Friday, January 3, 2014

3/1/2013: BRIC PMIs signal nasty end to 2013

Via Markit Economics:

The above shows the problem with the BRIC grouping: general lack of growth momentum, albeit driven by two different sets of forces.

For Brazil and Russia: domestic economic expansions are starting to fizzle out as debt (Brazil), public spending (Brazil) and consumer spending (Russia) are no longer capable of sustaining previous rates of growth. For India and China, growth is also a challenge, but here core drivers are lack of consumer demand growth in advanced economies (China), too much debt and late stage development of assets bubble (China), reduced capacity for services exports growth (India) and dysfunctional domestic markets (China and India). Note that India's relative outperformance in the group comes on foot of longer and deeper contraction in more recent past.

This is uglier than the Euro area effects when it comes to global growth. Core point is: who will be driving growth around the world in 2014?.. Unless the above momentum is reversed, the answer to that question is: no one in particular...

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