16 February 2018
Key events in developed markets next week

Will recent market turmoil take its toll on consumer and business confidence in Europe?

US: data unlikely to stop March Fed rate hike

US business surveys may well be showing ongoing strength the “hard” activity data for January has been disappointing with both retail sales and manufacturing production missing market expectations. Nonetheless, the employment, wage and confidence figures all look very good and so we believe there are some weather effects hurting the official data and these will quickly reverse. Inflation pressures continue to build and even if we get soft housing numbers next week we are going to need to see something big (a major equity market correction, for example) for the Federal Reserve to choose not to hike interest rates at the March FOMC meeting.

Key events in EMEA next week

It's a big week for EMEA activity data, find out what our economists will be looking out for

The CIS Space: improving economic activity in Russia

In the CIS space, Kazakhstan's preliminary GDP growth estimate for 2017 may reveal around 4% growth.

Russia will have its key macro data for January, which may reveal a pick-up in real wages growth due to public wage indexation, but on the back of some base-effect related weakness in retail sales. Still, we expect to see improving momentum in economic activity in coming months.

Asia week ahead: Singapore budget steals limelight

A hike in Singapore’s good and services tax (GST) seems to be a done deal but it bodes ill given already weak domestic spending

Higher consumption tax in Singapore

An annual rite of spring, Singapore’s Finance Minister Heng Swee Keat unveils the Budget for 2018 on Monday, February 19. The budget is likely to reaffirm official 1.5-3.5% growth and 0-1% inflation forecasts for 2018. Over the last two years, Singapore’s economic growth has recovered close to the top end of the government’s estimate of potential growth of 2-4% (3.5% in 2016 and 3.6% in 2017).  However, firmer headline growth masks underlying weakness, reflected in domestic demand and stubbornly low consumer price inflation. With the end of last year’s export surge, sustaining the current rate of GDP growth in coming years will entail continued fiscal pump-priming.

Higher GST could depress consumer spending

The government has flagged a rapid rise in public expenditure in the coming years, though this will also be accompanied by a drive to raise tax revenue. A well-publicized tax initiative in the 2018 budget is a hike in the Goods and Services Tax (GST). It looks like a done deal with a 2 percentage point hike to 9% to be phased in over two years, while bringing e-commerce under the GST net is also under consideration. The move may be some help in the recovery of inflation from its current low level (0.6% in 2017). But the risk is that a tax hike could potentially backfire by depressing consumer spending further.

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Our view on next week’s key events

Discover what our analysts are looking out for next week in our global economic calendars 

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