Macroeconomic & Geopolitical

Outlook Upgraded, But Still Not in First Class…

October 2020 – 3 min read
The IMF upgraded their 2020 growth outlook due to better-than-anticipated U.S. and euro area 2Q20 GDP, but noted a long and uneven recovery. Global flash PMIs will likely show differentiation by region next week, and Brexit negotiations are expected to continue into November.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Flash PMIs for October are expected to remain in expansionary territory as the U.S. economy continues to recover. Regional PMIs suggest continued strength in manufacturing, while elevated savings should provide a buffer to services spending.


  • After disappointing economic activity data across Europe, consensus expects further softening in service sectors and some in manufacturing. As a result, October Flash PMIs across Europe may relapse into contractionary territory. If so, Q4 is likely to see very low growth in Europe.

Asia Pacific

  • China 3Q GDP is expected to confirm a robust recovery, which is set to be echoed in activity data for September. A close eye will be kept on retail sales to see if the data this week, which signaled a rebound in domestic demand, is confirmed.
  • The PBOC is set to leave rates steady at their meeting next week, following better trade and credit data and a liquidity injection this past week. While the PBOC is looking to normalize policy, they appear committed to aid the recovery if needed.

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Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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