Global third quarter growth could continue to accelerate despite concerns over the impact of the Delta variant of Covid-19.
Bloomberg Economics’ ‘nowcast’, which brings together hundreds of data points, predicts global GDP will grow by 1.8% in Q3.
It also claims that consumer prices will rise less steeply, as inflation in the US is forecast to peak and then ease after the summer.
Varied picture
The report paints a varied global picture, however, with both the US and China pushing their outputs above the pre-pandemic peak, allowing them to claim credit for driving the global recovery.
Meanwhile the Eurozone, the UK, and Japan are described as lagging.
Running out of steam
An OECD report, reported in the Guardian, presents a less upbeat picture and says the recovery may be running out of steam in the world’s major economies.
A resurgence in coronavirus has depressed consumer spending, according to the report which draws from 38 countries.
It claims that most major economies had passed their 2021 peak levels of growth and while they were still expanding, the recovery in the US and Japan is losing momentum, and parts of Europe and China have also slowed as consumers have become less willing to spend.
The UK, France and Germany are picked out as having seen domestic industries start to stall and trade slip down a gear. The OECD said they had been joined by Brazil and Russia in the slow lane.
Freight issues
Meanwhile, businesses continue to struggle with “unrelenting supply-side bottlenecks and increasing transportation costs,” reports Lloyds Loading List.
This will affect their ability to deliver on consumer demand as economies approach Black Friday and holiday shopping seasons, according to project44 which monitors global freight movements.
Delays
Recent vessel-tracking data reveals substantial year-on-year increases in shipment delay times across most major trade lanes connecting China to the rest of the global economy.
For routes between China and US non-West Coast ports, ship delays increased from 0.6 days on average in July 2020 to 2.44 days in July 2021.
For routes to New York, they were up from 0.96 to 7.29 days, forcing shippers to pass costs on to their customers, causing upward pressure on global inflation.
Greenflation
Reuters reports that ‘greenflation’ is adding another level of cost to operations as they have to deal with tighter environmental regulations that may outlast the costs of Covid-19.
Fund managers say corporate valuations will be affected by stringent new rules to guide the world's transition to a greener future.
