Charting the Global Economy: Growth Moderates Further in China
China’s economy continues to cool as the nation’s housing slump intensifies, while supply-chain bottlenecks are keeping a tight grip on the recoveries in the U.S. and Europe.
The resulting inflation is pressuring global central bankers, including those at the Bank of England, to tighten monetary policy. Meanwhile, Turkey’s Monetary Policy Committee is taking a different tact -- cutting rates amid views that inflation is transitory.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
China’s housing slump and electricity shortages dragged down economic growth last quarter, with signs there will be more pain to come as the country heads into winter and property curbs remain. Gross domestic product expanded 4.9% in the third quarter from a year earlier, the National Bureau of Statistics said Monday, down from 7.9% in the prior three months.
China’s housing market slump has intensified in recent weeks as sales plunge and more developers default on their debt. The 0.08% drop in new-home prices across 70 cities in September may be small, but it poses a potentially big blow for an economy that counts on property-related industries for almost a quarter of output.
Asian trade is showing little sign of slowing despite concerns that global growth is weakening, with South Korean, Taiwanese and Chinese exports all at records in September and the outlook strong as well. Almost a third of the orders for Taiwan’s firms were from U.S. companies, followed by Chinese and Hong Kong businesses. Orders from Europe surged 53% from a year ago.
Supply chain snags crimping global trade weighed on Japan’s exports last month as auto shipments plunged, weakening a key pillar of the country’s economic recovery. The figures from the world’s third-largest economy add to evidence that Covid-triggered supply bottlenecks are taking a toll on global trade.
The backlog of ships outside the twin ports of Los Angeles and Long Beach -- America’s largest gateway for ocean freight -- is poised to worsen. There’s now a record of 80 container vessels waiting off Southern California, with more on the way from Asia. The bottleneck that started almost exactly a year ago shows little sign of letting up, according to a Bloomberg analysis of shipping data.
Investors are pricing half a percentage point of Federal Reserve rate increases by the end of 2022, and they expect some developed-economy peers to have hiked multiple times by then. That’s not the outlook that central bankers have generally been projecting in the past 18 months.
Euro-area businesses are reporting a sharp slowdown in activity caused by an aggravating global supply squeeze that’s also producing record inflation. Private-sector activity in the euro area slowed to the weakest since April.
U.K. consumer prices accelerated well beyond the Bank of England’s target for a second month, propelled by the global disruption in supply chains that pushed up transport costs. Consumer prices rose 3.1% in September after a 3.2% gain the month before, the Office for National Statistics said.
Powered by President Recep Tayyip Erdogan’s unorthodox monetary ideas, Turkey’s central bank delivered a bigger-than-expected interest-rate cut on “transitory” inflation, adding that it has limited room left for further reductions this year. The lira slumped to a record low.
Poles are feeling gloomier than they have in six months as inflation surges and the outlook for the economy dims. With inflation already at 5.9%, consumers are fretting about their ability to save money and make major purchases.
This year’s commodity boom will shift about $742 billion from importers like China and Europe to producers such as Russia, Saudi Arabia and the U.A.E., according to Bloomberg Economics.
Consumers around the world are about to get socked with even higher prices on everyday items, companies from food giant Unilever Plc to lubricant maker WD-40 Co. warned this week as they grapple with supply difficulties.
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