Nomura Global Economics: Treading Water
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Nomura's global economics review portrays a world treading water: growth and policy are broadly static even as economies diverge. The bank expects US core CPI inflation to slow, China's exports to recover, Indian inflation pressures to build, and Singapore's MAS to tighten policy only slightly. Structural divergence from AI demand and potential Middle East conflict effects on energy prices and inflation frame the outlook.
Policy paths differ by economy. The Fed is expected to deliver a further 25bp hike in December, with the 2027 fed funds target-range midpoint at 4.125% and 2026 core PCE inflation at 2.98%. The BoJ, which Nomura expects to hike in December 2026 and March 2027 while retaining its roughly quarterly pace, should see 1.9% core CPI in 2026 and a 1.75% policy rate in 2027. The ECB is projected to add two hikes (December 2026, March 2027), lifting the deposit rate to 3.00%, while the RBI delivers a second 25bp hike in December before pausing. For China, Nomura sees pronounced divergence and soft domestic demand, GDP growth of 4.5% in 2026 and 4.0% in 2027, and only limited new Beijing support; France's plan to cut its deficit from about 5.4% of GDP to 5.0% by 2027 looks difficult to achieve.
Key exhibits
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