The latest data are consistent with the world economy having recovered a bit more momentum in Q3. Industry has held up well, world trade has shrugged off tariffs, and an AI investment boom is underway in the US. That said, there are prominent pockets of weakness. In China, growth seems to be much weaker than official GDP suggests. And in advanced economies, employment growth has slowed sharply, and consumer confidence remains subdued. So, a Q3 pick-up in global GDP growth is unlikely to mark the beginning of a sustained cyclical upturn. As for inflation, the global headline rate has now fallen close to 2%, although this partly reflects China slipping deeper into deflation – inflation in several DMs has ticked up recently. In the year ahead, the activity and inflation backdrop will justify further interest rate cuts from most central banks.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.
