The case for a rebound in global growth in Q1-Q2 2020 is getting stronger
One of the main difficulties in economics is to identify turning points in the business cycle. The notion of Credit Impulse tries to solve this issue by focusing on the evolution of the flow of new credit calculated as percentage of GDP. CASE publishes a quarterly update on Credit Impulse for the main global economies and Poland.
Based on preliminary data, global credit impulse – the second derivative of global credit growth and a major driver of economic activity – is giving signs of life. It is still in contraction, at minus 3.8% of GDP, but slowly moving upwards. Currently, more than half of the countries in our sample, representing 69.4% of global GDP, have experienced an acceleration in credit impulse over the past quarter. The improvement in global credit impulse is mostly due to slightly better China credit impulse and strong credit push in the United States.