Similar financial challenges are weighing on all the world’s major economies: too much debt, asset bubbles bursting, aging demographics, workers struggling to self-support, young people struggling to launch, and leaders all hoping exports will expand to offset domestic weakness. In reality, customers are tapped out worldwide, and lower prices, greater efficiency and debt restructuring are needed to restart—near-term pain is the set-up for longer-term gain.
Wei Yao, head of research and chief economist for APAC at Societe Generale, discusses China’s second quarter GDP and her outlook for the economy. China’s economy grew at the slowest pace since the country was first hit by the coronavirus outbreak two years ago. Here is a direct video link.
As policymakers fret over lagging inflation indicators and tighten financial conditions by the most in decades, demand contraction is widely evident; so far from the peak:
- the economically sensitive Russell 2000 small-cap stock index is -30%.
- the Baltic Dry Index is -64%, and the Dow Transport Index -24%.
- industrial metals index -40%, with copper -36%, silver -31%, nickel -60%, steel -34%, and lumber -56%.
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