Depuis quelques semaines, certains économistes pointent des signaux d’un retournement possible du cycle économique mondial. La semaine écoulée a été marquée par plusieurs publications de statistiques qui confirment cela. Mais prudence, il ne s’agit sans doute pas d’une embellie massive et rapide, au regard des défis structurels (désendettement des Etats et des ménages) qui demeurent dans plusieurs grandes économies.
Voici un commentaire intéressant de Barclays sur la semaine écoulée (signé Piero Ghezi). On lira en particulier l’analyse de la situation de la zone euro (fin de texte) depuis la révision des multiplicateurs budgétaires par le FMI, qui place l’économie de la zone dans une situation particulièrement délicate.
« On balance, this week’s economic releases have been stronger than expected, appearing to confirm the view that that global economic activity may be picking up, albeit modestly.
Perhaps the biggest surprise was in the UK, where q/q growth in Q3 (1%) was not only positive for the first time in three quarters but also significantly above consensus and our own expectations. The potential underlying growth momentum and the increased uneasiness of some MPC members about further QE makes us think that UK QE may now be off the table.
In China, this week’s better-than-expected October flash PMI and September data paint a consistent picture of a likely further pickup in activity on the back of accommodative policy, infrastructure investment, recovering property prices and improving external demand. We see upside risk to our baseline, though a strong rebound in Q4 12 appears unlikely.
The US economy is at a crossroads. Business demand is weaker but consumer demand has rebounded, particularly housing starts and retail sales. Better consumer demand and signs of a bottom in activity (Q3 GDP and September’s ISM indexes) suggest a modestly upbeat Q4.
This weeks’ FOMC meeting did not bring much other than an assessment that household spending has advanced a bit more quickly than expected. Our baseline outlook remains for the Fed to convert its current $45bn per month in purchases of long-term Treasuries under Operation Twist to an open-ended purchase program after year-end.
Unsurprisingly, the euro area underperformed. The euro area October “flash” PMIs reached a new cyclical low, suggesting that GDP is likely to contract until year-end. Likewise, data from Germany confirmed that the downward trend in the IFO business climate remains unbroken, adding downside risk to our forecast of flat Q4 GDP growth. It is unlikely that domestic demand will support the economy sufficiently to offset a depressed external environment.
The European underperformance may be largely related to fiscal headwinds. One relevant and relatively recent global development has been the increased acceptance that the fiscal multipliers are larger than previously thought.
Before the crisis, it was assumed that the size of the fiscal multiplier was around 0.5 or even less, the idea being that even if the direct impact of additional fiscal spending were to boost economic activity, this would be partly (or even fully) offset by two indirect effects. First, and most important, monetary policy would, in normal circumstances, be tightened to limit the expansionary effects of the fiscal stimulus. Second, expectations of future tax increases to compensate for the higher spending could reduce current consumption.
But these are not normal circumstances in monetary policy terms. The G4 economies have policy rates at or near zero and are facing what economists call the “liquidity trap.” Even if fiscal spending increases, monetary authorities are unlikely to tighten policy as economic growth is still far from desired levels. Hence, the effect of the expansionary fiscal policy would be very powerful.
The logic also works for spending cuts. With nominal interest rates facing the zero bound and G4 central banks running the easiest monetary policy that they think they can, it would be very difficult to ease by more than has already been done/announced.
The theory seems to be supported by the facts. Using a sample of 28 advanced economies, a recent IMF document finds a fiscal multiplier of 0.9-1.7 for recent years. There have been concerns about the effect of outliers on their results, but this is consistent with previous work by De Long and Summers and by Almunia et al, who suggest an average multiplier of 1.6 based on evidence from the 1930s (the last time interest rates were at or near zero).
The large fiscal multipliers put the euro area, and particularly the periphery, between a rock and a hard place. The market has been slightly ambivalent when it comes to euro area adjustment. It has been disappointed when growth numbers are weak, yet weak growth is precisely the result of tighter fiscal policy. Indeed, because of their larger indirect impact on tax revenues, the fiscal adjustments required to achieve a certain budget target are becoming very sizable. »