Global Economy latest publications
May shows progress in the labor market, due to the gradual opening of the economy, with the recovery of 15% of the jobs and 33% of the labor force lost between February and April. However, the high level of inactivity seen until April translated into an increase in the number of the unemployed in May.
Consumer prices increased by 1.13% in June, remaining significantly above both the consensus and our expectation (0.6% vs. 0.45%). Thus, also led by the negative base effects, annual inflation accelerated to 12.62% from 11.39% in May.
Over 10M people have been affected by Covid-19. Latin America remains in the spotlight. China's security law for Hong Kong worsened China-U.S. relations. Anti-racism movement spread globally. President Putin can have two more six-year terms. Libya’s war intensified. Israel’s annexation plans of West Bank caused tensions.
U.S. economy showed further signs of strengthening with the labor market adding 4.8M jobs. While overall unemployment rates have declined, there remain significant disparities among groups.
The world is experiencing the deepest recession in the last hundred years. The IMF estimates that the global economy will contract 4.9% in 2020. Many countries will have contractions in the second quarter of this year of between 30% and 40% at annualized rates.
Lima's Consumer Price Index fell 0.27% m/m in June, a downside surprise for the market (Bloomberg Consensus: -0.10% m/m). With June's monthly result, year-on-year inflation slowed down to 1.6%, from 1.8% the previous month.
The drop in the volume of global trade is reflecting the most severe global recession since the Second World War, both due to the economies affected and the intensity of the expected falls in GDP over the middle quarters of 2020.
The Institute's reclassification of 116,000 loans to the past-due portfolio, as they were considered to be outstanding, increased delinquency to 14%. This is an accounting change rather than a growing impairment of credit.