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The paradox of inclusive inequality

The now popular narrative of ever-widening inequality is only telling half of the story. It neglects the huge strides made towards better participation from a global perspective as well as the improvements within many developing countries. 1.1 billion people form the global wealth middle class today, and global concentration of wealth fell below 80%.

Where the smart savers live

Savers in the eurozone are caught between a rock and a hard place: zero interest rates and rising inflation. Hence, investment strategy matters. The implicit return on households’ financial assets – referring to the total sum of gains in value and investment income in relation to portfolios – is an intriguing gauge to visualize the striking differences in saving behaviors between eurozone countries. Some prefer safety and, as a consequence, have to work hard to increase their wealth; others accept higher risks – and see the markets do the heavy-lifting for them. Our visual guide shows what separates smart savers form the hard savers and where they live.

Global Economic Outlook 2019

2018 saw strong growth while leading to a maximum of uncertainty. World growth in 2018 reached again a high level of +3.1%. Yet it nurtured uncertainties on the possibility of a trade war, non-viable US and European fiscal policies, the Fed’s too high assertiveness, emerging markets’ resilience, the multiplication of political risks and a potential burst of the global credit bubble. 2019 will be a denouement year on all these thorny issues. It should lead to a soft landing of the world economy.

Germany: Economic stuttering but no slump ahead

At 1.5%, the German economy last year recorded its weakest GDP growth since 2013. Calendar-adjusted GDP growth also expanded by 1.5% following a whopping 2.5% in the previous year. 

The View: Global Insolvencies Outlook

We see business insolvencies to rise for the third consecutive year in 2019 (+6%). The softening economic momentum, coupled by the global tightening of financing conditions, will drive up insolvencies in a majority of countries. 

Financial assets: Weakest growth in seven years

The financial assets of German households – despite significant losses in the last quarter – will remain above the 6 trillion mark in 2018, but only just: by the end of the year they should be around EUR 6,010 bn.

Eurozone Bond Proposals Overview

Since the start of the Euro-crisis in the aftermath of the Great Recession, policy makers and economists alike have put a variety of proposals for eurozone reform on the table. Facing refinancing problems, the doom loop between banks and sovereigns as well as a lack of fiscal discipline, particular attention has been paid to new types of government bonds. 

Global Economic Outlook update (Q4 2018)

Global growth to remain on a healthy trajectory despite the multiplication of risks:

Self-correcting mechanisms: US fiscal and monetary fuses to preserve  the economic circuit from systemic unsustainability

Fine-tuning policy tools: Fueling demand in the short-term and repairing supply in the medium-term will be the leitmotiv of China and Europe

Technical inspection: The market will continue to differentiate defective emerging economies from sound ones

Germany: Economic cycle risk politics

The sentiment in the German economy continued to deteriorate in December. The ifo business climate index fell to its lowest level for more than two years. 

ECB Preview: Starting Shot for the Great Unwind

Whereas 2018 will be known as the year when the ECB reached the end of its monetary easing path – with the cessation of QE net purchases under which the ECB accumulated a bond portfolio worth €2.6 trillion over the course of close to four years – 2019 will mark the beginning of monetary tightening.