How Bad is the Global Economic Slow Down?

The scale of the previously predicted first quarter global economic rebound has suffered downward revisions as the relapse in US private sector domestic demand has continued

Andy Brunner 15 April, 2016 | 11:35AM

With most revisions now reported, the last three months of 2015 recorded the slowest pace of global growth since the European Union and Japan were both in recession in 2012. From a developed economy perspective this was principally due to a sizeable investment-led slowdown in US domestic demand and a consumption-led contraction in Japan; in the emerging countries, it reflected slower quarterly growth in China and India as well as the on-going recessions in Brazil and Russia.

The scale of the previously predicted first quarter global rebound has suffered downward revisions as the relapse in US private sector domestic demand has continued. Another weak GDP figure, with growth again possibly below 2%, appears in prospect.

But hopes of an acceleration into the spring remain intact with a second quarter – the three months from March to June – rebound to 3% to be led by an upturn in developed market growth, particularly from the US and Japan. With stronger data also due from China and India, emerging markets are also expected to record a considerably better quarter.

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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