China’s economy got off to a flying start this year, starting to rebound from Covid lockdowns while helping to boost global growth.
(Bloomberg) — China’s economy got off to a flying start this year, starting to rebound from Covid lockdowns while helping to boost global growth.
Gross domestic product beat economists’ expectations in the first quarter, bolstered by consumer spending. The International Monetary Fund said that China will be the biggest contributor to global output in the next five years, even as India has overtaken it as the world’s most populous nation.
Argentina raised interest rates by 300 basis points as inflation runs at 100%. Price pressures are still elevated in the UK too, but are rising at about a tenth of that pace.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
Asia
China’s economy expanded in the first quarter at the fastest pace in a year, putting Beijing on track to meet its growth goal for 2023 without adding major stimulus, while also helping to cushion the global economy against a downturn. Gross domestic product expanded 4.5% last quarter from a year earlier, beating economists’ expectations. In March, retail sales soared 10.6% on an annual basis, the most since June 2021.
South Korea’s economy likely skirted close to a recession at the start of the year, according to a Bloomberg survey, as slower global growth stunted exports and renewed currency weakness helped inflate the country’s import bill.
India has overtaken China as the world’s most populous nation, according to United Nations data. India’s population surpassed 1.4286 billion, slightly higher than China’s 1.4257 billion people, according to mid-2023 estimates. India, where half the population is under the age of 30, is set to be the world’s fastest-growing major economy in the coming years.
World
China will be the top contributor to global growth over the next five years, with its share set to be double that of the US, according to the International Monetary Fund. Brazil, Russia, India and China are expected to add almost 40% of the world’s growth through 2028.
Major central banks may be struggling to contain inflation, but they are at least making progress toward another goal: plain speaking. According to research by economists at the Bank of France, people need five fewer years of education to understand a Federal Reserve monetary-policy statement since a review by officials in August 2020.
Argentina’s central bank increased its benchmark interest rate by 300 basis points after annual inflation soared in March and foreign currency reserves slumped, while Uruguay became South America’s first inflation-targeting country to start lowering borrowing costs. The Bank of Namibia deviated from South African monetary policy for the first time this year, and Indonesia left rates unchanged.
Europe
Britain’s inflation rate remained stubbornly high in double digits in March, another surprisingly strong reading that will strengthen the case for more interest rate rises at the Bank of England. The Consumer Prices Index rose 10.1% from a year ago, driven by the strongest increase in food prices in more than four decades.
The European Central Bank is set to deliver three quarter-point increases in interest rates in May, June and July before ending the most aggressive bout of monetary tightening in its history, according to a Bloomberg survey of economists.
Ukraine’s Black Sea crop shipments resumed on Wednesday, following another brief halt that sparked fresh worries about future cargoes from the key exporter. The latest halt — which followed a similar one last week — highlights uncertainty over the grain-export deal that Russia has threatened to quit if its issues regarding its own grain and fertilizers aren’t resolved by mid-May.
US
US workers are starting to see pay gains run faster than inflation, amplifying their purchasing power and giving the Federal Reserve reason to raise interest rates again next month.
In a US housing market warped by sharply higher interest rates, homebuilders possess what buyers crave: inventory. Buyers have begun flocking to builders’ sales offices, where offers of discounts and rate buy-downs are so generous that it’s often cheaper to buy new than pre-owned.
Emerging Markets
Latin American policymakers who led the world into aggressive interest-rate hikes after the pandemic are now warning investors that their battle against inflation will take longer than expected. In both closed-door and public events during a week of high-profile meetings in Washington, the region’s top economic authorities threw cold water over hopes of an imminent end to tight monetary policy.
Ten years after the Rana Plaza garment factory in Bangladesh collapsed, much of the work that began with a burst of reformist zeal remains to be done — throughout South Asia and other garment-manufacturing centers in Latin America and Africa. The economics of the fashion industry remain stacked against the people who make most of the world’s clothes.
–With assistance from Andrew Atkinson, Maria Eloisa Capurro, Prashant Gopal, Tom Hancock, William Horobin, Harumi Ichikura, Hooyeon Kim, Aliaksandr Kudrytski, Cynthia Li, Eltaf Najafizada, Bibhudatta Pradhan, Áine Quinn, Tom Rees, Olivia Rockeman, Zoe Schneeweiss and Alex Tanzi.
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