Daily Economic Update

US: Consumer confidence drops further with the short-term outlook deteriorating to a 12-year low. The Conference Board’s Consumer Confidence Index dropped for the fourth consecutive month, down to 92.9 in March (100.1 in February), more than a four-year low. This was mainly driven by a plummet in the Expectations Index, which fell to 65.2 (74.8 in February), the lowest reading in 12 years. That index is based on consumers’ short-term outlook for income, business, and labor market conditions, whereby measures below 80 usually signal a recession ahead. Meanwhile, the Present Situation Index also fell, but at a more moderate pace, down to 134.5 (138.1 in February), a six-month low. Importantly, the outlook for the labor market weakened with more people expecting fewer jobs in 12 months while less people expected more jobs. Moreover, consumers’ short-term inflation expectations increased to the highest level in around two years, similar to earlier results from the University of Michigan survey. Fed Chair Powell had recently mentioned that soft-data surveys have not been recently good predictors for economic activity. Nevertheless, given the extent of the deterioration in some of these surveys, especially if that weakness is sustained for several months, it will be hard to predict that hard data will not witness some softening accordingly.    

Chart 1: US consumer confidence index* (index) Source: Haver *The Conference Board

Japan: Bank of Japan governor keeps rate hike options open. BoJ governor Kazuo Ueda, while delivering the semi-annual report to parliament, emphasized a cautious approach to future rate hikes, stating that policy will adjust in line with inflation trends but refrained from giving a specific timeline. The governor also said that persistent inflationary pressures and rising global uncertainties are influential factors in future decisions. Meanwhile, Prime Minister Shigeru Ishiba pledged strong action to counter rising inflation, aiming specifically to alleviate the financial strains faced by households amid surging prices. He also emphasized the government’s commitment to deploy targeted policy measures outlined in this fiscal year's supplementary budget as well as FY2025 draft budget, without significantly increasing overall expenditure. Japan’s inflation remains elevated, despite easing in February to 3.7% y/y from its two-year high of 4.0% in January, primarily on escalating food prices, while core inflation (excl. fresh food) remained above the BoJ’s target since January 2024 at 3.0% during the same month. Sticky inflation could push the BoJ to continue tightening its monetary stance, with the consensus expecting another hike in Q3 this year.

Qatar: Economic growth accelerates in Q4. Economic activity grew 6.1% y/y in Q4 2024, accelerating from 2% in the prior quarter. Robust growth in accommodation & food service activities, financial and insurance activities, and wholesale and retail trade helped push non-hydrocarbon GDP up 6.1% y/y, while the hydrocarbon sector grew 6.2% y/y, the fastest annual increase going back to 2011. For the full year, GDP rose 2.4%, outpacing the 1.2% increase from the previous year as the non-hydrocarbon sector grew 3.4% from 1.1% in 2023. The outlook remains constructive, especially with new LNG capacity expansions coming online in 2026 and as government efforts to boost the non-hydrocarbon economy via measures outlined in the Third National Development Strategy such as boosting public-private partnerships and enhancing the business environment are implemented.  

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