From The Economist comes news that world GDP growth is, once again, falling led by developed economies where growth in the first quarter of 2013 was close to zero (see next chart).
According to The Economist, world GDP growth was just 2.1% in the year to March 2013, down from 3.1% annual growth the year earlier. Growth is being pulled-down by the 28-member European Union – collectively the world’s second largest economy behind the United States – which is back in recession.
China, which has accounted for roughly half of global GDP growth since the end of 2009, now looks to be decelerating on the back of lower credit growth and rebalancing toward a more consumption-oriented economy. China’s slowing is set to weigh heavily on global growth going forward and harm commodity exporters, like Australia. On the upside, growth in the United States is improving, albeit at a modest pace.
