RWI Konjunkturberichte

Global economic growth did not gain pace in the second quarter of this year. On the contrary, the increasing structural problems in emerging markets have resulted in a marked slowdown in the global growth and a worsening of business climate. The weakening in Chinese demand in the first half of 2015 induced a slowdown in international trade, which primarily affected commodity-exporting countries. Furthermore, the slowing in Chinese imports growth was a drag on growth in export-oriented advanced economies such as Germany and Japan. In addition, there are increasing indications pointing to the continuation of the already prevailing downward trend in the growth rates of the Chinese economy, despite its timely implementation of macroeconomic support measures. In contrast to that, the reduction in global production growth in the first six months of 2015 can also be attributed to a number of special factors such as adverse weather conditions or shortfalls in production due to strikes in the U.S., where economic growth resumed in the second quarter and more than offset the previous decline. Despite the increased uncertainty in the outlook for the Greek macroeconomic reform path, the euro area’s economic recovery continued to progress during the first six months of 2015. As suggested by a number of indicators, the cooling of global production growth is expected to continue in the months to come. The latest data on RWI/ISL-Container Throughput Index point to a moderate world trade growth in July, and the first indicators available for China suggest a renewed decline in economic expansion in the third quarter of this year. In contrast, the advancing economic activity in developed countries is exected to have a positive impact on global growth. Despite the forthcoming interest rate hike, the U.S. economy is likely to expand further. The same holds for the crisis countries of the euro area. After a drop in the production in the second quarter, Japan is expected to return to its moderate economic growth in the next three months. In sum, the world GDP (PPP-weighted) is forecast to grow by 3.0% this year and by 3.3% in 2016. The sluggish global expansion remains vulnerable to shocks in a currently challenging world macroeconomic environment. It is thereby of particular importance to achieve a gradual transition of China’s economy to a new domestically oriented and consumption driven growth model. As shown by the recent decline of share prices, the upcoming interest rate hike in the U.S. poses a threat to the global economic outlook. In this regard, the potential risks are associated with massive capital outflows from developing countries and consequent responses of the exchange rates. The potential risks for the euro area arise from the forthcoming Greek government elections in September, which could potentially threaten the agreement achieved during the Greek bailout negotiation process.

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