In the latest monthly economic update video for eZonomics, ING senior economist Martin van Vliet highlights the latest economic conditions in the United States, China and Eurozone.
Still in shock
Global financial markets “haven’t yet recovered from the shock waves” created by Federal Reserve chairman Ben Bernanke’s hint that the US would “taper” its quantitative easing (QE) stimulus programme this year, says van Vliet.
Background on the taper is detailed in last month’s update video here and a blogpost on whether the share market’s reaction was “irrational” is here.
However, the recovery in employment in the US is helping keep the overall recovery there “on track”, says van Vliet, “enabling the Fed to indeed start tapering its stimulus programme later this year”.
China and the Eurozone
In China, credit growth has been well in excess of the growth of the economy and van Vliet says authorities appear determined to reign it in.
He says ING still retains its forecast of at least 6% growth for China for the next year.
In Europe, the recession appears to be gradually “petering out”, though the recovery is expected to be slow and uneven.
Elections scheduled in September in Germany, a strong Eurozone economy, present a “clear risk”.