Economic data inflation continued to be mixed and driven by the impact of lockdowns in different countries.
U.S. initial jobless claims rose early in February, but fell back later in the month, with retail spending increasing the most in almost half a year.
READ ALSO: Coronation Merchant Bank records 15% PBT growth in 2020
UK retail spending saw its largest drop since spring of 2020 due to the lockdown, but forward-looking PMI indicators skewed surprisingly to the upside. In Q4 2020, U.S. GDP recorded a solid growth of 4.1%, while the U.K.’s GDP growth was also positive at 1.0%. However, the Eurozone contracted by -0.6%.
Among major developed countries, the UK continued to lead on vaccine roll-out, with a majority of the most vulnerable population having received their first shot by the end of February 2021.
The US was catching up fast, while the EU remained far behind. Interestingly, new studies provided evidence of high levels of protection against severe cases after just a single dose of the vaccine.
Global COVID-19 cases saw a massive decline over the month, which led to tentative easing of restrictions in some U.S. states, while the UK announced a cautious phased-in reopening plan starting in March 2021. Likewise, Japan started to lift the state of emergency in some prefectures.
The U.S. experienced devastating winter storms that led to power outages in several states, most notably in Texas, and these negatively impacted economic activity in these states.
A global shortage in semiconductors exacerbated disruptions in the U.S. manufacturing sector.
A protectionist stance by President Biden who kept tariffs on aluminum from the United Arab Emirates added to the supply chain worries, but a U.K. push to join trade agreements such as Trans-Pacific Partnership successor was encouraging for global trade.
In other news, renewed political turmoil in Italy ended with Mario Draghi being appointed as the new Prime Minister.
Monetary policy in the U.S. remained unchanged, apart from Central Bank’s commitment to continue to provide support for the recovery.
The $1.9 trillion fiscal stimulus package was passed by the Senate despite fears of throwing more borrowed money at an economy that is expected to be running hot in summer. The proposed federal minimum wage increase seems increasingly less likely to be passed by the Senate, after the parliamentarians ruled that it cannot be included in a budget reconciliation bill. inflation
In Nigeria, the Federal government approved a new Medium Term Debt Management Strategy for the period 2020-2023.
In line with the Debt Management Office’s previous practice, the new strategy reflects the global and local economic impact of the COVID-19 pandemic and incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework (2021-2023).
The Debt Management Office also hinted at the possibility of exploring funding from the Eurobond market.
However, this will only be done after all the other concessionary sources have been exhausted. Also, in the month under review, Nigeria established its infrastructure company, InfraCo. The board of InfraCo will be chaired by the Governor, Central Bank of Nigeria (CBN) and will include the Managing Director, Nigeria Sovereign Investment Authority (NSIA); President, Africa Finance Corporation (AFC); representatives of the Nigerian Governors Forum; Ministry of Finance, Budgets and National Planning, and 3 independent directors from the private sector.
Inflation.
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