{"id":2614,"date":"2008-07-24T13:23:03","date_gmt":"2008-07-24T13:23:03","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2614"},"modified":"2025-03-27T15:48:40","modified_gmt":"2025-03-27T15:48:40","slug":"global-growth-still-holding-up-but-european-risks-rising","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2614","title":{"rendered":"Global growth still holding up but European risks rising"},"content":{"rendered":"<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">Key themes in my outlook for 2008 were 1) global economic resilience despite the credit crisis, 2) <st1_country-region w_st=\"on\">US<\/st1_country-region> outperformance of <st1_place w_st=\"on\">Europe<\/st1_place> and 3) inflationary risks stemming from the Fed\u2019s excessive policy easing.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">These themes receive support from the IMF\u2019s <a title=\"http:\/\/www.imf.org\/external\/pubs\/ft\/weo\/2008\/update\/02\/index.htm\" href=\"http:\/\/www.imf.org\/external\/pubs\/ft\/weo\/2008\/update\/02\/index.htm\" target=\"_blank\">latest global economic forecasts<\/a>, published last week.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">The IMF now believes world GDP will rise by 4.1% in 2008, up from 3.7% in April. 4.1% is a respectable number by historical standards \u2013 growth averaged just 2.9% over 1990-99.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">Among the major economies, the <st1_place w_st=\"on\"><st1_country-region w_st=\"on\">US<\/st1_country-region><\/st1_place> has received the largest upgrade \u2013 growth is now forecast at 1.3% in 2008, up from just 0.5% in April. This could still be too low, with second-quarter figures next week likely to show annualised growth of 3% or more.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">Meanwhile, average 2008 consumer price inflation has been revised up by 0.8% and 1.7% in advanced and emerging economies, to 3.4% and 9.1% respectively.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">Looking forward, relatively loose monetary policies and solid emerging world momentum should continue to limit global economic weakness. Downside risks stem less from the credit crisis than an inflation-induced squeeze on real incomes.<o_p><\/o_p><\/font><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><font color=\"#000000\">A key issue is whether US and emerging world resilience is offset by gathering weakness in <st1_place w_st=\"on\">Europe<\/st1_place>. Today\u2019s flash PMIs for July&nbsp;show the Eurozone economy was slowing sharply as the second half began \u2013 see chart.<\/font><\/span><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\"> <br \/><\/font><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><\/o_p><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span class=\"full-image-block\"><span><img decoding=\"async\"  src=\"\/storage\/Euroland-GDP-and-new-business.jpg?__SQUARESPACE_CACHEVERSION=1216907511422\"><\/span><\/span><\/p>\n<p class=\"MsoNormal\" style=\"margin: 0cm 0cm 0pt;\"><span style=\"font-size: 10pt; font-family: Arial;\"><o_p><font color=\"#000000\">&nbsp;<\/font><\/o_p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key themes in my outlook for 2008 were 1) global economic resilience despite the credit crisis, 2) US outperformance of Europe and 3) inflationary risks stemming from the Fed\u2019s excessive policy easing. &nbsp; These themes receive support from the IMF\u2019s latest global economic forecasts, published last week. &nbsp; The IMF now believes world GDP will [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2614","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2614"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2614\/revisions"}],"predecessor-version":[{"id":4923,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2614\/revisions\/4923"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}