Global Growth Held Back By Becalmed China

Of the three global economic growth engines, only the smallest - India - is at full throttle


 
The threat of global recession in 2023 continues to recede (slowly), as June Sales Managers Survey data shows the USA and Indian economies well into in positive territory. But economic activity in China continues to tread water, holding back what would otherwise be a positive picture of recovery.


The three great engines of economic growth in recent years (China, the USA and India together) have provided close to 60% of all global growth over the past decade, so their steady recovery from the dire straits of Covid is good news. However growth overall has been modest in 2023 to date, particularly in China, previously the biggest contributor.

All global sales related Indexes remained above the crucial 50 "no growth" line in June. But by far the most promising Survey results came from the Indian economy, now moving ahead at some speed. The Chinese economy appears still in recovery mode, with 43% of companies reporting continuing lockdown related problems. And growth in the US economy appears, unsurprisingly, to be being held back somewhat by the recent interest rate rises.

It's too early to suggest that the possibility of global economic recession in 2023 has been entirely banished. But there is no doubt that China has been the primary motor of global growth over the past four decades, so the very hesitant revival of economic activity in China is a negative sign for growth expectations in the remainder of 2023.

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