The "Big 3" for the world economy are the USA, China and Europe. We have industrial production data for the US and China for December, but not for most of the rest of the world (typically only up to November). PMI/ISM data for January won't be released until tomorrow. This is what IP and the PMI look like up to the end of 2022.
It's worth pointing out that though the year-on-year rate of change of US+China IP is falling, the index itself is more flat than declining. Though it actually peaked in September and has fallen every month since. Because of Covid lockdowns and then the bizarre overnight lifting of all restrictions, it's difficult to tell what will happen to the Chinese economy over the next few months. The markets are convinced that China will pull off a recovery in the classic manner --- a massive stimulus to construction. Given that the Chinese population is declining, and will decline even faster this year (because of massive deaths from Covid), a property-led recovery might not be very strong.
By contrast, as I have frequently argued over the last few months, the US economy is likely to decline over the next year. Europe is likely also to decline, as the ECB raises rates to counter inflation. China's economy is out of sync with Europe and the US.
No comments:
Post a Comment