Last month, the global report card concluded that world economic activity was expanding at a roughly constant growth rate, with a slowdown in the US and China being offset by faster growth in the eurozone and Japan.
In March, these broad trends continued, but the decline in the US growth rate became more pronounced, while Japan also slowed sharply. Chinese activity growth has been stable this month. Overall, the global growth proxy that we use for “flash” monthly estimates (ie the advanced economies plus China) dropped a little in March, causing some concern that the downward momentum in the US may be beginning to dominate the picture.
However, there is much brighter news from the eurozone, where the peripheral economies (notably Spain and, now, Italy, are reporting much firmer growth rates. Furthermore, the UK is still doing very well, and Sweden is accelerating markedly. France is an important exception to this general rule of improving European growth trends.
We will be watching global activity indicators very carefully at the start of the second quarter to determine whether a further and more worrying slide in growth momentum is taking hold. At present, we do not expect this to happen, but we now have somewhat greater concern about the status of the global economic cycle.
Read more
SOURCE: Gavyn Davies – Read entire story here.
