
2009 2008 2012 2013 2011 2006 2007 2010 2014
306.4
0
100
200
300
400
4.40
0
5
10
15
2006 2010 2007 2011 2012 2009 2013 2014 2008
85.6
0
50
100
150
200
2006 2007 2008 2009 2010 2011 2012 2014 2013
WTI Brent
SOURCE: Haver Analytics; EIA; McKinsey's Global Economics Intelligence analysis
D. Prices commodities energy
January 2014
25
Brent prices retreated slightly in January 2014 but remained high because of the outlook for
greater oil demand this year
USD/Mt USD/Mt
Copper
1
Steel
2
Aluminum
1
Nickel
3
3.38
0
1
2
3
4
5
2011 2012 2013 2014 2007 2006 2009 2008 2010
1,560
0
1,000
2,000
3,000
4,000
5,000
2006 2009 2007 2008 2013 2010 2012 2011 2014
14,593
0
10,000
20,000
30,000
40,000
50,000
60,000
2010 2006 2012 2008 2011 2013 2009 2014 2007
1,752
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010 2011 2012 2013 2014
1 Copper, High Grade: COMEX Spot Price (USD/lb). 2 Stainless Steel Scrap (USD/gross tonne) 3 U.K.: LME Nickel: Closing Cash Price (USD/Mt);
updated through January 17
th
, 2014
D. Prices commodities industrial metals
January 2014
26
Industrial metal prices were elevated at the start of 2014
50
100
150
200
250
-13%
2013 2012 2011 2010 2009 2008 2007
300
200
100
2013 2012 2011 2010 2009 2008 2007
Sugar Food oils Cereals Dairy Meat
SOURCE: Food and Agriculture Organization of the United Nations; McKinsey's Global Economics Intelligence analysis
1 The values of the 5 indices are compiled and then weighted by the average export shares of each group in 200204. The final figure represents the
current value of the FAO Food Price Index.
FAO Monthly Real Food Price Index
Overall index
Index level
Component indices
1
D. Prices commodities food
January 2014
27
Overall food prices slightly increased in December, driven mainly by higher dairy prices
Implied inflationary expectations from 5- and 10-year TIPS yields
1
(spread between T-bill and TIPS of same maturity)
% (monthly)
2.2
2.0
-1.5
-1.0
-0.5
0
0.5
1.0
1.5
2.0
2.5
3.0
2007 10 11 2013 2012 09 08
5-year TIPS spread 10-year TIPS spread
1 Updated through 4th January 2014.
D. Prices: volatility and inflation expectations in the U.S.
January 2014
28
Inflationary expectations remained stable in December; inflation on the 5-and 10-year TIPS
notes were unchanged from the previous month
McKinsey & Company | SOURCE: Haver Analytics; BIS; McKinsey's Global Economics Intelligence analysis
Note: Data updated till January 27th 2014, except USD NEER data which are for December 2013
1 STD= Standard Deviation
D. Prices: Currency
January 2014
Emerging market currencies slid against the USD as the Fed started tapering
Emerging market currencies tumbled against the USD as investors sold their holdings, driven by worries that the Fed might
continue its QE tapering in February with another USD 10 billion reduction
The Russian ruble declined the most, as domestic economic struggles are amplified by the external environment, dragging
the ruble to a record low against the euro
The Indian rupee remains the worst underperforming currency, depreciating by 33.6 % compared to 2007 levels
Relative change in currency value vs. previous month
(USD as base)
Relative change in currency value vs. 2007 level
(USD as a base)
Base currency
Currency ranking
USD
JPY
EUR
GBP
AUD
INR
CNY
BRL
RUB
USD NEER
O
u
t
p
e
r
f
o
r
m
i
n
g
U
n
d
e
r
p
e
r
f
o
r
m
i
n
g
(2.55%)
(2.55%)
(2.36%)
(3.5%)
(2.3%)
(0.42%)
(3.72%)
(2.93%)
(1.6%)
(STD
1
)
104.28 (JPY per USD)
1.37 (USD per EUR)
1.65 (USD per GBP)
1.12 (USD per AUD)
61.2 (INR per USD)
6.1 (CNY per USD)
2.37 (BRL per USD)
33.56 (RUB per USD)
100.22 Index
Currency prices
-0.79%
-0.68%
+0.42%
-1.04%
-0.24%
-0.49%
-1.01%
-2.01%
+.018
% chg
+5.96%
-33.63%
-0.68%
+12.83%
-1.78
-18.2%
-17.8%
+24.6%
-23.83%
Base currency
Currency ranking
USD
AUD
INR
EUR
JPY
USD NEER
BRL
GBP
CNY
RUB
O
u
t
p
e
r
f
o
r
m
i
n
g
U
n
d
e
r
p
e
r
f
o
r
m
i
n
g
% chg
29
Contents
II
Global pulse
I
D. Prices
E. Labor markets
30
0
2
4
6
8
10
12
2011 2008 2009 2007 2013 2012
Eurozone
2010
US
India
1
China
1
Russia
Brazil
SOURCE: Eurostat; BLS; EIU; IBGE; NBS; Havers; McKinsey's Global Economics Intelligence analysis
1 Data for India and China are annual and shown as a smoothed trend line. 2 No new updates for Russia unemployment
Unemployment rate
% of labor force (monthly)
E. Labor markets unemployment
January 2014
31
Seasonal factors drove Brazils unemployment rate down; in the U.S. the rate fell but job
creation was weak; Russias jobless ratio declined slightly while flat in the Eurozone
Contents
II
Global pulse
I
D. Prices
E. Labor markets
32
Equity markets
1
20
40
60
80
100
120
140
160
180
200
220
240
260
280
300
2012 2011 2014 2010 2007 2009 2008 2013
France
Brazil
India
U.K.
U.S.
Russia
China
Germany
1 India: BSE Sensex-30; Brazil: Bovespa; Russia: RTSI Index; China: SSE Composite Index; Germany: DAX; U.K.: FTSE 100; U.S.: S&P 500; France:
CAC 40. Updated through 20 January 2014.
F. Financial markets global equity
January 2014
33
Equity markets in advanced economies grew in December and hit new record high in the U.S.;
in the first half of January performance was mixed, but indices rose in Europe
10-year government bonds
% (weekly)
1
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
2013 2008 2009 2007 2014 2010 2011 2012
Italy
Spain
Germany
China
India
Brazil
U.S.
1 Updated through 20 January 2013
F. Financial markets fixed income (sovereign bonds)
January 2014
34
10-year bond yields for the U.S. and Germany went up in December 2013 following the Feds
announcement about QE tapering, but fell in early January 2014
Contents
II
Global pulse
I
D. Prices
E. Labor markets
35
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
J A J O J A J O J A J O J A J O J A J O J A J O J A O J
EU: ECB interest rate U.S.: Fed funds rate
India: Repo rate Brazil: Selic rate
Russia: CBR refinancing rate
China
2007 2008 2009 2010 2011 2012
SOURCE: European Central Bank; RBI; CBR; BCB; New York Fed; McKinsey's Global Economics Intelligence analysis
Central bank interest rates
% (monthly)
2013
36
G. Government and policy central bank interest rates
January 2014
The Fed held its first FOMC meeting of this year in Jan 28-29 the committee decided to make a
further measured reduction in the pace of its asset purchases in February
Contents
II
Global pulse
I
37
Emerging markets OECD CLI Advanced economies OECD CLI
1
105
110
100
95
90
Russia
Brazil
India
China
90
95
100
105
110
U.S.
Japan
U.K.
Euro-
zone
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2012
2012
SOURCE: OECD; McKinsey's Global Economics Intelligence analysis
1 Composite leading indicators (CLIs) attempt to identify turning points in economic activity approximately 6 months in advance. The horizontal line at
100 shows the long-term trend in industrial production (the reference series). An increase above 100 indicates expansion; a decrease but still above
100 indicates a downturn; a decrease below 100 indicates a slowdown; and an increase below 100 indicates a recovery.
2013
2013
38
Monthly, index Monthly, index
II. Global Pulse Organisation for Economic Co-operation and Development (OECD) Composite Leading Indicator
January 2014
The OECD CLIs point to a tentative positive change in momentum in China, and to growth in
Russia, but remain below trend for Brazil and India
SOURCE: International Monetary Fund; OECD; World Bank; McKinsey's Global Economics Intelligence analysis
GDP growth 201315 (percent)
1 Purchasing power parity weights 2 Fiscal year basis, estimate 3 forecast date November 2013 4 Forecast date December 2013
5 Forecast date January 2014
3.6
3.2
3.7
IMF
5
World Bank
4
OECD
3
2.9
2.8
2.8
1.0
1.1
1.0
2.2
2.4
2.3
2.3
2.2
2.0
4.7
6.2
5.4
8.2
7.7
7.5
3.9
3.4
3.9
3.4
2.9
3.0
1.6
1.4
1.4
2.5
2.7
2.8
2.9
2.7
2.5
5.7
6.6
6.4
7.5
8.0
7.5
3.0
2014 2015 2013
1.9
-0.6
2.3
1.5
4.4
7.7
IMF and World Bank raise 2014 growth forecasts while OECD revises its projections
downwards, citing weakness in emerging economies
II. Global Pulse GDP growth forecasts
January 2014
U.S.
Euro Area
Brazil
Russia
India
2
China
World
1
39
SOURCE: International Monetary Fund; McKinsey's Global Economics Intelligence analysis
U.S.
Euro Area
Brazil
Russia
India
China
World
The IMFs latest report indicates that
the economic activity is expected to
improve in 2014-15, mainly because
of the recovery in advanced
economies, but downside risks
remain:
Global growth in H2 2013 was
stronger than anticipated, mainly
due to higher inventory demand.
Prospects for global growth in
2014-15 have improved, mainly on
the back of recovery in DNs
1
,
while EMs
2
will benefit from the
stronger external demand. In other
economies, structural reforms or
managing vulnerabilities may help
improve the economic situation
Downside risks in the form of low
inflation in DNs
1
, rising risks to
financial stability and financial and
capital market volatilities in EMs
2
remain
3.6
3.7
3.9
3.9
2.6
2.8
0.9
1.0
2.5
2.3
7.2
7.5
3.2
3.0
1.3
1.4
7.1
7.3
5.2
5.4
6.3
6.4
3.2
2.8
3.5
2.5
3.0
2.0
2014 2015
IMF signals revival of global growth, supported by recovery in advanced economies
II. Global Pulse IMF growth forecast April 2013
January 2014
GDP growth (percent) Date of forecast:
Oct-13 Jan-14
1 DN- Developed Nations 2 EM- Emerging Markets
40
Global scenarios for the next decade: 2013-23 (1/2)
Mar
32%
Mar
15%
Mar
12%
Mar
11%
Total respondents = 1,499
% response on likelihood
Executive sentiment is increasingly divided on possible outcomes
SOURCE: McKinsey's Global Economics Intelligence analysis; McKinsey Global Executive Survey Results,
December 2013
Jun
15%
Jun
17%
Jun
27%
Jun
13%
Sep
19%
Sep
22%
Sep
19%
Sep
11%
Dec
17%
Dec
19%
Dec
20%
Dec
11%
Dec-Sep
-2%
Dec-Sep
-3%
Dec-Sep
+1%
Dec-Sep
0%
41
Global scenarios for the next decade: 2013-23 (2/2)
Mar
19%
and we have added two new scenarios between these broad outcomes
Jun
17%
Sep
20%
Dec
23%
Mar
9%
Jun
11%
Sep
9%
Dec
11%
Dec-Sep
+2%
Dec-Sep
+3%
42
SOURCE: McKinsey's Global Economics Intelligence analysis; McKinsey Global Executive Survey Results,
December 2013

McKinsey Global Economic Intelligence Report - January 2014

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

McKinsey Global Economic Intelligence Report - January 2014

Încărcat de

Drepturi de autor:

Formate disponibile

CONFIDENTIAL

S-ar putea să vă placă și