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Talking Points:

  • Risks regarding developing economies are a concern for central banks
  • Slowdown in the Asian countries is weighing on energy prices
  • Decreased demand for commodities is adversely affecting growth inflation

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The risks pertaining to the health of the global economy have found its way into the major central banks’ policy statements. The decrease in global demand has been noted as a cause for the drop in commodity prices which is weighing on inflation and growth. The Federal Reserve appears to have more of a positive outlook than its counterparts. In its October policy statement, the central bank removed the assertion that global risk “may restrain economic activity” that featured prominently in the previous month’s assessment. Below is a list of the other major central banks’ views on the world economy, taken from their most recent official statements.

European Central Bank:

  • Uncertainty pertaining to China is particularly high
  • Global inflation has remained moderate
  • Deterioration in inflation data is largely due to commodity prices

Bank of England:

  • Outlook for global growth has weakened
  • Continuing drag from commodity and imported prices is weighing on inflation
  • UK-weighted global growth expected to be more modest than previously thought

Reserve Bank of Australia:

  • Outlook for China remains a key uncertainty for global growth
  • Decreased Asian demand contributed to lower commodity prices
  • Inflation rates remained low and below the target level

Reserve Bank of New Zealand:

  • Concerns remain about lower growth in China
  • Low CPI partly reflects the fall in world oil prices
  • Global economic growth is below the average

Bank of Japan:

  • Exports and industrial production have been flat due to slowdown in emerging economies
  • Declining energy prices likely to keep CPI low for the time being
  • Risks to outlook include developments in emerging and commodity-exporting economies

Bank of Canada:

  • CPI near the bottom of the range due to consumer energy prices
  • Uncertainty about China’s transition has put further pressure on oil and commodity prices
  • Global economic growth may pick up in 2016 and 2107

original source
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