2020 in dettaglio: le economie e la crescita economica

Chi sia Mohamed El Erian i nostri lettori lo sanno da un decennio, e altri lettori lo hanno scoperto più di recente, quando lo hanno ritrovato in prima pagina sul Corriere della Sera (nel 2019, come abbiamo raccontato qui nel Post.

Noi utilizzeremo alcuni brani di una sua intervista della scorsa settimana per offrire ai lettori del Blog una anticipazione dei temi che ritroveremo nel 2020 come determinanti per la performance dei nostri portafogli.

In questo secondo Post, vi invitiamo a leggere alcune considerazioni che fotografano lo stato attuale delle economie reali.

What does this mean for the economic outlook?
Around the end of 2017, almost everybody had bought into what was called a globally synchronized recovery. I was warning against that because it was just individual factors that contributed to a better outlook in the short-term. The fundamental structural integrity of the global economy was still weak and what was needed was pro-growth policies. Then, we got this global growth scare and a lot of people started predicting a U.S. recession. I dispute this view, because the consumer and the household sector are too strong to get a recession in the U.S. So what we’re going to continue to see is weak growth and divergence: The U.S. will continue to do ok, but my main worry about the global prospect is Europe.

Why?
Many people are saying that European economic data is bottoming out and we’re going to get a V-shaped recovery. But there’s a risk we’re going to see an L-shaped course, and that the Eurozone gets stuck with growth rates of 1% or less. That’s not fast enough, given the structural and financial vulnerabilities. Ironically, Europe is now recognizing that monetary policy is not the solution. People agree that more negative interest rates are likely to cause more harm than good. Also, people have identified policies for a hand-off from an excessive reliance on Central Banks to a more comprehensive growth strategy. But the problem in Europe is politics: They don’t allow for a quick implementation of these sorts of measures.

There is a lot of talk that Germany could implement a major fiscal stimulus program. What are the odds of such a «big-bang» approach?
I think that’s very hard to do. Not only is the political situation complicated, but one part of the German economy is just fine: the domestic sector. There’s a strong view that a broad-based fiscal stimulus would be problematic because the domestic sector is going to do well, and the issues in the manufacturing sector are due to the trade war and specific challenges facing the auto sector, neither of which is addressed by fiscal stimulus. So the argument that we are going to get a major German fiscal stimulus is going to prove too optimistic. I do think we’re going to get a small, environmentally oriented, green infrastructure program. But Germany needs something more on infrastructure - and the political system is not ready for that yet.

And what about China? China’s economy is slowing down and we’re seeing a rising wave of bond defaults.
People underestimate the extent to which China needs the global economy to navigate what is a very tricky development transition. It’s called the middle-income transition: going from a high growth to a moderate to low growth environment. It’s one of the most complicated transitions because when you are in a high growth environment, you do a lot of things that make less sense in a low growth environment. Already, we’re seeing some pockets of vulnerability come up. I don’t underestimate the difficulties that China faces, but compared to Europe, China politically has more policy flexibility. Over and over again, the Chinese have shown their political ability to correct course quickly.

Still, China is a state-controlled economy and history shows that central planning usually doesn’t end well.
To be clear: I wouldn't give up the liberal democracies of Europe. They are a huge asset to Europe. The problem is that when the voters get angry the political system is delayed in reacting with reform policies. Structural reforms are good over the long-term, but they can involve short-term costs. So what happens politically in Europe is really the politics of anger, whether you look at Brexit, the difficulty of government formation in Spain or Italy, or the protests in the streets. It’s not just Europe, it’s also happening in countries like Chile and Columbia – well managed countries having similar issues because the electorate wants more, not just in terms of higher growth but more inclusive growth.