15 februari 2012
Global overview

Positive sentiment and rising prices for risk assets at the beginning of the year – many EM equities post double-digit percentage gains. ECB is pumping liquidity into the financial system in unprecedented quantities. Crisis with Iran is escalating, but is being broadly ignored by the financial markets at the moment.

China

The latest economic indicators in China are once again pointing to a “soft landing” for the country’s economy. With regard to the coming quarters, this means a further slowdown in growth towards 7 %, with the real estate and export sectors functioning as the main sources of this deceleration. The Chinese government is probably thus very keen to maintain the growth rate in the 8 % range, whilst at the same time continuing to cool off the real estate sector somewhat. Fundamentally speaking, no major economic policy reforms are expected in 2012, as a change of government will be taking place at the end of the year.

Russia

Leading indicators in Russia continue to point to deceleration in economic activity, in particular in relation to industrial production, whereas private consumption is still looking very robust, bolstered by higher real incomes and low unemployment. The inflation path is remarkable, as the rate of price increases dropped to 6 %, marking the lowest level since the end of the Soviet Union. Moreover, it is possible that inflation will drop to just over 4 % in the near future. At the same time, this development is partially due to the government postponing increases in energy prices.