Global growth continues to slow
SHORT-TERM TRENDEconomic risks rise as central banks raise interest rates to curb inflation
Economic activity slowed across G10 economies, Central and Eastern Europe, the Middle East, Latin America, Africa, and Asia. In the United States, the PMI that tracks manufacturing and services new orders declined, as did demand for exports. Consumer sentiment also fell. In the eurozone, manufacturing and services PMI trended lower. Manufacturing new orders dipped into contractionary territory, and consumer confidence remains weak across the region. In China, there was a significant decline in economic activity due to Covid-19 lockdowns. China’s PMI indicated a deep contraction. Growth indicators also slowed among Latina American economies.
LONG-TERM CYCLEThis six-year illustration shows stable GDP up until the collapse from the coronavirus pandemic.
Feb '20–April '20The Covid-19 pandemic causes a global economic downturn.
May '20–Dec '21Global growth starts to surge and stays at elevated levels as life continues to normalize.
Jan '22–presentRising interest rates and inflation, and the fallout from the Russia-Ukraine War cuts global growth prospects.
Source: Putnam. Data as of May 31, 2022. We base our Global GDP Nowcast on a tailored methodology that captures daily data releases for the most essential growth characteristics for each of 25 countries — including purchasing managers' index data, industrial production, retail sales data, labor market metrics, real estate price indexes, sentiment indicators, and numerous other factors. The mix of factors used for each market may change over time as new indicators become available from data sources or if certain factors become more, or less, predictive of economic growth.