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Posts Tagged ‘RGE Monitor’

What Is Fueling the Ecommerce Boom in China?

Posted by hkarner - 19. Februar 2017

By on February 13, 2017  RGE EconoMonitor

China, with its staggering population of over 1.4 billion, has more internet users than any other country in the world. More internet users translates into more ecommerce shoppers, making China the largest and fastest-growing ecommerce market in the world.

With $630 billion in sales in 2015, China’s ecommerce market dwarfs all others, being almost 80% larger than the United States.

In fact, ecommerce accounts for 13.5% of total Chinese retail spending, which is the highest percentage of any large economy except for the United Kingdom. Clearly China is experiencing a massive boom in online shopping an ecommerce.

As Forbes.com reports:

The volume of online sales in China now exceeds that in the US, and online sales are expected to grow 20% annually by 2020. Furthermore, online shoppers represent the vanguard of China’s growth story, since they tend to be young, urban, and highly educated. They have a different attitude toward shopping than older generations, which were shaped as savers by more challenging political and economic circumstances. Younger shoppers are more willing to spend. Den Rest des Beitrags lesen »

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The Coming Italian or French Phases of Europe’s Economic Crisis

Posted by hkarner - 16. Februar 2017

By on February 13, 2017  RGE EconoMonitorDAS 2

While the near term focus is political, the French and Italian election, any new government will face a series of problems that cannot be easily resolved, even if there is the will to tackle the political and economically difficult issues.

The Unthinkable…

Defenders argue that Italy and France are large modern nations, with enviable economic pedigree. Italy and France are amongst the largest economies in the world.

Gross domestic product (“GDP”) per capita in 2015 is estimated at around US$35,000 and US$43,000. They have large populations, well-educated and productive workforce, well developed infrastructure as well as considerable economic and social capital. Both countries are major agricultural and industrial powers, strong in advanced technical products, luxury goods, food processing, pharmaceuticals and fashion. Both are major exporters and significant tourist destinations. France even has a favourable demographic outlook, with a birth rate just above replacement level mainly among its immigrant population. They are simply too large to fail. Den Rest des Beitrags lesen »

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Is Global Climate Change Good for Business?

Posted by hkarner - 2. Februar 2017

By on January 31, 2017  RGE EconoMonitor

Wind energyIn addition to increasing temperatures and rising sea levels, global climate change represents a complex exercise for the great majority of businesses, which must frame the meaning, the costs, and the business and investment opportunities associated with this ongoing phenomenon.

For a large number of companies, action on climate change is embedded in some version of a “sustainability” or “green business” program aimed at improving environmental and business performance. These initiatives are typically focused on mitigation, or the reduction of greenhouse-gas emissions, rather than on building climate resilience in the face of risks such as cyclonic winds, heat waves, flooding and storm surge, and drought. The most effective of these sustainability programs, by whatever name, manage to reduce emissions and lower the environmental footprint of companies and their supply chains, by using renewable energies such as solar and wind power, improved energy and water efficiency, recycling, and reducing waste of all types. Companies that use these programs are viewed as responsible environmental stewards, and at the same time, reap the benefits of process efficiency and lowering their costs, as illustrated in the 2013 book, Eco-Business: A Big-Brand Takeover of Sustainability. Den Rest des Beitrags lesen »

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Will Hyper-Digitization Drive The Next Industrial Revolution?

Posted by hkarner - 23. Januar 2017

By on January 18, 2017  RGE EconoMonitor

The next wave of smart technologies—from the Internet of Things and wearables to robotics, and artificial intelligence—will boost worker productivity, reinvent business, and add trillions of dollars to worldwide GDP growth. Research recently conducted by Roubini ThoughtLab and Cognizant’s Center for the Future of Work estimates that these smarter technologies will turbo-boost the digital revolution and rewrite the next chapter in the story of business – how companies generate revenue, control costs, engage customers, and manage work.

Our study, The Work Ahead, reveals that companies are rapidly moving from the initial phase of digital transformation, spurred by SMAC technologies (social, mobile, analytics, cloud), to a second phase of hyper-digitization. In this next phase, which will carry us into the next decade, businesses will harness these smarter, game-changing technologies to become hyper-digitalized organizations that will enjoy leaps in revenue growth, cost savings, productivity and worker engagement. Den Rest des Beitrags lesen »

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The Year Ahead: Where to Invest in 2017

Posted by hkarner - 16. Januar 2017

By on January 3, 2017  RGE EconoMonitor

The Year Ahead: Where to Invest in 2017

 Key takeaway – Across the globe, populism and protectionism are on the rise and macro fundamentals remain weak. In this challenging context, growth will remain subdued in 2017, hampered by sluggish investment and productivity, ever-accumulating savings and modest inflation. With the exception of the Unites States (US), developed markets (DMs) will stagnate, burdened by debt and structural rigidities. In the US, if Trump’s policies veer toward pragmatism, the economy will grow above trend, lifting financial markets, especially in the first part of the year. Emerging markets (EMs) will face low growth and risks of political volatility. At the global level, geopolitical tensions, financial instability and competitive devaluations remain key risks. Fiscal and monetary policies are unlikely to strengthen demand and investment; fiscal policy might turn expansionary only in the US. Monetary policies, unable to spur growth, will steadily diverge – with a mild tightening cycle in the US and easing in the Eurozone (EZ) and Japan. While traditional banks remain under pressure, asymmetric economic performance and diverging monetary policies will increase the risk of market dislocations. Unusual times call for unusual portfolios: investors should lower their return expectations, and increase exposure to alternatives. Den Rest des Beitrags lesen »

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The Rise of Anti-Establishment Italy

Posted by hkarner - 10. Dezember 2016

By on December 8, 2016  RGE EconoMonitorSteinbock

After the UK Brexit and the Trump triumph in the US, the rise of anti-establishment Italy is hardly a surprise. It is the effect of half a decade of failed austerity doctrines in Europe and decades of failed political consolidation in Italy – ever since the notorious Tangentopoli scandals.

While Italy’s constitutional referendum heralds a political earthquake that will eventually affect both France and Germany, the immediate result is more uncertainty in economy, political polarization and market volatility.

End of an era in Italy – and Europe

Only hours after Italians had casted their ballot in the referendum on constitutional reforms, Prime Minister Matteo Renzi announced his resignation after heavy defeat.

Renzi’s ‘Yes’ camp included most of his Democratic Party (DP) and centrist allies, and the tacit support of moderate voters, including some from Silvio Berlusconi’s Forward Italy (FI). In turn, the opposition lineup featured Beppe Grillo’s Five Star Movement (M5S), the regional Northern League (NL) led by Matteo Salvini in alliance with the far-right Brothers of italy’s (Fdl) and Berlusconi’s Forward Italy (FI), a significant minority of PD allies, a number of small leftist groups,

According to projections, almost 60% of voters rejected constitutional changes. “My government ends here,” said Renzi from Palazzo Chigi. Moments later, he acknowledged that his pledge to resign if defeated at the polls had been a mistake. Den Rest des Beitrags lesen »

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Italian Referendum: What to Expect?

Posted by hkarner - 3. Dezember 2016

by on December 2, 2016  RGE EconoMonitorpezzuto

So what went wrong?

Why did it happen?

Probably many analysts and economic commentators have concentrated their attention mainly on the media coverage “firepower” each candidate (USA presidential election) or supporters of the Yes/No vote (UK referendum) have been granted prior to the election or referendum, or on the astonishing financial contributions they received for their very aggressive political campaigns.

They have also probably expected that most people, faced with the perceived potential negative outcome of the election or referendum (at least from the perspective of most analysts and economists), and the high level uncertainty about the political consequences of a “Brexit” scenario or Donald Trump’s victory (i.e. more restrictions on immigrations policies, changes in the global trade policies, repeal of the Obamacare and Dodd-Franc Act’s, etc.), would have not dared to take a contrarian view or voting preference from the general propaganda of mainstream opinion leaders, political and leading financial institutions’ heavyweights, and elites. Den Rest des Beitrags lesen »

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Italy: Willingness to Reform Is the Issue, Not the Referendum

Posted by hkarner - 3. Dezember 2016

By on December 1, 2016  RGE EconoMonitor

Italy: Willingness to Reform Is the Issue, Not the Referendum

 Key takeaway – Italy’s prospects are lacklustre, growth is stagnant. Focused on privilege preservation, the political system fosters anti-establishment feelings. Reforms are needed but – due to a reluctant electorate and a cumbersome legislative process – are difficult to implement. Cognizant of the country’s challenges, over the past three years Renzi’s government announced many important reforms, but implemented few. According to Renzi, the ineffectiveness of the legislative process is the culprit; hence, tackling institutional paralysis is the key priority. On Sunday December 4, Italy will hold a constitutional referendum to streamline lawmaking. The ‘No’ camp, an heterogeneous coalition of political forces, questions both the substance and the process of the proposed reforms and is ahead in the opinion polls. The referendum is likely to be rejected by a narrow margin. Political, economic and market concerns of a ‘no’ vote are overblown. Yes, the political process would become more uncertain, the economy would keep stagnating and market volatility would temporarily rise. But in the short term nothing will change. To enhance the long term competitiveness of its economy, Italy needs a comprehensive modernization. In other words, passing laws is a necessary, but not sufficient condition. Government needs to show willingness to reform, and burn political capital in getting transformational laws through parliament.  

Growth is stagnant … The Italian economy is large and diversified[1]. Yet, growth is hampered by long-standing rigidities: a) demographics are unfavorable[2]; b) established power structures hinder meritocracy and risk taking; c) innovation is limited and total factor productivity (TFP) often negative[3]; d) labor laws are rigid and costly; e) wage growth is above productivity growth[4]; f) the public sector is inefficient, burdened by a sclerotic bureaucracy[5]; g) over-regulation, backdoor dealings, crony politics, corruption and organized crime hamper economic performance; h) the judicial system is slow[6]; i) at 132.7 percent of GDP, public debt is larger than ever[7], perhaps too big to rescue; l) taxes are high[8]. As a result, per capita GDP is stuck at the level of the late 1990s and growth is sluggish: over 2016-21, Italy’s economy is expected to grow at around 0.8-1 percent[9]. Den Rest des Beitrags lesen »

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Mr. Trump: Can You Deliver it?

Posted by hkarner - 18. November 2016

By and on November 15, 2016  RGE EconoMonitor

Mr. Trump: Can You Deliver it?

U.S. assets reacted in a see-saw fashion to Donald Trump’s victory. Stock futures first dove deeply before climbing up to strong gains as investors developed a view on what kind of economic policy president-elect Trump is likely to pursue. They seem to be pricing in an expectation of higher growth and inflation, as well as an earlier Federal Reserve exit from ultra-low interest rates and from holding U$ 4.45 trillion of Treasury bonds. Den Rest des Beitrags lesen »

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The Retreat of Financial Globalization?

Posted by hkarner - 5. November 2016

By on November 3, 2016  RGE EconoMonitorJoyce cc

Matthieu Bussière and Julia Schmidt of the Banque de France and Natacha Valla of CEPII (Centre d’Etudes Prospectives et d’Informations Internationales) compare the record of the period since 2012 with the pre-crisis period and highlight four conclusions. First, the retrenchment of global capital flows that began during the crisis has persisted, with gross financial flows falling from about 10-15% of global GDP to approximately 5%. Second, this retrenchment has occurred primarily in the advanced economies. particularly in Europe. Third, net flows have fallen significantly, which is consistent with the fall in “global imbalances.” Fourth, there are striking differences in the adjustment of the various types of capital flows. Foreign direct investment has been very resilient, while capital flows in the category of “other investment”—mainly bank loans—have contracted substantially. Portfolio flows fall in between these two extremes, with portfolio equity recovering much more quickly than portfolio debt. Den Rest des Beitrags lesen »

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