Tipping Points and Sustainable Growth | Sustainability Quarterly | Economists in the News | EM Monthly | Saudi Growth Rotation | Climate Week Preview

Welcome to the latest edition of Essential Economics! We are sustainability and Fed focused this week. ?I was thrilled to publish my paper on tipping points and sustainable growth, arguing for the importance of innovation to reduce the economy’s environmental impact. Our latest Sustainability Quarterly was published with a range of articles on the energy transition and its credit impact as well as critical minerals. US Chief Economist Satyam Panday and I hit the airways appearing on CNBC and Yahoo! Finance to talk about the recent Fed rate decision and the state of the US economy. Our emerging markets (EM) team led by Head of EM Credit Research Jose Perez-Gorozpe and EM Chief Economist Elijah Oliveros-Rosen released their latest monthly report: it’s all about policy rate reaction to the Fed. EM Economist Valerijs Rezvijs writes on the prospects for Saudi Arabia, where he expects non-oil GDP growth to remain solid, fueled by the Vision 2030 boom in consumer spending, tourism, and construction. Finally, I’m looking forward to Climate Week here in New York, and I tee up my appearance on a panel linking nature and physical capital, as well as the entire agenda from S&P Global.

Tipping Points and Sustainable Growth

My paper on tipping points and sustainable growth was published this week as part of our flagship Sustainability Quarterly. In a framework with both physical and natural capital, I show how the existence of tipping points shrinks the set of sustainable growth possibilities.

Sustainable growth is not an oxymoron, but it requires ongoing technological change to limit the environmental impact of economic activity.

To read the report, click here .

I would also highly recommend the entire version of our Fall 2024 Sustainability Quarterly including articles on energy transition scenarios, credit impacts, and critical minerals.

To access the Sustainability Quarterly landing page, click here .

Economists In The News

Satyam and I hit the airways this week to share our view on the Fed’s rate decision and the state of the US economy.

I appeared on Yahoo finance laying out our case for a soft landing and a 25 basis point cut (which turned out to be too conservative). Satyam appeared on CNBC to talk about the rationale for the Fed’s decision to cut by 50 basis points.

To watch my interview on Yahoo Finance Catalysts, click here .

To watch Satyam’s interview on CNBC Capital Connection, click here .

EM Monthly: Reaction To The Fed

Our latest emerging markets monthly is out and it’s all about the reaction to the Fed. The surprise 50 basis point interest rate cut will encourage monetary easing across emerging markets in the coming months.

Markets are pricing in significant rate reductions in Colombia, the Philippines, and Mexico. Conversely, Brazil’s central bank moved in the opposite direction.

A decline in energy prices could further support rate cuts by EM central banks.

To access the chart pack, click here .

Saudi Arabia: Non-Oil Sector

Valerijs expects non-oil GDP growth in Saudi Arabia to remain solid, fueled by the Vision 2030 boom in consumer spending, tourism, and construction. Even if some Vision 2030 projects are downscaled, we expect domestic demand expansion to decrease the oil activities sector's share of GDP to 24%-26%.

After 2030, long-term economic growth prospects and further diversification will depend on increased labor productivity.

To read the full report, click here .

Climate Week Preview

Next week I’m looking forward to Climate Week here in New York. As part of our outstanding program on September 25, I will be participating on a panel entitled “Linking Nature to Physical Capital: Climate Science and Adaptation Planning” sharing insights from my recent macro-climate research.

Check out S&P Global’s climate week event landing page here .

Bonus: For an excellent preview of Climate Week, check out Lindsay Hall’s recent ESG Insider Podcast .

Head’s Up: Next week is a special edition of EE featuring the results of our flagship Credit Conditions Committee forecasting round for the fourth quarter of 2024.

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As always, you can always find the latest research from the S&P Global Ratings Economics team here .