Capital Economics

As we approach 2025, we've identified the key risks that could go wrong (and right) with our core views on the global macro and market outlook. While some events remain unforeseeable – think the pandemic – there are several conventional risks worth keeping on your radar. Read the full analysis by our Group Chief Economist Neil Shearing: https://lnkd.in/e9q-AiJh #macrorisks #marketrisks #globaleconomy

Can China overcome its structural headwinds and US trade tariffs? With 60% tariffs on its exports to the US possible and growth slowing otherwise, the Chinese economy is under pressure. Will fiscal stimulus be enough to overcome long-term challenges? Watch our on-demand briefing to learn more: https://lnkd.in/e679se8j #ChinaEconomy #USChinaTrade #GlobalMarkets

Will Europe’s political instability derail its economic recovery in 2025? With sluggish growth, structural challenges, and fiscal concerns in major economies like France and Italy, Europe faces uncertain times. Watch the on-demand event to learn more: https://lnkd.in/gXX6TvyP #europeaneconomy #world2025

Is your investment strategy ready for Trump’s return? Our consultancy team partners with investors and businesses worldwide to help them mitigate risk and unlock opportunities. As Donald Trump prepares to return to government, we’re helping them understand what his campaign pledges could mean for their strategies. Find out how we can help you with yours: https://lnkd.in/gMJj2wnN #investment #trumppolicies #consultancy

The precarious nature of the outlook for the Federal budget deficit is well appreciated at this stage, but what if the bigger crisis risk is the mounting current account deficit? The current account deficit widened to $310.9bn, or 4.2% of GDP, in the third quarter, up from 3.7% of GDP in the second. Admittedly, the deficit briefly hit 4.6% of GDP in early 2022, when easing supply shortages resulted in a brief surge in imports. But otherwise that is the biggest deficit recorded since the financial crisis. The deficit previously peaked at 6.3% of GDP in 2006, when US household savings rates fell close to zero during the housing boom. One new element of the story is that the US can no longer rely on generating a primary income surplus to help keep the deficit in check. Despite running a negative net international investment position for many years, the US had always managed to generate a positive net return on the relatively smaller portfolio of US-owned assets abroad, when compared with the bigger portfolio of foreign-owned assets in the US. That’s partly because the former included tax-dodging direct investments that appeared to generate outsized profits in low-tax countries, principally Ireland, and also because the latter portfolio consisted mainly of lower-yielding safe assets like Treasury bonds. No more, however. Following revisions, the data now show that the primary income balance shifted to a deficit in the second quarter, and hit -$15.5bn, or -0.2% of GDP, in the third quarter. With the net international investment position ballooning out to 77% of GDP in the second quarter, this shift was inevitable. Back in 2006, net international liabilities were less than 15% of GDP. The upshot is that we should be worried about the twin government and external deficits, since both present a long-term risk of developing into a full-blown debt/currency crisis. As Blanche DuBois knew, you can't rely on the kindness of strangers forever. #dollar #deficit #macro #economics

How will the incoming US administration impact global markets in 2025? Donald Trump’s return could ripple through growth and inflation variables, and key sectors worldwide. Watch our on-demand event to learn what the next presidency means for the global economy and markets: https://lnkd.in/ewsdH3yV #GlobalEconomy #USPolicy #EconomicTrends

We are so proud of our team for their incredible generosity this holiday season! We participated in the KidsOut Giving Tree campaign to bring joy to children in need. Thanks to everyone who contributed by purchasing physical gifts as well as the many gifts that were donated through the The Fun and Happiness Online Shop. We believe in giving back to our community and are grateful to have such a caring team. #GivingTuesday #HolidaySpirit #CommunityImpact #KidsOut

Not every prediction we made in 2024 went our way, but those that did cover the full spectrum of macro and markets. They captured receding inflation, US economic outperformance, and US equities again leading the pack. Explore a selection of our correct calls from the past year: https://lnkd.in/esvJk6XM #macroinsights #macroeconomicinsight

From US policy shifts under a second Trump administration to European political risks and China’s economic headwinds, we outline the top five trends for investors to watch in 2025. Read our latest blog post: https://lnkd.in/efVHP5XT #macrotrends2025 #trends2025

In our latest client briefing, Vicky Redwood, Senior Economic Advisor, explains why US tariffs won’t correct trade imbalances and can instead hurt domestic firms through higher input costs and inefficiencies, potentially reducing overall competitiveness. Watch the recording now to understand the potential impacts when the president-elect takes office in January. https://lnkd.in/et3Pd8aM #ustariffs #tariffs