Positive growth signals continue to trickle out across the globaleconomy. The Eurozone economic recovery has stabilised, havingrecorded its second consecutive quarter of modest growth in Q3.China’s monthly indicators are improving and point to firmer growthtowards year-end. The various UK leading indicators signal a robust andbroad-based recovery. The US economy appears to have weatheredthe US Federal government shutdown with few scars. Our world GDP“nowcasting” estimate, which incorporates the global PMIs, tradevolumes and industrial production, points to accelerating globaleconomic growth in the final months of 2013. This is the general trendwe expect to occur in early 2014 (chart 1). We now expect the globaleconomy to expand by 3.4% in 2014 (previously 3.6%). This is up from2.8% in 2013. The modest downgrade to our 2014 global growthoutlook stems from a slight trim to our expectations for the Eurozoneand Indian economies, due primarily to base effects. There is also anexpectation higher global bond yields generate a slight headwind toglobal growth.
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Commonwealth Bank