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The economic performance of various countries in the second quarter has been released one after another recently. Many economies have performed well or even better than expected, bringing some bright spots to the world economic outlook.

Many countries' economies are improving

According to official statistics, China's gross domestic product (GDP) grew by 5.0% year-on-year in the first half of the year, with the GDP growth rate in the second quarter reaching 4.7% year-on-year.

A spokesperson for the National Bureau of Statistics of China said that it is rare for an economy as large as China to achieve a medium-high growth rate of about 5%. In the second quarter, the economic volume exceeded 32 trillion yuan, and the industrial added value and the total import and export of goods exceeded 10 trillion yuan. These total indicators are still very impressive.

The US GDP grew by 2.8% in the second quarter, which not only exceeded market expectations, but also significantly higher than the 1.4% year-on-year growth in the first quarter. However, some analysts pointed out that the US economic data in the first half of the year showed a significant slowdown in economic growth compared with the second half of last year. Under the pressure of high interest rates, US consumer spending and broader economic activities have cooled down.

The eurozone's GDP grew by 0.6% year-on-year and 0.3% month-on-month in the second quarter, also better than expected. Among them, Spain's economy grew by 0.8% month-on-month, France and Italy's month-on-month growth rates were 0.3% and 0.2% respectively, while the traditional "locomotive" Germany's economy shrank.

Japan, whose global economic output ranking was surpassed by Germany last year, saw its real GDP grow by 0.8% month-on-month in the second quarter of this year, and its recovery trend also exceeded expectations.

The economic growth rate of ASEAN countries has accelerated overall. Among them, Vietnam performed the best, with its GDP growing by 6.93% year-on-year in the second quarter, 1 percentage point faster than the previous quarter. In the first half of the year, Vietnam's GDP grew by 6.42% year-on-year.

Thanks to strong household spending, positive labor market conditions, and recovery in exports and investment, Malaysia's economic growth in the second quarter reached 5.9% year-on-year, exceeding market expectations and the preliminary forecast released by the Malaysian government. In the first half of this year, Malaysia's economic growth rate reached 5.1% year-on-year, significantly higher than 4.1% in the same period of 2023.

Risks and challenges remain

Some analysts believe that based on the economic performance of various countries, the world economy may be expected to usher in stable growth. According to the latest forecast of the International Monetary Fund, the global economic growth rate will reach 3.2% and 3.3% this year and next year respectively. According to the World Bank, the global economy will grow by 2.6% in 2024. With the weakening of monetary policy restrictions and the growth of global trade, the growth trend in most regions will gradually strengthen.

However, many uncertainties and instability factors cannot be ignored. First, the "super election year" has a significant impact on the direction of the global economy. According to incomplete statistics from some media, more than 70 countries and regions around the world will hold important elections this year.

Secondly, the intensification of geopolitical tensions has also cast a shadow on the outlook for the world economy. For example, the Red Sea crisis has led to shipping congestion and rising freight rates, exacerbating corporate cost pressures and posing challenges to the growth of international trade.

The British Economist Intelligence Unit released a report in June saying that the global geopolitical environment is characterized by increasing competition and conflict, and geopolitics may impact the existing international economic order.

In addition, the risk of market turmoil related to monetary policy is also increasing. Japanese media believe that the Nikkei index's plunge in early August sounded the alarm for the market, and the "yen carry trade" activity related to the plunge has reached a peak for the third time in the past 30 years. The first two times were in 1998 and 2007, which were believed to be related to the market turmoil before and after the Southeast Asian financial crisis and the Lehman crisis.

By Li Xiaoyu

(Source: National Express)

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