In Colombia, economic growth is rebounding after two years of poor performance, but several sectors are still lagging behind and investment is still weak. Attention is now turning to the 2026 parliamentary and presidential elections, which could lead to major shifts in economic and fiscal policy. The next administration will inherit a record-high fiscal deficit and a rapidly rising public debt. With the fiscal rule suspended for three years, it will need to act quickly to lay the foundations for fiscal consolidation before investor confidence is eroded further.
The gradual stabilisation of the Egyptian economy is ongoing, driven by the restoration of foreign currency liquidity, even though the pace of reforms has been uneven. The rebound in activity, bolstered by household consumption, has exceeded expectations, despite a restrictive fiscal and monetary environment. The decrease in inflation appears to be sustained and should allow for continued monetary easing in the coming quarters. The outlook for foreign currency liquidity is positive, thanks in particular to substantial financing from bilateral and multilateral creditors. The public finance landscape is more complex: consolidation efforts are genuine, despite the slow pace of some reforms, yet the interest burden continues to be a significant source of vulnerability
The Moroccan economy continues to gain momentum. Largely unaffected by the tightening of US tariff policy, it has recorded solid GDP growth since the beginning of the year. Domestic demand is strong, driven by investment. Despite headwinds in the automotive sector, macroeconomic risks are contained, and the economic outlook is positive. However, current social pressures could have a negative impact on public finances, which have remained under control until now. Improved financing conditions should enable Morocco to cope with any deterioration.
Following PwC in June, the ECB presented its own assessment of the costs of a digital euro for banks in the Eurozone. Thanks to extensive cost synergies, their initial investment over the first four years, estimated at EUR 18 billion by PwC, would, according to the ECB, be within a more modest range (between EUR 4 and 5.77 billion). But this amount, which has attracted a lot of attention, is not the only issue at stake, as the recurring cost of replenishing banks’ reserves with the Eurosystem could, in the long term, weigh more heavily on financing conditions.
The latest economic news.
Responding to tangible signs of tension in the money markets, the Fed announced the end of its QT effective on December 1. In line with its operational framework, the Fed will maintain the size of its balance sheet for some time. Subsequently, to ensure its supply of reserves remains at a sufficiently “ample” level, it will increase it again. However, the Fed should be more cautious.
Against all odds, Argentine President Javier Milei’s party emerged victorious in the 26 October midterm elections, despite suffering an electoral setback less than two months earlier. What was behind this turnaround, given that the economic and social situation has deteriorated significantly since the spring? Will the easing of tensions on the peso and the risk premium be enough to avoid a recession? Will US financial support be enough to avert any risk of default on foreign debt?
The Fed eased its monetary policy, with two expected announcements: the end of the central bank's balance sheet reduction process from 1st December; and a second straight cut (-25 bp) in the Fed Funds target, without unanimity, bringing it to +3.75% - +4.0%, due to downside risks in the labour market. We anticipate a further 25bp cut in December, driven by the Fed's bias towards employment and downward revisions to our inflation forecasts for the coming quarters. However, this easing cannot be taken for granted, as J. Powell insisted on keeping options open ahead of the upcoming meeting.
The unexpected element lies in the (highly likely) lack of surprises. The suspense surrounding the outcome of the FOMC meeting on 28-29 October and the ECB meeting on 30 October is, in reality, quite limited: a further 25 bp cut by the Fed and a continuation of the stance for the ECB are expected. In doing so, by narrowing the gap between policy rates and the extent of restriction in US monetary policy, the Fed's stance is aligning more closely with that of the ECB rather than moving away from it. Such a simultaneous lack of suspense for both central banks is uncommon, especially given the overall economic environment, which remains fraught with uncertainty.
The public debt ratio is rising again in the Eurozone, while its equivalent for non-financial companies (NFCs) is decreasing. The October 2025 Fiscal Monitor of the IMF forecasts that the public debt ratio will increase by 5 points of GDP in the euro area by 2030 compared to its 2024 level (87.2% of GDP, compared to 83.6% in 2019). Against this background, the debt of non-financial companies reached its lowest level since Q3 2007 in Q2 2025, at 66.6% of GDP.
Anxious relief, such was the mood in Washington DC last week during the Annual Meetings of the International Monetary Fund (IMF), from official and private sector participants alike. Relief that the global economy, and all its regional parts, are doing much better than expected in the Spring despite the US tariff shock. Anxiety that underneath the recent benign economy and markets, tectonic shifts are underway, still in their early stages and poorly understood.
Low in fat, high in fibre, with a large proportion of fruit and vegetables: in terms of health, the virtues of the Mediterranean diet are well-established, but what about in economic terms? For the past decade, the countries of the Economic and Monetary Union (EMU) forming the Mediterranean ‘arc’ (France, Italy, Spain, Greece) have been following a similar diet, aiming to improve their competitiveness. We take a look at this in our Chart of the week.
Modernity sometimes conceals, under new guises, a return to old precepts: a currency backed 100% by the safest assets, bank deposits guaranteed by tangible reserves, the search for unfailing financial stability. Stablecoins (digital tokens backed by highly safe and liquid assets) are part of this logic. However, in our modern economies, banks only keep a small fraction of deposits in reserve with the Central Bank: this is the principle of "fractional reserves" which gives them the ability to create money (the remaining deposits can be allocated to credit). Beyond the intellectual interest that they attract, stablecoins raise a broader question: if their use were to become widespread, would they not risk making it more difficult to finance the economy?
At a time when central banks are navigating between persistent inflation, economic slowdown, and unprecedented structural challenges, their room for maneuver has never been so closely scrutinized. Should they lower rates to support growth, maintain them to anchor inflation, or raise them in the face of unexpected shocks? Between balancing acts, threats to their independence, and regional divergences, the choices made by central bankers will shape the economy of tomorrow.
What are the common challenges and differences between the Fed, the ECB, the Bank of England, and the Bank of Japan? How are AI, climate change, and geopolitical tensions reshuffling the deck?
Why might the Fed cut rates despite stubborn inflation? What card will the ECB play in the face of a fragile European recovery?
After historic increases, lending rates for households and businesses are calming down. Should we expect a return to normal?
After the major upheaval of ‘Liberation Day’, the dust has settled somewhat. The level and scope of the new US tariffs are now largely known, and advanced economies are continuing to show resilience. Despite significant fluctuations in trade in the first half of the year, global trade has been braodly unaffected so far. The combination of headwinds (US tariffs, uncertainty) and tailwinds (low oil prices, Fed rate cuts, European measures) explains the gradual nature of the slowdown (in the US) and the recovery (in the Eurozone). The Eurozone is doing relatively well: with growth expected to strengthen and inflation under control, it is escaping the stagflationary scenario seen in the US, the UK and Japan.
US tariffs rose sharply in two stages: first in April, then following the signing of multiple trade agreements this summer. The impact of the first stage of this tariff increase is well known: trade flows to the United States were severely disrupted. However, global trade remains dynamic, particularly in Asia (a structural phenomenon) and Europe (which should benefit from internal momentum with the rebound of the German economy). The restructuring of trade flows (already underway with the rise of China) could accelerate as different countries seek elsewhere the opportunities lost in the United States.
