global economic conditions - federal reserve … · · 2018-04-11globalization & monetary...

Globalization & Monetary Policy Institute

Federal Reserve Bank of Dallas

GLOBAL ECONOMIC

CONDITIONSUpdated May 2018

http://www.dallasfed.org/institute

Table of Contents1. Indicators of Real Activity

Chart 1. Global GDP Growth

Chart 2. OECD Industrial Production

Chart 3. Global Purchasing Managers Index

Chart 4. Unemployment in Major Advanced Economies

Chart 5. Unemployment in OECD Economies

Chart 6. Volume of World Merchandise Trade


Chart 8. Baltic Dry Index

2. Inflation Indicators

Chart 9. Commodity Prices

Chart 10. Inflation in OECD Economies (CPI)

Chart 11. Global Inflation (Headline CPI)

Chart 12. Inflation in Major Advanced Economies (Headline CPI)

Chart 13. Inflation in Major Emerging Economies (Headline CPI)

3. Money and Capital Markets

Chart 14. Money Market Spreads

Chart 15. 10-Year Government Bond Yields in Major Advanced

Economies

Chart 16. Stock Market Indexes in Major Advanced Economies

Chart 17. Stock Market Indexes in Major Emerging Economies

4. Public Finances

Chart 18. General Government Net Lending/Borrowing in Major

Advanced Economies

Chart 19. General Government Net Lending/Borrowing in Major

Emerging Economies

Chart 20. General Government Gross Debt in Major Advanced

Economies

Chart 21. General Government Gross Debt in Major Emerging

Economies

5. Monetary Policy

Chart 22. Central Bank Policy Rates in Major Advanced Economies

Chart 23. Central Bank Policy Rates in Major Emerging Economies

Chart 24. Money Supply Growth in Major Advanced Economies

Chart 25. Money Supply Growth in Major Emerging Economies

6. U.S. External Accounts

Chart 26. U.S. Terms of Trade

Chart 27. U.S. Nominal Trade Balance, Customs Value

Chart 28. U.S. Current Account Balance

Chart 29. Nominal Value of the U.S. Dollar

Chart 30. Real Value of the U.S. Dollar

7. Current Analysis

Chart 31. Global Current Account Balances

Chart 32. Bond Spreads for Select Euro Area Economies

Chart 33. Select Economies’ Banking Exposure to Peripheral Euro-

Area Sovereign Debt

Chart 34. Sovereign Debt Repayment Schedule for Select Euro-Area

Economies

Indicators of Real Activity




Sources: National Statistical Offices, International Monetary Fund; Haver Analytics



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2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 1. Global GDP Growth

World (2017 Q4 = 4.0)

Advanced Economies (ex. U.S.) (2017 Q4 = 2.5)

Emerging Economies (2017 Q4 = 5.5)

U.S. (2018 Q1 = 2.6)

Percent, Year/Year

NOTE: The advanced economies (ex. U.S.) aggregate includes the Euro Area, Japan, the U.K., Canada, Australia, South Korea,

Switzerland and Sweden. The emerging economies aggregate includes China, Brazil, Russia, India, Mexico, Indonesia, Turkey, Argentina, South Africa and Colombia. The world aggregate includes these countries, which make up approximately 80 percent of

world GDP computed using purchasing power parity (PPP)-adjusted GDP weights.


Sources: OECD; Haver Analytics



80

85

90

95

100

105

110

115

120

2000 2002 2004 2006 2008 2010 2012 2014 2016

Index, 2005 = 100

Chart 2. OECD Industrial Production

NOTE: Countries included in the industrial production index are all members of the Organization for Economic Cooperation and

Development, or OECD (Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Luxembourg, Mexico, Netherlands, New

Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and

United States).

Last Observation: Dec = 112.6



Federal Reserve Bank of DallasSources: JPMorgan; Bloomberg

46

48

50

52

54

56

58

2014 2015 2016 2017 2018

Index

Chart 3. Global Purchasing Managers Index

Manufacturing (Apr = 53.5)

Services (Apr = 53.8)

Composite (Apr = 53.8)

NOTE: This index measures purchasing managers' perspectives of current business conditions. An index value greater than 50

indicates economic expansion from the previous month, while a value below 50 indicates contraction.


Sources: National Statistical Offices, EUROSTAT; Haver Analytics



0

2

4

6

8

10

12

14

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

U.S. (Apr = 3.9)

Euro Area (Mar = 8.5)

Japan (Mar = 2.5)

U.K. (Jan = 4.1)

Canada (Mar = 5.8)

Chart 4. Unemployment in Major Advanced Economies

NOTE: The chart plots harmonized unemployment data for the U.K.





5

6

7

8

9

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

Chart 5. Unemployment in OECD Economies

Last Observation: Mar = 5.4


Sources: Netherlands Bureau for Economic Policy Analysis; Haver Analytics



40

60

80

100

120

140

160

180

200

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017


Index, 2000 = 100

NOTE: This series includes data from 23 industrialized and 60 emerging market economies and covers approximately 97 percent o f

total world trade. Trade volume is calculated as the arithmetic average of world export volumes and world import volumes.

Last Observation: Feb = 185.4


Sources: Netherlands Bureau for Economic Policy Analysis; Haver Analytics



0

40

80

120

160

200

240

280

320

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18


World (Feb = 183.9)

Advanced Economies (Feb = 149.3)

Emerging Economies (Feb = 277.2)

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18

World (Feb = 187.0)

Advanced Economies (Feb = 154.5)

Emerging Economies (Feb = 252.8)

Index, 2000 = 100

NOTE: Import and export series include data from 23 industrialized and 60 emerging market economies and cover approximately 97

percent of total world trade.

Imports Exports


Sources: Baltic Exchange; Bloomberg



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2001 2003 2005 2007 2009 2011 2013 2015 2017

Chart 8. Baltic Dry Index

Index, 01/04/1985 = 1,000

NOTE: The Baltic Dry Index is a maritime shipping index that measures charter rates for shipping dry bulk commodities such as

coal, grain and iron ore.

Last Observation: = 1465


Inflation Indicators




Sources: Goldman Sachs; Haver Analytics



0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 9. Commodity Prices

Precious Metals (May 09 = 195.1)Agriculture and Livestock (May 09 = 114.5)Energy (May 09 = 113.9)Industrial Metals (May 09 = 88.9)

Index, Jan. 2007 = 100





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0

1

2

3

4

5

6

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent, Year/Year

Chart 10. Inflation in OECD Economies (CPI)

Headline Inflation (Mar = 2.3)Core Inflation (Mar = 2.0)

NOTE: The headline consumer price index (CPI) is the broadest measure of price changes consumers face in their day-to-day living

expenses. The core CPI excludes energy and food prices.


Sources: International Monetary Fund; Haver Analytics



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0

2

4

6

8

10

12

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent, Year/Year

Chart 11. Global Inflation (Headline CPI)

World (Mar = 3.7)

Advanced Economies (Mar = 1.9)

Emerging Economies (Mar = 4.8)


Sources: National Statistical Offices, European Central Bank; Haver Analytics



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-4

-2

0

2

4

6

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 12. Inflation in Major Advanced Economies

(Headline CPI)

U.S. (Apr = 2.4)

Euro Area (Apr = 1.3)

Japan (Mar = 1.1)

U.K. (Mar = 2.5)

Canada (Mar = 2.3)

Percent, Year/Year


Sources: National Statistical Offices; Haver Analytics



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0

5

10

15

20

25

30

35

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent, Year/Year

Chart 13. Inflation in Major Emerging Economies

(Headline CPI)

Brazil (Apr = 1.7)Russia (Apr = 2.5)India (Mar = 4.4)Indonesia (Apr = 3.4)China (Apr = 1.8)South Africa (Mar = 3.7)


Money and Capital Markets




Sources: Bloomberg, Haver Analytics



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50

100

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250

300

350

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 14. Money Market Spreads

U.S. Dollar (May 09 = 50.6)

Euro (May 09 = 3.5)

Japanese Yen (May 09 = 2.2)

U.K. Pound Sterling (May 09 = 18.4)

Basis Points

NOTE: The chart plots the spread, or difference, between 3-month interbank offered rates (Libor for the dollar, yen and pound

sterling; Euribor for the euro) and the overnight index swap rate for each currency.


Sources: Financial Times, Reuters, Bank of Canada; Haver Analytics



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0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 15. 10-Year Government Bond Yields

in Major Advanced Economies

U.S. (May 09 = 3.0)

Euro Area (May 09 = 0.6)

Japan (May 09 = 0.0)

U.K. (May 09 = 1.5)

Canada (May 09 = 2.4)

Percent


Sources: Financial Times, Wall Street Journal; Haver Analytics



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50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 16. Stock Market Indexes


U.S. (May 09 = 198)Euro Area (May 10 = 86)Japan (May 10 = 131)U.K. (May 10 = 124)Canada (May 09 = 128)

Index, Jan. 2007 = 100

NOTE: Stock market indexes are the Dow Jones Industrial Average Index for the U.S, the EURO STOXX 50 Price Index for the Euro

Area, the Nikkei 225 Average Index for Japan, the FTSE 100 Index for the U.K. and the S&P/TSX Composite Index for Canada.


Sources: Financial Times, Wall Street Journal; Haver Analytics



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50

100

150

200

250

300

350

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 17. Stock Market Indexes

in Major Emerging EconomiesBrazil (May 09 = 201) Russia (May 10 = 66)

India (May 10 = 260) Indonesia (May 09 = 332)

China (May 10 = 111) South Africa (May 10 = 231)

Index, Jan. 2007 = 100

NOTE: Stock market indexes are the Bovespa Index for Brazil, the RTS Index for Russia, the Bombay SENSEX for India, the Jakarta

Composite for Indonesia, the New Shanghai Stock Exchange Composite Index for China and the Johannesburg Stock Exchange Top 40Index for South Africa.


Public Finances





Federal Reserve Bank of DallasSources: International Monetary Fund; Haver Analytics

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-12

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-8

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-2

0

2

4

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 18. General Government Net Lending/Borrowing

U.S. (2018 = -5.3)

Euro Area (2018 = -0.6)

Japan (2018 = -3.4)

U.K. (2018 = -1.8)

Canada (2018 = -0.8)

Percent of GDP

NOTES: Data for 2018 are estimates; Data for 2017 for Japan and Canada are also estimates.




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0

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

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2000 2003 2006 2009 2012 2015 2018

Percent of GDP

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2000 2003 2006 2009 2012 2015 2018

Percent of GDP

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1

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

Chart 19a. General Government Net Lending/Borrowing

NOTES: Data for 2018 are estimates; Data point for 2017 for Indonesia is also an estimate.

Brazil (2018 = -8.3) Russia (2018 = 0.0)

India (2018 = -6.5) Indonesia (2018 = -2.5)




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0

1

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

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0

2

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

Chart 19b. General Government Net Lending/Borrowing

NOTE: Data for 2017 and 2018 are estimates.

South Africa (2018 = -4.2)China (2018 = -4.1)


Japan (2018 = 236.0)




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100

150

200

250

0

20

40

60

80

100

120

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 20. General Government Gross Debt

U.S. (2018 = 108.0)

Euro Area (2018 = 84.2)

U.K. (2018 = 86.3)

Canada (2018 = 86.6)

NOTES: Data for 2018 are estimates; Data for 2017 for Japan and Canada are also estimates.

Percent of GDP Percent of GDP




55

60

65

70

75

80

85

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

Chart 21a. General Government Gross Debt

0

10

20

30

40

50

60

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

55

65

75

85

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

NOTES: Data for 2018 are estimates; Data point for 2017 for Indonesia is also an estimate.

0

20

40

60

80

100

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

Brazil (2018 = 87.3) Russia (2018 = 18.7)

India (2018 = 68.9) Indonesia (2018 = 29.6)




20

25

30

35

40

45

50

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

Chart 21b. General Government Gross Debt

25

30

35

40

45

50

55

2000 2003 2006 2009 2012 2015 2018

Percent of GDP

NOTES: Data for 2018 are estimates; Data point for 2017 for South Africa is also an estimate.

China (2018 = 51.2) South Africa (2018 = 54.9)


Monetary Policy




Sources: National Central Banks; Haver Analytics



-1

0

1

2

3

4

5

6

7

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 22. Central Bank Policy Rates


U.S. (May 10 = 1.625)

Euro Area (May 10 = 0.00)

Japan (May 10 = -0.10)

U.K. (May 10 = 0.50)

Canada (May 10 = 1.25)

Percent

NOTES: The chart plots the federal funds rate for the U.S., the main refinancing operation rate for the Euro Area, the base rate for the

U.K., the overnight target rate for Canada and the uncollateralized overnight call rate for Japan applied until April 3, 2013, before the

main operating policy target changed to expanding the monetary base. On February 16, 2016, the Bank of Japan (BoJ) adopted

negative interest rates applied to excess reserves that financial institutions hold at the BoJ. The Bank also introduced an interest rate

target of around 0 percent for its 10-year government bond yields in September 2016.


Bank of Indonesia Rate (Aug 18 = 6.50)

Repo Rate (May 10 = 6.00)

Bank of Russia Key Rate (May 10 = 7.25)




Brazil Russia

India Indonesia

Overnight SELIC Target Rate (May 10 = 6.50)

Reverse Repo Rate (May 10 = 5.75)

7-Day Reverse Repo Rate (May 10 = 4.25)

0

5

10

15

20

25

2005 2007 2009 2011 2013 2015 2017

Percent

Chart 23a. Central Bank Policy Rates

in Major Emerging Economies

0

5

10

15

20

25

2005 2007 2009 2011 2013 2015 2017

Percent

0

2

4

6

8

10

2005 2007 2009 2011 2013 2015 2017

Percent

0

2

4

6

8

10

12

14

2005 2007 2009 2011 2013 2015 2017

Percent

NOTE: The Reserve Bank of India utilizes the repo rate to inject liquidity into the monetary system and the reverse repo rate to

remove liquidity. On August 19, 2016, the Bank of Indonesia changed its policy rate from the BI rate to the 7-day reverse repo rate.


Average Repo Rate (May 10 = 6.50)




China South Africa

0

2

4

6

8

10

2005 2007 2009 2011 2013 2015 2017

Percent

0

2

4

6

8

10

12

14

2005 2007 2009 2011 2013 2015 2017

Percent

Chart 23b. Central Bank Policy Rates


1-Year Lending Rate (May 10 = 4.35)

1-Year Deposit Rate (May 10 = 1.50)





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0

5

10

15

20

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 24. Money Supply Growth


U.S. (Apr = 3.8)

Euro Area (Mar = 3.9)

Japan (Mar = 3.3)

U.K. (Mar = 2.2)

Canada (Mar = 4.6)

Percent, Year/Year

NOTE: The chart plots MZM in the U.S, M2 in the Euro Area, Japan and Canada and M4 in the U.K.





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0

10

20

30

40

50

60

70

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 25. Money Supply Growth


Brazil (Mar = 7.0)Russia (Mar = 9.9)India (Mar = 14.2)Indonesia (Mar = 7.5)China (Mar = 8.8)South Africa (Mar = 7.9)

Percent, Year/Year

NOTE: The chart plots M2 for each country.


U.S. External Accounts




Sources: U.S. Bureau of Labor Statistics; Haver Analytics



80

85

90

95

100

105

110

115

120

125

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 26. U.S. Terms of Trade

Terms of Trade (Mar = 103.4)

Terms of Trade (Excluding Oil) (Mar = 89.3)

Index, Jan. 1990 = 100

NOTE: U.S. terms of trade are calculated as the import price index/export price index.


Sources: Census Bureau; Haver Analytics



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-40

-30

-20

-10

0

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 27. U.S. Nominal Trade Balance, Customs Value

Bil. U.S. Dollars

NOTE: The chart plots the nominal trade balance in goods.

Last Observation: Mar = -68.3


Sources: U.S. Bureau of Economic Analysis; Haver Analytics



-7

-6

-5

-4

-3

-2

-1

0

2000 2002 2004 2006 2008 2010 2012 2014 2016

Chart 28. U.S. Current Account Balance

Percent of GDP

NOTE: All values are nominal.

Last Observation: 2017 Q4 = -2.6


Sources: Federal Reserve Board; Haver Analytics



50

60

70

80

90

100

110

120

130

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 29. Nominal Value of the U.S. Dollar

Nominal Exchange Value of the U.S. Dollar (Apr = 102.6)

U.S. Dollar vs. Major Currencies (Apr = 89.7)

U.S. Dollar vs. Other Important Trading Partners (Apr = 119.1)

Index, Jan. 2000 = 100

NOTE: Countries or regions whose currencies are included in the major currencies index are the Euro Area, Canada, Japan, United

Kingdom, Switzerland, Australia and Sweden. Countries included in the other important trading partners index are Mexico, China, Taiwan, Korea, Singapore, Hong Kong, Malaysia, Brazil, Thailand, Philippines, Indonesia, India, Israel, Saudi Arabia, Russia,

Argentina, Venezuela, Chile and Colombia. An increase in each index represents an appreciation of the U.S. dollar and a decrease

represents a depreciation.


Sources: Federal Reserve Board; Haver Analytics



60

70

80

90

100

110

120

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 30. Real Value of the U.S. Dollar

Real Exchange Value of the U.S. Dollar (Apr = 95.3)

U.S.Dollar vs. Major Currencies (Apr = 101.3)

U.S.Dollar vs. Other Important Trading Partners (Apr = 92.6)

Index, Jan. 2000 = 100

NOTE: Countries or regions whose currencies are included in the major currencies index are the Euro Area, Canada, Japan, United

Kingdom, Switzerland, Australia and Sweden. Countries included in the other important trading partners index are Mexico, China, Taiwan, Korea, Singapore, Hong Kong, Malaysia, Brazil, Thailand, Philippines, Indonesia, India, Israel, Saudi Arabia, Russia,

Argentina, Venezuela, Chile and Colombia. An increase in each index represents an appreciation of the U.S. dollar and a decrease

represents a depreciation.


Current Analysis







-1500

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0

500

1000

1500

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Chart 31. Global Current Account Balances

Bil. U.S. Dollars

U.S.

China

Japan

Others

Oil Exporters

Germany

NOTE: Oil exporting countries are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, Qatar, Saudi Arabia, United A rab

Emirates and Venezuela. The remaining countries not already listed for which there is data comprise "Others". For a sample ofcountries, striped columns denote forecasts.


Sources: Reuters; Haver Analytics



0

500

1000

1500

2000

2500

3000

3500

4000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chart 32. Bond Spreads for

Select Euro Area Economies

Greece (May 10 = 353)

Ireland (May 10 = 42)

Portugal (May 10 = 116)

Spain (May 10 = 75)

Italy (May 10 = 138)

Basis Points

NOTE: The chart shows the spread, or difference, in interest rates between 10-year government bonds for various countries and

German 10-year government bonds.



Federal Reserve Bank of DallasSources: Bank for International Settlements, International Monetary Fund; Haver Analytics

0

5

10

15

20

France U.K. Germany Belgium Ireland Switzerland Spain Austria Italy U.S. Japan Sweden Canada

Chart 33. Select Economies' Banking Exposure

to Peripheral Euro-Area Sovereign Debt

Greece

Ireland

Portugal

Spain

Italy

Percent of GDP

NOTES: The chart plots the claims that banks in each country have, as a share of its 2017 GDP, on sovereign debt in Greece, Ireland,

Portugal, Spain and Italy. All GDP values are based on International Monetary Fund estimates. All values are nominal.

June 2017



Federal Reserve Bank of DallasSources: Bloomberg, International Monetary Fund; Haver Analytics

14

16

13

12 11

10

12

9

76

10

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7

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9

5

67

2

4

10

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3 3

5

0

5

10

15

20

25

2018 2019 2020 2021 2022

Greece

Ireland

Portugal

Spain

Italy

Percent of GDP

Chart 34. Sovereign Debt Repayment Schedule

for Select Euro-Area Economies

2018 2022202120202019

NOTES: Repayment amounts include both principal and accrued interest. All GDP values are projections from the International

Monetary Fund. All values are nominal.


global economic conditions - federal reserve … · · 2018-04-11globalization & monetary...

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