Growth moderates further in China



(Bloomberg) –

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China’s economy continues to cool as the country’s real estate crisis deepens, while supply chain bottlenecks maintain a strong grip on recoveries in the United States and Europe.

The resulting inflation is pushing global central bankers, including those at the Bank of England, to tighten monetary policy. Meanwhile, Turkey’s monetary policy committee is taking a different tack – lowering rates when inflation is believed to be transient.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

Asia

China’s housing crisis and power shortages weighed on economic growth in the last quarter, with signs that there will be more pain to come as the country heads into winter and real estate restrictions persist. Gross domestic product rose 4.9 percent in the third quarter from a year earlier, the National Bureau of Statistics said on Monday, up from 7.9 percent in the previous three months.

The slump in the Chinese real estate market has intensified in recent weeks as sales plunge and more developers default on their debt. The 0.08% drop in new home prices in 70 cities in September may be small, but it potentially deals a blow to an economy that relies on real estate-related industries for nearly a quarter of its production.

Asian trade shows few signs of slowing despite fears of weakening global growth, as South Korean, Taiwanese and Chinese exports all hit record highs in September and the outlook is also good. Almost a third of Taiwanese companies’ orders came from US companies, followed by Chinese and Hong Kong companies. Orders from Europe jumped 53% from a year ago.

Supply chain issues holding back global trade weighed on Japanese exports last month as auto deliveries plunged, weakening a key pillar of the country’s economic recovery. Figures from the world’s third-largest economy add to the evidence that supply bottlenecks triggered by Covid are negatively impacting global trade.

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The backlog of ships outside the twin ports of Los Angeles and Long Beach – the United States’ largest gateway for ocean freight – is set to worsen. There are now a record 80 container ships waiting off Southern California, with more coming from Asia. The bottleneck that began almost exactly a year ago shows little sign of easing, according to a Bloomberg analysis of shipping data.

Investors are forecasting a half percentage point hike in Federal Reserve rates by the end of 2022, and they expect some peers in developed economies to have risen several times by then. This is not the outlook central bankers have generally projected over the past 18 months.

Europe

Eurozone companies are reporting a sharp slowdown in activity caused by an aggravating global supply contraction which is also producing record inflation. Private sector activity in the euro area slowed to its lowest point since April.

UK consumer prices accelerated well beyond the Bank of England’s target for a second month, propelled by the global supply chain disruption which pushed up transport costs. Consumer prices rose 3.1% in September after gaining 3.2% the month before, the Office for National Statistics said.

Emerging Markets

Driven by the unorthodox monetary ideas of President Recep Tayyip Erdogan, Turkey’s central bank cut interest rates more than expected on “transitional” inflation, adding that it had room for maneuver limited for further reductions this year. Lira has fallen to an all-time high.

Poles are feeling darker than they have been in six months as inflation rises and the economic outlook darkens. With inflation already at 5.9%, consumers are worried about their ability to save money and make major purchases.

World

According to Bloomberg Economics, this year’s commodity boom will move around $ 742 billion from importers like China and Europe to producers like Russia, Saudi Arabia and the United Arab Emirates.

Consumers around the world are about to face even higher prices on everyday items, companies from food giant Unilever Plc warned this week to lubricant maker WD-40 Co. they are grappling with supply difficulties.

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