Brexit had less impact on the global economy than many feared - NAB

Research Team at NAB, suggests that the Brexit has had less impact on the global economy than many feared.

Key Quotes

“Financial markets are generally either back to pre-referendum levels or even stronger, and the direct economic fall-out looks like being largely restricted to a UK recession and modest spill-over to European trading partners. Having dodged yet another bullet, the global economic upturn continues along at its sub-trend pace with only a few inconclusive signs that things are finally about to get better.

We have marked down our US forecasts in the wake of disappointing second quarter data but East Asia is doing slightly better and the outcome is 2016 forecast global growth stays at 2.8%. Inflation generally remains sub-target, central banks have used up much of their policy ammunition (although very unorthodox measures like “helicopter money” remain) and the structural factors that have weighed on global growth remain.

China and India are driving more than half of global growth, the former by returning to time-honoured pump priming measures that pile up debt and the latter by printing statistics that many view as erring on the side of optimism in measuring GDP.”