Sunday , May 28 2023

Germany, Japan, China, oil signal break in the world economy


The world economy began to skate, endangering the nation 's solid growth if the economic downturn continued.

Japan and Germany's gross domestic product (GDP) declined in the third quarter, and in October China's consumer spending rose at its slowest pace in the past five months. On the other hand, bank loans decreased.

Federal Reserve Chairman Jerome Powell said on Wednesday night, "We have seen a bit of a slowdown but it is not terrible." "worried."

Some isolated events, including typhoons and earthquakes that hit Japan, and production bottlenecks at German automobile factories associated with new emissions regulations, have contributed to these conflicts.

But economists and executives around the world have warned of a common obstacle to growth – the trade war between the United States and China.

Some industries are hampered by tariffs, and fears about the impact of trade disputes are also of concern.

Heidelberger Druckmaschinen, a German engineering company, has recently fallen into the backlog. He stood at the Canadian marina, discussing with his customers how to split the cost of a new tariff imposed by the United States on his way to the United States, with two large presses installed at factories in the United States. Customer did not accept parent account.

A spokesman for Heidelberger Druck said: "We sold our machines to other buyers.

The global scenario contrasts with the US economy, which grew 3.5% year-on-year in the third quarter.

Germany, the European anchor economy, reported that GDP fell 0.2 percent in the third quarter. It dropped for the first time in three and a half years. The eurozone economy grew 0.2%, showing a lower performance in four years.

"The zero-growth month should not cause panic, but at the same time, we are slowing down and there are many unknowns," said Ralph Wiechers, chief economist for the German mechanical engineering industry association.

According to RND's newspaper network, 44% of German companies expect trade tensions between Europe and the United States to grow further.

According to the survey, 41% of the companies surveyed thought that the US and EU would not agree to the transatlantic trade agreement.

Japan's GDP rose by 3% in the second quarter and then fell by 1.2% in the third quarter.

Marubeni, a Japanese trading company, said trade wars hit Gavilon, the US grain sector, after US soybean prices plummeted as soybean sales dropped to China.

In July, China imposed a 25% tariff on imported soybeans from the United States. Marubeni said the food sector's net profit fell 46 percent in the six months to September 30.

The Trump Administration imposed $ 250 billion ($ 942 billion at the time) on tariffs for goods imported from China. We also charged the sector, which includes steel and solar panels. American business partners retaliated.

David Joy, chief market strategist at Ameriprise Financial, said there are signs that the global recession will affect the United States while the US economy outperforms others.

According to him, the slowdown in global economic growth has affected US stocks and oil prices. This could harm US oil producing countries.

"The slowdown in global activity may slow our pace, but it will not have a major impact yet," he said.

Given the current dynamics of the US economy in particular, few economists are predicting the global economic downturn.

US exports have been declining since May, after rising for most of the past two years. But the US economy is still tightening due to low unemployment and consumer spending cuts in 2017.

The increase in public spending, especially the military, is also strengthening demand in the United States.

The United States is somewhat protected against the global economic downturn, which accounts for only 12% of GDP, compared to the world average of 29% or Germany's high index. In other words, when the global economy weakens, US exposure is smaller than most countries.

The Organization of Petroleum Exporting Countries (OPEC) lowered its global economic growth rate from 3.6 percent to 3.5 percent by 2019.

As a result, OPEC can see oil demand declining in price – Brent in Brent fell 25% in just one month from $ 85 to $ 66.

Source: Folha SP

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