Global Economic Outlook and Strategy - Kadin Indonesia

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February 28, 2008 Global Economic Outlook and Strategy Table of Contents Page Key Events Calendar 2 Summary of Main Views 3 Overview 4-9 Short-Term Economic Forecasts 10 Key Global Economic Indicators 11 Short-Term Currency, Interest Rate and Bond Forecasts 12-13 Foreign Exchange Strategy 14-15 Global Equity Strategy 16-17 Long-Term Economic and Market Forecasts 18-19 Country Commentary United States 20 Japan 21 Euro Area 22-24 United Kingdom 25 Switzerland, Sweden, Denmark, and Norway 26 Canada 27 Australia and New Zealand 28 China 29 Emerging Markets 30-38 EMA Contact List 39 Recent Publications 40 Figure 2. Key Policy Events, 28 Feb – 31 Mar 08 Date Country Event Mar 2 Russia Presidential Election, First Round Mar 3-4 European Union Eurogroup Finance Ministers’ Meetings (Mar 3) and ECOFIN Meetings (Mar4) Mar 4 Australia Reserve Bank of Australia Board Meeting Mar 4 Canada Bank of Canada Interest Rate Announcement Mar 4-5 Brazil Central Bank of Brazil Monetary Policy Meeting Mar 5-6 United Kingdom Bank of England Monetary Policy Committee Meeting Mar 5-19 China 11 th National People’s Congress Approves the Formation of the New Government Mar 6 New Zealand Reserve Bank of New Zealand Monetary Policy Statement and Official Cash Rate Announcement Mar 6-7 Japan Bank of Japan Monetary Policy Meeting Mar 6 Euro Area ECB Monetary Policy Meeting and Press Conference Mar 7 Korea Bank of Korea Monetary Policy Meeting Mar 9 Spain General Election Mar 9 France Municipal Elections, First Round (Second Round Mar 16) Mar 9 United States & Canada Clocks Moved Forward One Hour Mar 12 United Kingdom 2008 Budget Mar 13 Philippines Central Bank of the Philippines Monetary Board Meeting Mar 13 Switzerland Swiss National Bank Monetary Policy Assessment Mar 13 Norway Norges Bank Monetary Policy Report and Interest Rate Announcement Mar 13 Chile Central Bank of Chile Monetary Policy Meeting Mar 13 Peru Central Reserve Bank of Peru Monetary Policy Announcement Mar 13-14 European Union European Council of Heads of State and Government (Brussels) Mar 14 Mexico Bank of Mexico Monetary Policy Announcement Mar 14-16 G-8 G-8 Dialogue on Climate Change (Chiba, Japan) Mar 18 United States FOMC Meeting Mar 19 Turkey Central Bank of the Republic of Turkey Monetary Policy Meeting Mar 25 Israel Bank of Israel Interest Rate Announcement Mar 25 Slovakia National Bank of Slovakia Monetary Policy Report Mar 25-26 Poland National Bank of Poland Monetary Policy Council Meeting Mar 26 Romania National Bank of Romania Board Meeting Mar 26 Czech Republic Czech National Bank Monetary Policy Board Meeting Mar 28-29 European Union Informal Meeting of EU Foreign Ministers Mar 31 Europe Clocks Moved Forward One Hour Mar 31 Hungary Central Bank of Hungary Monetary Policy Meeting 2
February 28, 2008 Global Economic Outlook and Strategy Figure 3. Forecast Highlights and Changes from Last Month G3 • United States • With tight financial conditions reinforcing economic weakness, the Fed has taken a more aggressive tack, with only limited impact thus far. We look for cuts in the funds rate to 2% by midyear, barring a sharp recovery in risk appetite and housing leads. • Euro Area • Growth has slowed to a subtrend pace, where it probably will stay until late this year. Inflation remains high but should moderate quickly. We expect the ECB to ease policy modestly later this year. • Japan • Economic growth likely will remain near trend in 2008. The next BoJ rate hike probably will be delayed until around yearend, as uncertainties surrounding the global outlook have increased. Others • United Kingdom • The MPC will likely cut rates a lot more, but any easing will be gradual in order to grind down inflation expectations. • Canada • Moderating inflation and lingering downside risks likely will prompt an additional 100 basis points of BoC easing before summer. • Australia • The RBA is set to tighten policy again in March and May, with the risk of further tightening beyond that, as the Bank attempts to drive inflation back down toward the 2%-3% target range. • China • Rising inflation and weakening exports could lead to a period of tight monetary policy and loose fiscal policy. • Other Emerging Markets • Inflation worries are probably overblown, but they will reduce the scope for monetary loosening in the short run and dampen growth. 3
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Global Economic Outlook and Strategy - Kadin Indonesia

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