Feels like déjà vu

Rising sovereign spreads in t h e e u rozo n e, i n c re a s e d protectionism, higher oil prices, capital outflows from majör emerging countries: warning signals multiplied in the second quarter of 2018. Many of these provoke a feeling of déjà vu, evoking the 2012-13 period. At that time, the International Monetary Fund1 (IMF) stressed that the crisis in the euro area was still relevant, and that rising geopolitical tensions and their consequences on oil prices were among the main risks weighing on global growth. And, although the IMF reminded us that optimism was in order with regard to the American economy, the risks of falling back into recession (“double-dip”) after the brief 2010- 2011 lull made headlines in many countries throughout 2012. World trade was struggling to recover, in part because of continued protectionist measures from 2009 onwards. A little over a year later, massive outfl ows of capital, following communications from the US Federal Reserve (Fed), were penalising some major emerging markets. Admittedly, this comparison is rapidly reaching its limits, as several of these signals are not exactly the same nowadays: the price of a barrel of Brent oil then was close to 110 US dollars (against only around USD 75 in the first half of June 2018), while, at 3%, the yield on a 10-year Italian government bond remains half that it was at the beginning of 2012.