Charting the global economy: China’s slump deepens into year end

China’s Covid Zero policy may be ending, but the world’s second-largest economy is going to look worse before it gets better.
Forecasters expect gross domestic product to slow further before picking up in 2023. Chinese residents are increasingly pessimistic about the job market and their incomes, and housing is still broadly unaffordable.
The slump in China carried over to Hong Kong, where exports plummeted in November by the most in nearly seven decades. In South Korea, semiconductor production fell last month by the most since the global financial crisis, speaking to weakening recovery momentum in a nation closely tied to the world economy.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
ChinaBloombergChina’s removal of the last of its Covid curbs will likely bring more disruption to the economy through the first quarter as infections surge, while increasing the possibility of a faster and stronger rebound in growth next year, economists said.
BloombergChinese residents saw their confidence in the job market and their incomes plunge to new lows, while interest in buying homes also fell as the economic slowdown worsened this year. The October-to-December survey added to already-grim data from the third quarter, which also measured weak prospects for jobs and the housing markets.

BloombergPolicymakers have led an unprecedented assault on China’s housing market, but on the key metric of affordability — so central to President Xi Jinping’s “common prosperity” push — the results are mixed. For all the pain inflicted on bondholders and real estate companies, housing remains stubbornly expensive in the world’s most unaffordable market. Homebuyers are questioning whether it was all worth it.

Greater AsiaBloombergHong Kong’s exports plummeted in November by the most in nearly seven decades as a slump in China’s economy and global demand worsened, making the road to recovery even tougher for the financial hub. Overseas shipments plunged 24.1% last month from a year earlier, the worst decline since 1954, while imports declined 20.3% in November from a year earlier — the biggest drop since 2009.

BloombergSouth Korea’s semiconductor production in November fell by the most since the global financial crisis, weighing on the nation’s industrial output and pointing to a further cooling of overseas demand for tech components as the world economy slows. Chipmakers are recalibrating their investment plans as they brace for a drop in demand for their products both at home and abroad.

USBloombergThe US merchandise-trade deficit narrowed in November to the smallest since December 2020 due to a plunge in imports. The shortfall decreased 15.6% — the most since 2009 — on a broad-based decline in imports, which was led by a 13% drop in the value of consumer goods.

BloombergUS pending home sales fell for a sixth month in November to the second-lowest on record as higher borrowing costs and an uncertain economic outlook kept many potential buyers out of the market. The National Association of Realtors index of contract signings to purchase previously owned homes decreased 4% last month to 73.9, the lowest outside of the pandemic in data back to 2001, according to a release Wednesday.
EuropeBloombergAmid a bleak economic outlook, falling real wages and a creaking National Health Service, there’s mounting evidence that the country’s young working age people are suffering from long-term health issues that are keeping them out of work at increasingly alarming rates.
BloombergSpanish inflation slowed for a fifth straight month in December, decelerating by nearly half since mid-year as energy costs continue to decline in the euro zone’s fourth-largest economy.
Emerging MarketsBloombergVietnam’s economy grew at the fastest pace in Asia this year, signaling momentum just before risks from a global slowdown began to materialise. The better-than-expected showing gives Vietnam’s central bank the space to wait-and-watch before deciding to pivot monetary policy away from tightening.
BloombergBrazil analysts raised their estimates for the benchmark interest rate after President-elect Luiz Inacio Lula da Silva got approval for a $32 billion spending plan. The benchmark Selic rate will end next year at 12%, up from a prior estimate of 11.75%, according to a weekly central bank survey published on Monday.
WorldBloomberg2022 saw central banks raise interest rates by the most in a generation and policymakers didn’t disappoint in the final week of the year with Tunisia going for a 75 basis-point hike and and Uruguay increasing by a quarter point.
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