FXstreet.com (Barcelona) - According to FX Strategist Jonathan Cavenagh at Westpac, “While the near term outlook remains quite uncertain, if we look further ahead, the outlook for export growth in China is potentially more positive.” Since the mid 1970s we have seen 3 leadership transition episodes and each episode is typically characterized by either weaker than average growth and greater volatility in growth.
Interestingly though immediately after the leadership transition takes place, we typically see growth rebound. This phenomenon could reflect a number of factors. “Firstly, in the lead up to leadership transitions the focus may shift away from the economy and turn to who will be the next leaders and holders of key government positions. Once this is all in place, the focus shifts back to the economy.” He notes.
Improving economic growth after leadership transitions may also reflect reforms introduced by the new government. Broader cyclical developments in the global economy will also be influential, particularly at the last leadership transition in the early 2000s.
Interestingly though immediately after the leadership transition takes place, we typically see growth rebound. This phenomenon could reflect a number of factors. “Firstly, in the lead up to leadership transitions the focus may shift away from the economy and turn to who will be the next leaders and holders of key government positions. Once this is all in place, the focus shifts back to the economy.” He notes.
Improving economic growth after leadership transitions may also reflect reforms introduced by the new government. Broader cyclical developments in the global economy will also be influential, particularly at the last leadership transition in the early 2000s.
