Charting the Global Economy: Central Banks Seen Holding the Line

(Bloomberg) --

Central banks in the U.S., Europe and Japan are resolute in their policy prescription of maintaining ultra-low interest rates even as economic growth prospects brighten and inflationary concerns mount.

The Federal Reserve, European Central Bank and Bank of Japan are among 16 major institutions expected to hold the line on monetary policy this year to ensure added escape velocity for their economies that were ravaged by the coronavirus pandemic.

Fresh U.S. data showed another pickup in business activity this month, as well as a sharp rebound in March new-home sales after weather-stricken February. In Japan, export growth registered the biggest advance in more than three years as the nation responded to robust demand from countries including the U.S.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

The aggressive rebound in global economic growth still isn’t enough for most of the world’s central banks to pull back on their emergency stimulus, according to Bloomberg’s quarterly review of monetary policy covering 90% of the global economy.

A new plan for debt restructuring known at the Common Framework gives the Paris Club group of creditors an opportunity to reassert its principles after years of waning influence and the emergence of China as the biggest lender to emerging countries.

A majority of people in France and half in Germany, the U.K. and the U.S. want to see significant changes to their nation’s economic system following the coronavirus pandemic, according to a report by Pew Research Center.

U.S.

New-home sales rebounded sharply in March to the strongest pace since 2006, creating a surge in builder backlogs that suggests residential construction will help power the economy in coming months. The number of houses sold and awaiting ground breaking jumped.

A gauge of output at manufacturers and service providers reached a record high in April, adding to evidence of stronger demand that’s fueling inflationary pressures, according to IHS Markit survey data.

Europe

Britain recorded the largest budget deficit since World War II in the fiscal year ended March, showing the task facing Chancellor Rishi Sunak to repair the coronavirus-battered public finances.

About 1-in-6 of the U.K. workforce remain off the job following the coronavirus pandemic, underscoring the task facing Chancellor of the Exchequer Rishi Sunak as he tries to revive the economy from its worst slump in three centuries.

Mario Draghi is using his position as Italian prime minister to deliver the one thing he could never conjure up when he was head of the European Central Bank: massive fiscal stimulus.

Asia

After fueling its V-shaped recovery by boosting spending on housing and infrastructure, China appears in no rush to drop its investment-led growth model despite international calls for it to “rebalance” its economy.

Japanese exports posted a double-digit increase for the first time in more than three years in March as the recovery picked up in key markets abroad.

Emerging Markets

Bloomberg Economics’ ranking of 75 emerging-market and frontier economies -- based on confirmed Covid-19 deaths, vaccination rates, mobility levels and the policy space available to cushion the economic damage -- shows those in the Gulf Cooperation Council and East Asia performing better than the rest of the Middle East, Central and Eastern Europe and Latin America.

With the Castro family’s reign having ended, the Cuban economy remains in dire straits. The island nation’s output shrank 11% last year, with a drop in tourism sparked by Covid-19 exacerbating the pain caused by a decline in exports, which have fallen by a third since 2014.

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