Assessing countries at risk of hard versus soft economic landings

Assessing countries at risk of hard versus soft economic landings. ... Whether an economy has a hard or soft landing should be an important determining factor in how much central banks …

CouponFollow Extension

FAQs about Assessing countries at risk of hard versus soft economic landings Coupon?

Is the global economy a soft landing?

The clouds are beginning to part. The global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up. But the pace of expansion remains slow, and turbulence may lie ahead. Global activity proved resilient in the second half of last year, as demand and supply factors supported major economies. ...

Which countries are most likely to have soft landings?

Interestingly, Malaysia, Indonesia, the Philippines, Mexico, Czech Republic, Peru, South Africa, Brazil, India and Romania, all EM, are more likely to have soft landings. Whether an economy has a hard or soft landing should be an important determining factor in how much central banks would later need to cut rates. ...

Are developed market economies more at risk of hard landings?

Our analysis suggests developed market economies are more at risk of hard landings this time than emerging market economies, a break from the usual pattern. We analyzed 101 past monetary policy tightening cycles across 30 countries, of which 41 ended in hard economic landings and 60 in soft landings. ...

What is the difference between hard landing and soft landing?

Hard landing is a recession (two consecutive quarters of negative GDP growth) within three years after the interest rate peak; otherwise, the episode is classified as a soft landing. 2 The grid refers to the percentiles of the variable’s country-specific historical distribution. ...

Is inflation a soft landing?

The policy response to the current rise in inflation involves difficult trade-offs, and the path to a soft landing is narrow. Tightening too much or too quickly could result in financial stress and a hard landing, inflicting unnecessary damage to the economy. ...

Which countries are most likely to have a hard landing?

For example, countries with high inflation just before a tightening cycle begins are more likely to have a hard landing. Elevated household debt and property prices in DM at the start of tightening cycles are also common features of hard landings. ...