Group 1 - The core viewpoint of the article is that the South Korean government, led by Lee Jae-myung, aims to achieve a potential growth rate of 3% through a comprehensive economic strategy known as the "335 Blueprint," which includes becoming one of the top three global AI powers and ranking among the top five in national strength [2] - The government plans to launch a "National Growth Fund" worth 100 trillion KRW to support high-end emerging industries, focusing on sectors such as semiconductors, secondary batteries, biotechnology, future vehicles, AI, robotics, and defense [2] - Experts express concerns that while nurturing new technologies is important, addressing structural issues such as low birth rates, an aging population, and mismatches in labor and technology is crucial for sustainable economic development [2]

Core Viewpoint - There is a growing perception among economists that Japan's economy may be experiencing a "supply shortage" due to production capacity not keeping up with orders, contrasting with the government's assessment of demand deficiency [1][2]. Group 1: Supply and Demand Gap - The supply and demand gap is a crucial indicator for assessing economic conditions and price trends, with negative values indicating economic stagnation and positive values suggesting overheating [1]. - The Bank of Japan and the Cabinet Office have reported negative supply and demand gaps in recent years, leading to repeated fiscal stimulus measures aimed at boosting demand [1]. - The Cabinet Office has not declared an end to deflation despite a 3% increase in prices, primarily because the supply and demand gap remains negative [1]. Group 2: Discrepancies in Estimates - Private sector estimates, such as those from Societe Generale and Mizuho Research, indicate that Japan's supply and demand gap has been positive since late 2021 and mid-2022, respectively [2]. - The discrepancy between official and private estimates is significant, with a difference of 14 trillion yen (approximately 88 billion USD) reported for the first quarter of 2025 [2]. - Economists attribute the positive supply and demand gap to severe supply capacity shortages rather than economic overheating, particularly highlighting labor shortages [2]. Group 3: Labor Market and Productivity - The potential growth rate, which reflects supply capacity, is influenced by labor, capital investment, and technological innovation, with labor time decreasing due to reforms [3]. - Labor time in Japan is expected to remain below 2019 levels until 2024, primarily due to policies limiting overtime and promoting paid leave [3]. - The Bank of Japan acknowledges the negative impact of labor shortages on supply capacity, indicating a more severe labor market tightness than what macroeconomic supply and demand gaps suggest [3]. Group 4: Investment and Economic Growth - Insufficient investment in machinery has also hindered economic growth, with Japan's capital investment contribution being only one-eighth of that of the United States since 2020 [4]. - Redirecting retained earnings towards investments in growth areas such as artificial intelligence is deemed essential for economic progress [4].

Group 1 - The article discusses the "three-phase overlap" theory and its implications for China's economic transformation, emphasizing that macroeconomics is closely linked to national development and people's lives [1] - The government work report highlights the focus on expanding domestic demand, with Jiangsu's retail sales of consumer goods increasing by 5.6% year-on-year in the first quarter, driven by consumption policies and market integration [1] - The shift from "world factory" to "world market" is illustrated by the comparison of import and export data during the 14th Five-Year Plan, showcasing economic resilience and the impact of an open economy on macroeconomic growth [1] Group 2 - The discussion on "high-quality development stage macro policy orientation" emphasizes the need for a dynamic balance between stabilizing growth, adjusting structure, and preventing risks, as seen in the coordinated development in Nanjing's Jiangbei New Area [2] - The importance of understanding macroeconomic analysis from a holistic perspective is highlighted, indicating that economic insights should be derived from data trends that reflect people's livelihoods and openness [2]

Core Viewpoint - The Governor of the Bank of England, Bailey, emphasizes the need for stable and sustainable growth while aiming to increase the potential growth rate [1] Group 1 - The Bank of England will study the steepening of the yield curve during quantitative tightening (QT) [1] - There are no issues with the volatility in the UK bond market [1] - The pace of actively selling bonds is a matter that requires real-time decision-making [1]

Core Viewpoint - Morgan Stanley indicates that a reduction in immigration will impact the U.S. labor force participation rate, potentially leading to a "chilling effect" on the participation rate of foreign-born individuals [1] Group 1: Labor Market Impact - The reduction in immigration is expected to lead to decreased working hours and may affect overall labor force participation [1] - If the average overall participation rate declines, the employment growth breakeven needed to maintain a stable unemployment rate will be lower [1] Group 2: Economic Growth Projections - Analysts estimate that the potential growth rate of the U.S. economy will decrease from approximately 2.5%-2.7% during 2022-2023 to 2.1% [1]

The RBA Observer Multi-Asset Expect a 25bp cut in May Global backdrop plays a bigger role Paul Bloxham Chief Economist, Australia, New Zealand & Global Commodities HSBC Bank Australia Limited paulbloxham@hsbc.com.au +61 2 9255 2635 Jamie Culling Since the RBA's board last met, the global economy and financial markets have had tumultuous times. The cause has been the 'Liberation Day' trade policy shock on 2 April, and the almost daily shifts in the global trade policy environment since then. As we see it, th ...