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The global economic growth rate showed divergence in the first quarter.Houseoffunfreecoins2019The US economy expanded but grew at a slower rate than last year, Europe recovered at a two-speed pace, commodity prices diverged, global financial markets performed steadily and the dollar appreciated.
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[analysis of the global economic situation in the first quarter of 2023Houseoffunfreecoins2019The US economy is sound, Europe recovers at two speeds, and commodity prices diverge.
In the first quarter of 2023, the composite CEEM-PMI index of China's external economy was below the rise and fall line. The US economy continues to expand, growing at a rate lower than in 2023 but still higher than potential growth. The European economy showed a two-speed recovery, the economies of India and Brazil maintained growth, the recovery in South Africa was weak, and the Russian economy showed short-term resilience. The financial market exchange rates of the six ASEAN countries and South Korea are weak, and the stock market performance is strong.
The US economy maintained its expansion in the first quarter, consumption and government spending became the main driving force of economic growth, and domestic private investment gradually played a pulling role in the economy. The Federal Reserve decided to suspend interest rate hikes at its March meeting, and the rate cut is expected to remain the same this year, but there is uncertainty about the timing and frequency of the rate cut.
The European economy showed a two-speed recovery in the first quarter. Eurozone composite PMI rebounded moderately, driven by a recovery in service sector activity, and expanded for the first time since May 2023 in March. However, manufacturing activity in the region remained sluggish, with manufacturing PMI below the boom and bust line for 19 months in a row. Affected by the uneven performance of services and manufacturing, the economic performance of southern European countries is better than that of core countries, forming a two-speed recovery pattern. In the short term, weak trade and a slowdown in private sector spending will be difficult to reverse, and the eurozone economy will remain depressed.
Commodity prices diverged in the first quarter. Metal and energy prices have rebounded due to a pick-up in manufacturing and are expected to rise further. Commodity prices averaged lower than in the previous quarter, mainly dragged down by iron ore, coal and soyabeans. Oil prices showed an overall upward trend in the first quarter, but the quarterly average price decreased from the previous quarter. Metal prices diverged, copper prices rose due to a pick-up in manufacturing, iron ore prices fell due to weaker demand in China's real estate sector, and aluminum prices fluctuated under the uncertainty of supply and demand. The price of international agricultural products (000061) rose compared with the previous quarter, and the increase in feed demand led the price up.
The overall performance of global financial markets was stable in the first quarter. The dollar has appreciated and the currencies of other major economies have depreciated. Risky assets, commodities and gold prices all rose. Us inflation exceeds expectations and the Federal Reserve will not cut interest rates for the time being. The people's Bank of China issued a signal of monetary easing, the rise of the composite index ushered in a "small spring", long-term Treasury yields fell sharply. Global risky asset prices performed well and monetary policy and financial assets in major economies returned to normal. The potential impact of global commercial real estate risks and a long-term economic slowdown is noteworthy.
