OECD lifts global growth forecast. The Organization for Economic Cooperation and Development (OECD) has lifted its 2021 global growth forecast to 5.6 percent. The deployment of coronavirus vaccines and a massive US stimulus programme have greatly improved the world's economic prospects. The latest figure, which was released on Tuesday, is an increase of 1.4 percentage points from the OECD’s December forecast, and welcome news for the world economy which plunged into recession last year, when governments introduced restrictions to curb the coronavirus pandemic. However, "despite the improved global outlook, output and incomes in many countries will remain below the level expected prior to the pandemic at the end of 2022," the OECD warned.
US consumer prices increased solidly in February as the cost of gasoline rose further, leading to the biggest annual gain in a year, but underlying inflation remained subdued amid weak demand for services such as airline travel. The US Labour Department said on Wednesday that its consumer price index (CPI) increased by 0.4 percent last month after rising 0.3 percent in January. In the 12 months ending February, the CPI gained 1.7 percent, the largest rise since February 2020, after climbing 1.4 percent in the 12 months ending January. Last month’s rise was in line with economists’ expectations. Excluding volatile food and energy prices, core consumer prices notched up by 0.1 percent in February after coming in unchanged for two months in a row. Economists had expected core prices to go up by 0.2 percent.
Eurozone economy shrinks in the fourth quarter. The eurozone economy shrank at a faster rate than initially estimated in the fourth quarter of 2020, revised data from Eurostat showed on Tuesday. Gross domestic product fell by 0.7 percent sequentially instead of 0.6 percent estimated on February 16. The fall comes on the heels of a record 12.5 percent rebound seen in the third quarter. On an annual basis, GDP was down by 4.9 percent, more than the 4.2 percent decline in the third quarter but better than the 5.0 percent drop estimated on February 16. In the whole of 2020, GDP was down by 6.6 percent versus the prior estimate of -6.8 percent and +1.3 percent registered in 2019. Ongoing restrictions mean that another fall in GDP is likely in the first quarter, while the slow vaccine rollout points to the best of the recovery being delayed into third quarter, Jessica Hinds, an economist at Capital Economics, said.
China’s producer inflation kindles fear of increased global inflation. China’s producer prices rose at the fastest rate in more than two years in February, as more expensive oil, computer chip shortages and soaring shipping costs acted as tailwinds for inflationary pressures. The Chinese producer price index rose 1.7 percent from a year earlier, official data showed on Wednesday, stronger than economists’ forecasts for a 1.5 percent increase and up from 0.3 percent in January. On the other hand, consumer prices fell by 0.2 percent last month from a year earlier, slightly better than a 0.3 percent decline predicted by economists. Resurgent producer prices in China raise the prospect China will start exporting inflation globally as factories hike prices for goods sold abroad.
Australia consumer confidence up in March. Consumer confidence in Australia picked up steam in March as the latest survey from Westpac Bank rose 2.6 percent to a score of 111.8, following a 1.9 percent gain in February. Australia's success in containing the coronavirus pandemic, the vaccine rollouts, and support from stimulatory government policies have all contributed to the sustained lift. All components of the index were higher in March. Confidence around the economic outlook led the gains with the 'economy, next 12 months' sub-index was up by 3.7 percent and the 'economy, next 5 years' sub-index up by 2.3 percent.