MNI Macro Deep Dive - May 2022: Focusing On Fiscal

EXECUTIVE SUMMARY:

• Slowdown in global fiscal consolidation will provide a small boost to global growth overall, but there is significant variation in country-by-country dynamics.
• The US and UK are among the most notable tightening stories, while Eurozone and Japanese policy is relatively less restrictive.
• Fiscal restraint in emerging markets is more limited, with Chinese loosening set to reverse prior tightening.
• Tighter fiscal policy may be a factor in government bond yield dynamics, with the flattest curves also happening to be those expected to see the largest cumulative tightening over 2022-23.

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