Seeking shelter
Weighing the outlook for the G8 economies
Currency and inflation risk has investors looking beyond their shores. We asked economists to rate the prospects of the G8 nations. Given the grim mood, they called it "a bit like choosing between deck chairs on the Titanic." But they found some differences in outlooks - except for the UK. Find their views below.
Comparing G8 performance
2008 has not been a good year for the G8: Canada, U.S., UK, Russia, Japan, France, Germany & Italy.
| Country | Market | Market YTD (as of Jul 14, 2008) |
Inflation |
|---|---|---|---|
| Canada | S&P TSX Comp | -1.01% | 2.2% |
| Russia | RTS Index | -3.60% | 15.1% |
| Japan | Nikkei 225 | -15.01% | 1.3% |
| USA | SP500 | -16.25% | 4.2% |
| UK | FTSE 100 | -17.91% | 3.3% |
| Germany | DAX | -23.14% | 3.3% |
| France | CAC 40 | -26.21% | 3.30% |
| Italy | MIBTEL | -27.28% | 3.8% |
Resource economies best placed
The best off in the G8 may be the resource economies, Russia and Canada. They benefit from high commodity prices, much of which can be regarded as a permanent fact of life. Full Article
Relative havens in Germany and surprise, Canada
Watch these three factors: Property market, trade linkages with faster economies and whether controlling inflation is the key for policy makers. Through this prism, Milligan finds some comfort in the outlook for Canada and Germany. Full Article
Poisonous cocktail at play in UK
UK indicators have been slipping from one all-time low to the next, says Kater. As for the U.S., "it always comes as a surprise to see how robustly the US economy responds." Full Article
UK lags a sluggish pack
There's no shortage of worthy choices on the bleak side. That said, Porter judges the U.K. outlook as the most challenging and calls Japan a potential runner-up. At the risk of being accused of home country bias, he believes Canada retains the best combination. Full Article
That's easy, it's Russia
Russia’s prospects stand head and shoulders above the rest, Clarke says. The bad? Growth for the rest will fall short. The ugly? The UK and Italy will stand at the bottom of the pile. Full Article
Some solace in the rouble
Russia won’t be insulated from the global economic slowdown, but currency specialist Jon Harrison still finds the rouble vs. basket trade among the most attractive trades in emerging markets. Full Article
POLL: G7 Outlook
Dim prospects
Growth prospects are dimming across the G7, putting central banks on "an extraordinary tightrope," a Reuters poll of 250 economists showed. Full Article
G8 Summit News
Modest but measurable
This year's G8 summit reinforced two truisms: the problems of the age, such as global warming, are extraordinarily complex and the G8 alone cannot resolve them, Alan Wheatley writes. Full Article
