Global growth peaks
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Despite robust Q2 economic growth in advanced economies, momentum is weakening. Global COVID-19 cases are also rising sharply as the more contagious Delta variant spreads. Additional stimulus looks increasingly unlikely and we view pandemic setbacks as the major headwind to the global economy in autumn and winter.
The key takeaways from this edition of Economic Insights are:
- Leading indicators suggest global growth momentum is weakening going into Q3.
- We lower our 2021 US GDP forecast to 6.0% after weaker-than-expected Q2 data.
- The Euro area growth outlook is firm and we lift our 2021 GDP growth forecast to 4.9%.
- Rising COVID-19 cases make pandemic setbacks a key risk to the global economy in 2H 2021.
- We expect inflation to moderate but stay elevated until year end.
- Some central banks begin monetary policy tapering, but the global monetary environment remains broadly accommodative.