Global economy survives the China and commodity shocks – so far

Recent turbulence in global financial markets has been widely attributed to fears that a hard landing in China could lead to a sharp slowdown in activity growth in the rest of the world. With global markets likely to be very sensitive to small changes in activity data in the months ahead, activity “nowcasts” should be a particularly useful tool for investors. In this month’s global growth report card, we find little evidence that the feared global hard landing is actually happening, so far at least. According to the Fulcrum “nowcast” models, the global activity growth rate has remained virtually unchanged at around 3.1 per cent this month. This is around 0.4 per cent below the model’s estimate of the long run trend, and is similar to the growth rate recorded since spring 2015.” Advanced economies have continued to grow steadily, with the latest estimate of 1.9 per cent being slightly above trend. The emerging market economies (EMs) continue to struggle, and are currently growing at 4.4 per cent, which is almost a full percentage point below trend. Full blog (VIEW LINK)