The latest data generally suggest that growth will be positive but unspectacular in the second half of this year. Survey indicators point to a potential slowdown in world industrial production and trade. But the US is still performing relatively well despite fears about its labour market. Meanwhile, China’s growth has stabilised and should gain some pace as policy support kicks in. We suspect that the latest resurgence of global hard landing fears is overdone. The ongoing gradual decline in inflation around the world should allow the global monetary policy loosening cycle to broaden in the months ahead. But banks in some emerging markets will need to delay further cuts as wage growth remains sticky. And with recession risks limited, we think that central banks can afford to normalise policy steadily rather than aggressively.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.