Point COVID-19 : Un choc désinflationniste - Partie 1
- The inflationary impact has been one of the most debated macroeconomic effects of the COVID-19 shock. The virus is likely to have different effects on different sectors and result in a greater dispersal of prices.
- Some sectors will suffer supply-capacity reduction from measures to contain the virus. But these sectors are likely to be less than one-third of consumer price baskets. Even here, it is not clear demand will outstrip pared supply.
- The virus presents other difficulties in analysing general price change – missing data, changing consumer weights and quality adjustments. On balance, we expect these will weigh on recorded inflation over the coming years.
- Our broader assessment is that the pandemic primarily presents a demand shock, that is likely to dominate over the next few years, weighing on inflation and threatening a fall in inflation expectations.
- We forecast 2020 inflation averaging just 0.4% in the Eurozone, 0.5% in the US, 0.6% in the UK and 0.1% in Japan. Base effects should see changes in annual rates for 2021 to 0.7%, 1.7%, 1.0% and -0.1% respectively.
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
This document has been edited by AXA INVESTMENT MANAGERS SA, a company incorporated under the laws of France, having its registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the Nanterre Trade and Companies Register under number 393 051 826. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.
In the UK, this document is intended exclusively for professional investors, as defined in Annex II to the Markets in Financial Instruments Directive 2014/65/EU (“MiFID”). Circulation must be restricted accordingly.
© AXA Investment Managers 2020. All rights reserved