Samantha Amerasinghe, Economist at Standard Chartered, points out that their measure of global broad money supply, SC Divisia slowed to 6.6% y/y in Q1-2018 from 7.2% in the prior quarter, the largest quarterly slowdown since March 2017.
Key Quotes
“Divisia growth has been negative since September 2016, barring the past two quarters in which still-accommodative monetary policy and distortions caused by India’s demonetisation exercise led to a small uptick.”
“SC Divisia signals a possible tapering of global growth in 2018 due to the more hawkish stance of central banks in reversing quantitative easing (QE).”
“Divisia money supply has a good correlation with GDP growth and is a useful indicator for GDP trends.”
“The slower pace of Divisia growth in Q1-2018 is primarily due to the UK and euro area; they witnessed 1.5ppt and 1.0ppt falls in broad money supply growth, respectively, compared with Q4-2017, due to the gradual withdrawal of monetary stimulus.”
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