China’s GDP on track to being the weakest growth in almost four decades

October 24, 2022

In our Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

China’s GDP rose 3.9% in the July to September quarter but remains on track to deliver among the weakest growth in almost four decades

China released a set of economic figures which had been postponed from the previous week.

Their economy expanded faster than economists expected in the September quarter. Still, the poor performance of the nation’s property market and weak retail and import data underscored the nation’s ongoing growth challenges.

Official figures showed that China's economy grew 3.9% in the July to September quarter from the same time last year, beating estimates.

That marked a pick-up from the 0.4% increase in the second quarter when China’s economy was battered by widespread Covid lockdowns. Shanghai, the nation’s financial centre and a key global trade hub, was shut down for two months in April and May.

But the newly released 3.9% growth rate was still below the annual official target that the government set earlier this year.

Japan made a second intervention this month to stop the Yen from falling

Japanese authorities are likely to have spent more than $30bn last week in their second intervention to stop the Yen from falling any lower.

The intervention took place on Friday after the yen hit ¥151.94 to the dollar, causing it to briefly surge to ¥144.50 during a typically quiet time of the week for trading.

The yen closed around ¥147 on Friday.

The Bank of America estimated after last month’s intervention that the Japanese government, which has $1.3tn in foreign reserves, could execute up to 10 more interventions by selling liquid assets.

The Pound gains as Rishi Sunak leads the race to become Prime Minister

Rishi Sunak, the former chancellor is on course to become Britain’s new prime minister, after Boris Johnson quit the contest on Sunday night.

The Sterling rose on Monday after the risks of further immediate political and economic upheaval receded.

The pound gained 0.3 per cent against the dollar to reach $1.1336 in morning trading in London and advanced 0.6 per cent against the euro to €1.1525.

Is the US heading for a recession?

Most economists now expect the world’s largest economy to tip into a recession in 2023 as job losses mount.

So far this year, monthly job growth has averaged 420,000 positions. Still a healthy clip, which is down from 562,000 a month in 2021.

Inflation, meanwhile, continues to run rampant with volatile items such as food and energy up to 6.6 per cent.

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