Global Talent Update -- April 2018
Europe, Middle East and Africa
After a year characterized by considerable sociopolitical unrest, government and business leaders from the European Union's second-largest economy likely hoped for news of economic growth to round 2017 out on a positive note. France's statistics agency INSEE released final figures for 2017's economic progress, indicating 2 per cent GDP expansion, slightly ahead of the 1.7 per cent it had projected for the year, according to Agence France-Presse. Given new French President Emmanuel Macron's strong focus on business development and other domestic policy, this growth can be seen as an early victory for the current government.
This news helped motivate UBS Wealth Management, the largest firm of its kind in the world, to upgrade its independent projection of France's GDP growth, bumping the figure up to 2.3 per cent after an original estimate of 1.8 per cent. UBS economist Dean Turner told the Financial Times that the improved economic confidence and the notable uptick between 2016 and 2017 GDP both bode well for France's future.
"Following his election and subsequent parliamentary landslide, Emmanuel Macron's willingness to embark on his ambitious programme of domestic structural reform has led to a renewed confidence in the outlook for the economy," Turner said. This prioritization of domestic focus as opposed to an immediate delve into foreign policy or Defense makes sense, given Macron's background as a businessman rather than a political figure.
Economic growth in Ireland has progressed at a breakneck pace for the last several years, and recent figures make it clear that 2017 was no exception. Citing statistics released by the country's Central Statistics Office, Irish public broadcast network RTE reported a 7.8 per cent increase in national GDP, making Ireland the EU's fastest-growing economy for the fourth time in a row. Other notable positive metrics included a 4.6 per cent rise in goods-based consumer spending and a 1.9 per cent uptick in "personal consumption expenditure" - the CSO's term for overall spending activity among Irish citizens.
There are concerns among some Irish economists regarding the sustainability of the nation's economic solvency, as certain metrics - like poor wage growth, the cost of housing and debt per household - are a notable contrast to the positives noted above. However, continuously declining unemployment and foreign investment from sectors such as tech will likely keep Ireland well above water for the foreseeable future.
From the mid-1990s to late 2017, the economy of Japan existed in a realm of stasis: No major progress occurred after the furious pace of development in the 1970s and 1980s gave rise to the businesses that dominate the country today - naturally causing that unsustainable bubble of growth to burst - but Japan didn't contract economically, either. In recent months, sustained growth has returned to the world's third-largest economy, and the Japanese government expressed as much in its latest monthly updates on the situation, according to Reuters.
Steadily rising capital expenditures, particularly on home electronics and mobile devices, as well as an uptick in the prices of core goods, stand out as notable drivers for this latest period of growth. The government also cited the economic benefits of investments in semiconductors and industrial robots in the newest report.
In its aim to match recent successes of its neighbors in Southeast Asia, Thailand now looks to break ground on a variety of infrastructure projects, according to the Bangkok Post. Deputy Prime Minister Somkid Jatusripitak confirmed this when speaking at a national Board of Investment seminar March 20. He also cited the value of government-facilitated tech developments in his speech.
"With these important strategies, I am confident [that] in three to four years, Thailand will be significantly transformed," Somkid said.
Because Thailand has been under martial law since Prime Minister Prayut Chan-o-cha's 2014 coup d'etat, the leader's political opponents and those observing the situation from afar remain dubious of the government's pronouncements. Prayut's continued postponement of democratic elections - which he has done each year since taking power - only adds to this, according to The Diplomat. Nevertheless, the country's continued development in the manufacturing sector, and tourism remaining a strong producer of revenue as it has for many decades, both guarantee that there is a certain degree of upside for the Thai economy, one that will persist through the near future.
The U.S. economy surged forward during the first quarter of 2018, adding a total of 313,000 nonfarm payroll jobs in the month of February, per the Employment Situation Summary from the Bureau of Labor Statistics. While the unemployment rate did not drop from the previous month, it remained static at 4.1 per cent - already a historic low - as it has for the last five months. According to Bloomberg, it had been the general consensus of economists that American organizations would add 205,000 jobs, which would have been a considerable gain in and of itself. Yet the trouncing of expectations that occurred in February would seem to represent that the country's economic recovery can be sustained further.
Construction, retail trade, manufacturing, healthcare and professional services accounted for the lion's share of the 313,000 new positions that were created, with construction taking the No. 1 spot by a significant contribution of 61,000 new jobs. Retail, as the runner-up, still didn't come within 10,000 of the construction sector's figure, adding 50,000 roles during February. None of the other leading industries added more than 31,000 positions.
To further bolster the American economic picture, the Federal Reserve implemented the first of the year's increases to federal benchmark interest rates, raising the figure from 1.5 per cent to 1.75 per cent, according to The Washington Post. This change marks the highest that Fed rates have been since 2008, just before that year's financial crisis.
While three more rate hikes will definitely occur, per new Chairman Jerome H. Powell, the new leader of the Fed didn't rule out the possibility of a fourth hike. Additionally, Powell's department revised its projections for American growth in 2018 to be even more positive, now predicting 2.7 per cent economic expansion this year and 2.4 per cent in 2019.
The nations of South and Central America appear poised to continue on the path of slow but steady positive growth as the first quarter of 2018 comes to a close. Encouraging signs of cooperation between the region's countries were present at the World Economic Forum on Latin America - which took place in Sao Paulo from March 13-15 - due in many ways to the issues that so many of these societies share. According to Devex, chief among these issues was the need for greater accountability and transparency in the wake of corruption scandals from the recent past, as well as stronger, more balanced initiatives to encourage investment.
Sustainability also emerged as a major topic at the event among various discussion groups. Specifically, significant attention was paid to the need for balance between businesses' drive to increase bottom-line profits and obligation to give back to the people and environments in which they are situated. Incentivizing social and environmental philanthropy by businesses in the form of tax breaks was also discussed.