For example, when we plot the GDP of the top 20 countries in the world in a nice stacked area chart, we can clearly see that no other country than China has significant positive GDP growth. At this growth pace, it will only take 5 more years before China becomes the largest economy of the world on a country by country basis.
Yes, only 5 years! Because GDP growth may be denominated in percentage terms (which seem to be constant), but those percentage terms accumulate each year to the principal number.
Just imagine this event happening...
In July 2012, China was experiencing a mild slowdown in GDP growth (to 7.2%) and subdued inflation (1.8%). Does this mean the announcement a fiscal or monetary stimulus package will be introduced? If so, when will it be announced?
BeantwoordenVerwijderenI don't know. The yuan is declining versus USD, should be enough.
VerwijderenI think the negative impact of Eurozone debt crisis has taken everybody by suprise. Sales to European Union fell 16.2% percent in July 2012, so maybe the downturn is sharper than expected.
BeantwoordenVerwijderenBack in May 2012, many analysts expected the People's Bank of China to cut interest rates and/or bank reserve ratios. For some reason, no monetary stimulus was announced.
Perhaps the politburo is planning a new fiscal stimulus package instead. However, this might be delayed until November 2012, when the new appointees take office.