In the words of... William De Vijlder: Resilient with question marks - BNP Paribas CIB
 
Tuesday 18 October 2016

BNP Paribas Group Chief Economist William De Vijlder discusses the latest market drivers.


Whether a glass is half full or half empty depends on who is looking at it and from which angle. On the economic front, recent data and the near-term outlook argue in favour of "half full".

Growth is resilient in the developed economies and recent releases for the Eurozone have surprised on the upside. Even Japan is looking better. The developing economies have shown some improvement, although the picture is very heterogeneous. The growth slowdown in China has been halted temporarily, in India growth is expected to increase slightly and the outlook for Brazil and Russia has improved with the prospect of leaving the recession behind.

Yet international organisations make a "half empty" assessment. The BIS is concerned about financial market dissonance, the OECD has issued a global growth warning, and last week's World Economic Outlook from the IMF emphasises a "subdued outlook subject to sizeable uncertainty and downside risks." Much of this has to do with "looking at the glass" from a different angle, i.e., with a longer term perspective: the slowdown in potential GDP growth and global trade, the too-high rate of unemployment, particularly among the youth, the reduced effectiveness of monetary policy, and high levels of public sector debt that limit policy leeway.

In addition, political uncertainties (Brexit, elections) have increased. With the risks and uncertainties having been well identified, it is now up to economic policy to take them on board. For monetary policy, this implies the ECB keeping its hand on the throttle and the Fed touching the brakes, but very gently.


William De Vijlder
Group Chief Economist, BNP Paribas Group
William De Vijlder began his career in the Economic Research Department at Belgium’s Generale Bank in 1987 and became Chief Investment Strategist in the Asset Management division in 1989. He was subsequently Managing Director and Global Chief Investment Officer at Fortis Investments. When Fortis Investments merged with BNP Paribas Investment Partners in 2010, he became member of the executive committee of BNP Paribas Investment Partners and CIO Partners and Alternative Investments, and subsequently CIO Strategy and Partners. In September 2013, he was appointed Vice Chairman of BNP Paribas Investment Partners. Since September 2014 he is Group Chief Economist of BNP Paribas.
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