(Bloomberg) – Chinese policymakers have turned off a sweeping economic stimulus package aimed at boosting demand and preventing the world’s second-largest economy from sliding into a deflationary spiral.
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The People’s Bank of China has lowered one-year loan interest rates and eased regulations on second home purchases. The government also issued cash handouts to some unemployed graduates and launched new subsidies, while the Politburo vowed to increase fiscal spending to stem the fall in real estate prices.
Below are some of the charts published this week in Bloomberg on the latest developments in the global economy, markets and geopolitics.
Asia
The booming market reaction to this policy blitz suggests that the People’s Bank of China has bought valuable time for the Chinese economy. But economists say this is just a matter of time if President Xi Jinping intends to pull the roughly $18 trillion economy out of a protracted recession marked by a collapsing real estate market, low consumer prices and rising global trade tensions. I think it’s just a down payment.
The People’s Bank of China has cut interest rates on one-year policy loans to record levels and launched a sweeping program to restore confidence. The People’s Bank of China cut its medium-term lending rate from 2.3% to 2%, the biggest reduction since the bank began using financial tools to guide market interest rates in 2016.
India’s gold demand is expected to remain strong in the world as the world’s second largest consumer of precious metals, in addition to lower import taxes, and purchases are expected to be stimulated during festivals and wedding seasons. is.
us
The Federal Reserve’s recommended indicators of the underlying trends in U.S. inflation and household spending rose slightly in August, confirming the weakening of the economy. On a three-month annualized basis, the core personal consumption expenditure price index rose 2.1%, in line with the central bank’s target.
The U.S. economy has emerged from the pandemic stronger than previously expected, largely due to increased consumer-driven growth supported by strong incomes. The Bureau of Economic Analysis’s comprehensive annual update also showed that gross domestic income for the first half of the year was revised upward to support household spending.
With prices down 19% from their 2022 peak, the commercial real estate market is starting to regain some steam. That’s partly because lenders and owners are looking to cut losses and make new investments now that the Fed’s first interest rate cut in four years has brought some clarity to the current state of valuations.
Europe
The Swiss National Bank cut borrowing costs by a quarter of a percentage point at its third consecutive meeting and warned that further measures would be taken if necessary to keep the franc’s strength in check. The central bank, which boasts the world’s lowest interest rates, has limited room to continue lowering interest rates even if the conflict with the foreign exchange market becomes prolonged.
Inflation rates in France and Spain have fallen below 2%, raising expectations among investors and economists that the European Central Bank will accelerate the pace of rate cuts.
emerging market
Mexico lowered its borrowing costs for the second consecutive time at a meeting on Thursday, as inflation fell faster than expected and the economy headed for a third straight year of weak growth. Banxico officials expect the inflationary environment to allow for further reference rate adjustments.
Zambia’s economy is poised to grow at its fastest rate in 13 years by 2025, as it recovers from the worst drought in more than 100 years.
world
Australia kept interest rates on hold, while the Swedish National Bank cut borrowing costs and raised the possibility of even bigger measures in coming months. Hungary, Switzerland, the Czech Republic and Guatemala lowered interest rates, while Morocco left them unchanged. Nigeria implemented a surprise half-point hike to curb inflation, support its currency and attract investment.
Israel has stepped up its heaviest airstrikes on Hezbollah targets in Lebanon after the militant group shot down its first-ever missile in Tel Aviv. The United States, Europe and Arab countries are working to quell the escalating fighting and prevent an Israeli ground attack on Lebanon that would likely involve heavy human and economic costs. Such a scenario risks escalating into a regional war, drawing the US and Iranian governments directly into conflict.
China fired an intercontinental ballistic missile into the Pacific Ocean in what is believed to be the first public test in about 40 years, a move likely to upset the United States, which is trying to sway world leaders at the United Nations General Assembly.
–With assistance from Maya Averbuch, Bastian Benrath-Wright, Matthew Boesler, Jackie Cai, John Gittelsohn, Philip Glamann, Sybilla Gross, Jon Herskovitz, Matthew Hill, William Horobin, John Liu, Zheng Li, Daniel Ten Kate, and Henry Meyer. Taonga Mitimingi, Atul Prakash, Alex Tanzi, Alex Vasquez, Fran Wang, Alexander Weber, Natalie Wong, Heng See.
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