BLI: Global growth remains resilient despite geopolitical tensions
Global economic growth remains robust despite geopolitical tensions and rising energy costs, note Guy Wagner and his team in their latest monthly market report "Highlights".
Wagner notes that economic activity continued to expand across most major regions. In the United States, second-quarter GDP growth of 1.5% annualised understated underlying economic strength, supported by robust consumer spending and business investment. Eurozone growth also exceeded expectations, with GDP rising 0.4% quarter-on-quarter across all four largest economies. By contrast, China's economy slowed as weak domestic demand weighed on activity, leaving exports and industrial production as the main drivers of growth. Japan also remained heavily reliant on exports, particularly demand for artificial intelligence-related products.
The report highlights renewed uncertainty following the resumption of hostilities in the Middle East, warning that higher energy prices could complicate the inflation outlook. While both the Federal Reserve and the European Central Bank left interest rates unchanged, policymakers signalled that further tightening remains possible. Rising government bond yields and heightened equity market volatility reflected these concerns, with technology and semiconductor stocks retreating sharply after strong gains earlier in the year.