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RCEP: Common rule of origin could boost regional trade by around USD90bn annually

EU Carbon Border Adjustments and developing country exports: Saving the worst for the last

The introduction of the EU carbon border adjustment mechanism (CBAM) will come with a high cost for developing economies, particularly African trade partners and the Arab states of the Persian Gulf, which will face the highest ‘carbon tariffs’. 

Emerging Europe: The balance of risks is tilted to the downside

Economic activity in the Emerging Europe region rebounded markedly in Q3 2020, but new lockdowns will send the region into a double-dip recession in Q4. 

Zero interest rates: Redistribution through the backdoor

With the Covid-19 crisis, zero interest rates will become entrenched in Europe for the time being. Besides the (negative) long-term effects – rising inequality, distorted financial markets and misallocation of resources – there are also direct income effects. 

Emerging Markets: Heading for a China-less recovery

China played a crucial role in the global economic recovery after the 2008-09 financial crisis, but the post Covid-19 recovery will be different: We expect China to slow its international engagement over the next few years. 

Joe Biden´s victory: Reconciliation economics

Joe Biden won the U.S. Presidential election, thanks to slim victories in major swing states. However, without a clear Congressional majority, he will not have as much leeway as expected, even if executive orders, his long experience in negotiating bipartisan agreements and Republicans’ fatigue with partisanship could play a positive role.

The U.S. Elections turn into a judiciary battle: What's next

As of 06 November, Joe Biden appears to have the higher chance of becoming the next U.S. President, with the Senate possibly remaining in the hands of the Republicans. We expect President Trump to use every possible means to contest the election results if they appear to be against him. A judiciary battle could last until 08 December, potentially requiring the intervention of the Supreme Court.

The Eurozone recovery after ‘lockdown light’

Lockdown 2.0 or ‘lockdown light’ in Europe embodies the stop-and-go strategy, which should follow epidemic cycles until a post-vaccine return to normal in 2022. Yet these new restrictions are not a replay of Spring 2020 as their economic hit to Q4 2020 GDP should prove 30-60% less severe. 

Consumers and climate policy

For the EU to reach its target of climate neutrality by 2050, they will have to change their behavior, but our research shows on average 46% of French and 44% of Germans respondents are not prepared to pay more for climate-friendly products. 

Dual circulation: China’s way of reshoring?

Over the long run, the Chinese economy is facing two key challenges: declining potential growth and a deteriorating external environment. Our growth potential model suggests China’s GDP growth is likely to average between +3.8% and +4.9% over the coming decade (after +7.6% in the 2010s), due to declining labor supply and slowing productivity and capital investment.