Schroders Economic Infographic April 2015
The road following low interest rates
To date, 21 central banks
have cut policy rates
Despite 6 years of zero rates,
global growth remains slow
Forecast update
Global liquidity continues to weigh
on longer-term interest rates
Federal Open Market Committee
met mid March 2015
Changed its language from patient to more
cautious and opened the door to a June move:
REASONS FOR
PESSIMISM
Slow down in business
investment in major economies
(US, Germany and Japan)
Eurozone upswing too late to
prevent deflation. Banks and
households reluctant to increase
borrowing due to crisis legacy
Concerns that China needs to
recapitalise its banking
system
World economy in a period of
balance sheet adjustment
as countries recover at different
rates post-crisis
Eurozone seeing signs of a
return to lending after 2014 Asset
Quality Review and stress tests
US & UK recapitalised their
banks at an early stage of the
financial crisis
REASONS FOR
OPTIMISM
CUT FORECASTS for
Are exports emerging?
Despite a recovery in trade growth
in developed markets, emerging
market exports are failing to
follow suit
Commodity exporters
hurt by price collapse
Ongoing euro & yen
weakness
has worked against
Emerging Market
competitiveness
%
GROWTH
INFLATION
INTEREST
RATES
weaker demand,
excessive supply
export
underperformance
WAITING FOR A CATALYST
• Metal and oil dependent Latin American economies have no likely saviour
• Revival of eurozone growth and continued US labour market strength should translate into
gains for exporters of manufactured goods in Asia and Europe
• The developed market & emerging market relationship is weakened but not broken
1st
Schroders’ forecast:
first US rate rise
September 2015
Source of data: Schroders
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