Global Economic Analysis: Potential Recession in the Eurozone
Europe
The S&P Global Purchasing Managers' Index fell to 47.1 in November, marking the sixth consecutive month below the 50-point expansion threshold, despite exceeding economists' predictions. Both manufacturing and services sectors reflect a similar trend.
Germany will suspend constitutional limits on net new borrowing for the fourth consecutive year after Prime Minister Olaf Scholz's government was compelled to implement sweeping budget reforms following a recent ruling by the national supreme court. This emergency move to lift the so-called "debt brake" will be part of the 2023 budget revision, expected to be presented by Finance Minister Christian Lindner next week.
Asia
China may have concluded its interest rate cuts as policymakers shift towards alternative measures to support the economy and maintain credit growth stability in the new year.
Initial trade data from South Korea indicates that exports are likely to sustain growth momentum this month, continuing the recovery after a year-long recession. South Korea, a crucial global exporter, plays a significant role as an indicator of the global economic condition through its export performance.
Emerging Markets
Thailand's economic growth unexpectedly slowed in Q3 due to a decline in manufacturing caused by weak exports, supporting the new government's $14 billion cash support program as planned.
Chile's economy expanded more than forecasted in Q3, driven by the mining sector, as the central bank began to ease monetary policy. Gross domestic product increased by 0.6% from July to September compared to the same period last year.
In the prolonged interest rate decisions across Africa, the region's largest economies are expected to maintain higher interest rates for an extended period. Angola and Zambia raised rates this week to curb persistent inflation and stabilize their currencies, with Nigeria also planning an interest rate hike. South Africa maintains the current rate, and other countries including Morocco, Kenya, and Ghana are likely to follow suit.
The S&P Global Purchasing Managers' Index fell to 47.1 in November, marking the sixth consecutive month below the 50-point expansion threshold, despite exceeding economists' predictions. Both manufacturing and services sectors reflect a similar trend.
Germany will suspend constitutional limits on net new borrowing for the fourth consecutive year after Prime Minister Olaf Scholz's government was compelled to implement sweeping budget reforms following a recent ruling by the national supreme court. This emergency move to lift the so-called "debt brake" will be part of the 2023 budget revision, expected to be presented by Finance Minister Christian Lindner next week.
Asia
China may have concluded its interest rate cuts as policymakers shift towards alternative measures to support the economy and maintain credit growth stability in the new year.
Initial trade data from South Korea indicates that exports are likely to sustain growth momentum this month, continuing the recovery after a year-long recession. South Korea, a crucial global exporter, plays a significant role as an indicator of the global economic condition through its export performance.
Emerging Markets
Thailand's economic growth unexpectedly slowed in Q3 due to a decline in manufacturing caused by weak exports, supporting the new government's $14 billion cash support program as planned.
Chile's economy expanded more than forecasted in Q3, driven by the mining sector, as the central bank began to ease monetary policy. Gross domestic product increased by 0.6% from July to September compared to the same period last year.
In the prolonged interest rate decisions across Africa, the region's largest economies are expected to maintain higher interest rates for an extended period. Angola and Zambia raised rates this week to curb persistent inflation and stabilize their currencies, with Nigeria also planning an interest rate hike. South Africa maintains the current rate, and other countries including Morocco, Kenya, and Ghana are likely to follow suit.
