Global economy: More balanced growth - Wells Fargo

According to analysts from Wells Fargo, economic growth will be weaker than what the global economy experienced since the emergence of China as a global growth engine, but they affirmed that the economic environment seems to be more balanced and potentially more sustainable.

Key Quotes: 

“Although economic growth in the global economy remains well off the pace registered during the first decade and a half of this century, it has been solid enough to push central banks of large developed countries outside of the U.S. to start considering their own response to years of extremely expansionary monetary policies.”

“The recovery seems especially significant in the all-important manufacturing sector, with manufacturing PMIs hitting heights not seen in many years. In the United States, the ISM manufacturing index hit 60.8 in September, the highest reading since May 2004 when it was 61.4 and was the highest reading of that cycle. Meanwhile, the Eurozone PMI reading for September was the highest since late 2011, at 58.1. That is, the manufacturing PMI in the Eurozone shows further improvement in the region’s manufacturing sector. Interestingly, what makes this strengthening in the manufacturing sentiment in the U.S. as well as in the Eurozone is that the recovery has not been accompanied by a strong manufacturing PMI in China.”

“Thus, although economic growth in this environment will be weaker than what the global economy experienced since the emergence of China as a global growth engine, the economic environment seems to be more balanced and potentially more sustainable than the environment that existed when China was pulling the strings of economic growth across the global economy.”