(Bloomberg) — Economic growth in China slowed significantly in 2022 from a year earlier as Covid-19 and the government’s response led to the second-weakest performance since the 1970s.
While economists expect activity to pick up steam this year, China is contending with near record-low consumer confidence, a property market in the doldrums and a shrinking population.
Meantime, at the World Economic Forum in Davos this week, central bankers warned against complacency about the fading of the global inflation shock, saying they’ll keep raising interest rates to ensure their job is done. In Japan, however, officials kept their main policy settings unchanged — a surprise to many that caused wide swings in financial markets.
In the UK, consumer prices eased for a second month in December, and a measure of US wholesale inflation fell by the most since the start of the pandemic. Price pressures in South Africa also eased at the end of the year to a seven-month low.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
Asia
China’s economy proved more resilient than analysts forecast as a virus wave swept the nation, suggesting the worst of the slump may be over as a challenging recovery begins. While the 3% increase in gross domestic product last year was the second-slowest pace since the 1970s, fourth quarter and December data came in better than economists expected.
Bank of Japan Governor Haruhiko Kuroda looks set to end his tenure the same way he started it: sending yields careening in the world’s second-largest government bond market. Japan’s benchmark 10-year yield tumbled as much as 14 basis points Wednesday after the BOJ defied some expectations for another shift in policy. The size of the move matches the intraday drop on April 5, 2013, just after Kuroda initiated quantitative easing by pledging to double the monetary base.
India may have already surpassed China as the world’s most-populous nation in a milestone that adds urgency for Prime Minister Narendra Modi to create more jobs and ensure the country sustains its world-beating growth. China’s population started shrinking in 2022 for the first time in six decades, the latest milestone in a worsening demographic crisis for the world’s second-largest economy.
Europe
UK inflation dipped for a second month in December, boosting hopes that the worst cost-of-living crisis in a generation may be starting to ease. Consumer prices rose 10.5% from a year earlier, slower than November and down from a peak above 11% in October. Still, inflation is five times higher than the government’s 2% target.
Britain was in the grip of its worst industrial strife for more than 30 years even before the rail network and postal service ground to a halt over the festive period. Some 467,000 working days were lost to strikes in November, a 10-year high, after a wave of walkouts caused by the most severe cost-of-living crisis in a generation.
Investors’ sentiment for the German economy jumped to the highest level in almost a year, the latest evidence that confidence is building as a squeeze from soaring energy prices eases. Separately, Chancellor Olaf Scholz said he’s sure the country will avoid a recession this year, offering reassurance for Europe’s largest economy as it faces down Russia’s energy squeeze.
US
New US home construction declined for a fourth-straight month in December, wrapping up a disappointing year for an industry that saw annual housing starts fall for the first time since 2009. Separate data showed sales of previously owned US homes fell 17.8% last year, the biggest annual slide since 2008.
Retail sales fell last month by the most in a year and business equipment production slumped, raising concerns that the economy is losing momentum under the weight of tighter Federal Reserve policy.
Emerging Markets
South African inflation slowed to a seven-month low in December, though mounting price pressures including a sharp increase in electricity costs may force the central bank to keep interest rates higher for longer.
World
Angola’s central bank carried out the world’s biggest interest rate cut so far this year as it forecasts inflation to slow further. Policymakers in Belarus also cut, Indonesia hiked, while Japan, Malaysia, Norway and Turkey kept borrowing costs unchanged.
China’s reopening and the resilience of advanced economies provide hope for the world to weather 2023 even if some struggle to grow, according to a panel in Davos on the prospect of a recession. Against a backdrop of gloom within the business world and among forecasters as the World Economic Forum began, speakers at the Swiss resort congealed toward cautious optimism for the global outlook.
The slump in the world’s biggest asset class has spread from the housing market to commercial real estate, threatening to unleash waves of credit turmoil across the economy. Almost $175 billion of real estate credit is already distressed, according to data compiled by Bloomberg — about four times more than the next biggest industry.
–With assistance from Neil Callanan, Arne Delfs, John Liu, Yujing Liu, Prinesha Naidoo, Michael Nienaber, Tom Rees, Garfield Reynolds, Augusta Saraiva, Zoe Schneeweiss, Craig Stirling, Karthikeyan Sundaram, Alexander Weber, Lucy White and Lin Zhu.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
