Bolsonaro's Brazil - What does it mean for corporates?

On Sunday October 28 th, Brazil traded a step back in time for a leap of faith into the unknown. The people ditched another workers’ party (PT) presidency and elected Jair Bolsonaro. The business community embraced the sheen of a self-designated ultraliberal over the nostalgia of a left-wing statist.

The View

A cyclone is brewing in the global economy. The US – with its erratic policy-making causing major shocks of uncertainty – is in the eye of the storm, sending headwinds toward the rest of the world. While China, Japan and the Eurozone are in the stable vortex of the cyclone, able to absorb the shocks, emerging markets are in the unstable vortex, leaving them in a vulnerable position. Nevertheless, we predict the global economy can weather this storm, with world GDP growth expected to remain resilient in 2018 and 2019.

Allianz Global Wealth Report 2018

Financial assets of households rose by a significant 7.7% to EUR 168 trillion in 2017, supported by synchronized economic recovery and strong financial markets according to the ninth edition of the ‘Allianz Global Wealth Report’. However, first data for 2018 suggests a much reduced growth. The report puts the asset and debt situation of households in more than 50 countries under the microscope.

Global Automotive Report

The automotive market is set to grow by +3.0% in 2018 compared to +3.1% in 2017 and to slow down to +1.9% in 2019, with new vehicle registrations expected to exceed 100mn units in 2019, worldwide.

The Sequel

After a successful first year of long-awaited reforms, French corporates remain indebted and households lack purchasing power. The Government just published their 2019 budget proposal and economic policy objectives are clear.

Without crying wolf - mind them

At a global level, companies’ leverage decreased by -3.2pp in 2017 to 53%. Paper, transportation and textile are the riskiest sectors due to structural changes.

Financing on the A-List

Africa’s attractiveness is strong since the continent’s growth is driven by capital intensive needs, particularly infrastructure. Therefore financing (both levels and sources) is among the key questions that need to be answered in order to properly channel funds to the right projects. The continent can make it work through a mix of formal solutions (FDI, fiscal resources) and innovative ones (mobile banking).

Growing out of sync

The global economy is expected to continue to grow at a healthy pace
in 2018 and 2019 albeit mirroring more diversity in an asymmetric reaction
to a series of shocks on energy prices, political uncertainty and interest
rates

Global Economic Outlook Q2 2018

Economic Research presents its Q2 2018 Global Economic Outlook and regional updates (North America, Latin America, Asia, Africa, Eastern and Western Europe)