Global

Economic Growth Projections 2014 2015
Developed Economies 2.2% 2.3%
Emerging Markets 5.1% 5.4%
Global Growth 3.7% 3.9%
Outlook The IMF expects global growth to improve modestly throughout 2014 and 2015. With the United States and Japan performing well and Europe coming out of recession, we view this as a likely scenario. China's growth rate remains unsustainable but any slowdown is unlikely to derail global growth.

Source: IMF

United States

Economic Snapshot Last Reported Result Comments
Growth (GDP) 2.4% Dec'13 annualised Rate of growth has slowed marginally
Unemployment 6.70% Feb'14
7.50% Feb'13		 Long term trend of improvement has slowed in recent months
Industrial Production 2.8% Feb'14 y/y
0.4% q/q		 Growth is only modest and below long term average.
ISM Manufacturing PMI 53.2 Feb'14
51.9 Jan'14		 PMI has averaged 53.8 over the last 12 months. The manufacturing sector expanded in February for the ninth consecutive month, and the overall economy grew for the 57th consecutive month. Survey indicates that manufacturing is still expanding but at a slower rate than 3 months ago.
Retail Sales 1.5% y/y Feb'14
0.3%m/m		 Retail sales remain relatively weak
Credit Growth 5.3% y/y Jan'14 Credit growth remains reasonable but is slowing
Outlook The US economy has improved sufficiently for monetary stimulus to be reduced. However, overall growth has slowed somewhat in recent months as government spending has begun to contract. The US continues to face the daunting challenge of maintaining sufficient growth to reduce unemployment but at the same time reducing its budget deficit to rein in its enormous government debt and improve the sustainability of its economy.

Eurozone

Economic Snapshot Last Reported Result Comments
Growth (GDP) -0.5% y/y Dec'13
+0.3% q/q		 Eurozone has returned to growth
Unemployment 12% Jan'14
12% Jan'13		 Rate remains stubbornly high and has not improved in the last year despite the recent improvement in GDP.
Industrial Production 2.1%y/y Jan'14
-0.2% m/m		 January data contradicted PMI and is probably due to seasonality. Overall we expect the expansion to continue.
Manufacturing PMI 53.2 Feb'14
54.0 Jan'14		 Second strongest reading for 3 years. Broadbased expansion of output and new orders.
Retail Sales +1.3% y/y Jan'14
0.13%m/m		 Trend is improving
Credit Growth 1.7% y/y Jan'14 Credit still contracting as household and business balance sheet repair continues
Outlook Growth in Germany remains solid and France recently returned to growth alongside improvements in both Spain and Italy. Growth in the Eurozone is expected to improve throughout 2014 but remain very weak in outright terms and perhaps not strong enough to reduce the stubbornly high unemployment rate.

China

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Economic Snapshot Last Reported Result Comments
Growth (GDP) 7.7% y/y Dec'13
1.8% q/q		 Growth still high in outright terms but trend is slowing
Unemployment 4.1% Dec'13 Stable
Industrial Production 8.6% y/y Dec'13
0.61% m/m		 Rate of growth slowing
Manufacturing PMI 48.5 Feb'14
49.5 Jan'14		 Increasing rate of contraction
Retail Sales 11.8% y/y Feb'14
0.71% m/m		 Rate of growth slowing
Fixed Asset Investment 17.9% y/y Feb'14 Rate of growth slowing
Outlook China's growth rate continues to be propped up by unsustainable investment in residential housing and infrastructure. Cities continue to be built in the hope that they will be urbanised but the reality is that cities are only populated if work is readily available. We continue to see a heightened risk of a hard landing for China's economy when this credit fuelled bubble eventually bursts.

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