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Quarterly Economic Outlook - October 2017

Chief Economist

Economic activity is cruising. Confidence indicators continue to surprise positively, pointing to a solid cyclical growth momentum in the months ahead. Unemployment is coming down, yet stronger labour market conditions have failed to generate meaningful upward price pressures so far.


  •  Wage growth remains subdued against the back of slow productivity growth, the presence of labour market slack and lower anchored inflation expectations.
  • Central banks are in no hurry to tighten monetary policy. That said, monetary policymakers are cautiously looking to gradually move away from the current near zero interest rate environment.
  • This makes sense in order to create space for manoeuvre further down the road and to prevent stretched valuations in certain asset classes from turning into bubble-like valuations.
  • The structural economic outlook is still clouded against the back of demographic headwinds, slower productivity growth, the debt overhang, the difficult economic rebalancing process in China and geopolitical concerns.

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