April 21, 2024

Charting the global economy: UK, Japan fell into recession at the end of 2023

The UK and Japan both fell into recession at the end of last year, marked by two consecutive quarters of contracting activity.

While the euro area is expected to avoid a downturn, the European Commission still sees the bloc growing slower than initially forecast this year. And in Australia, the unemployment rate climbed to the highest level in two years, consistent with expectations for its economy to soften.

Meantime, US consumer prices jumped at the start of the year, though economists maintain that inflation is still broadly on a downward trend.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, geopolitics and markets:


The UK slipped into a mild recession in the second half of 2023, showing Prime Minister Rishi Sunak has so far failed to meet his pledge to grow the economy. While the economy still grew 0.1% across the year as a whole, it was the slowest annual expansion the UK had seen since 2009, excluding the first year of the pandemic.


The euro-area economy is entering 2024 on a weaker footing than previously expected, according to new European Union forecasts that anticipate another year of subdued growth. Gross domestic product in the currency bloc will accelerate only slightly to 0.8% this year after 0.5% in 2023, the European Commission said.


Manufacturing output in Europe’s biggest economy has been trending downward since 2017, and the decline is accelerating as competitiveness erodes. The energy crisis in the summer of 2022 was a major catalyst. While worst-case scenarios like freezing homes and rationing were avoided, prices remain higher than in other economies, which adds to costs from higher wages and regulatory complexity.Asia


Japan’s economy unexpectedly slipped into recession after shrinking for a second quarter due to anemic domestic demand, prompting some central bank watchers to push back bets on when the nation’s negative interest rate policy will end. Households and businesses cut spending for a third straight quarter as Japan’s economy slipped to fourth-largest in the world in dollar terms last year. The weaker-than-expected result will complicate the Bank of Japan’s case to conduct the first rate hike in Japan since 2007.


Australian unemployment climbed to a two-year high at the start of the year, highlighting the nation’s cooling labor market and bringing forward bets on an interest-rate cut.



Consumer prices jumped at the start of the year, stalling recent disinflation progress and likely delaying any Federal Reserve interest-rate cuts. Prices of food, car insurance and medical care advanced, while shelter costs contributed to more than two-thirds of the overall increase. Outpatient hospital services and pet services both posted record monthly advances.



The US and the European Union are talking about merging a core area of their efforts to engage suppliers of critical minerals in resource-rich nations. Washington and Brussels are seeking to counter China’s dominance of the supply chain for raw materials known as critical minerals, a broad term that includes inputs for electrical vehicles and other green energy technologies.


Donald Trump’s China trade war frayed economic ties between the two global superpowers. His second-term plans risk cutting them entirely. The former president is pitching a 60% tariff on all Chinese imports. That would shrink a $575 billion trade pipeline to practically nothing, Bloomberg Economics analysis shows.


A chunk of the vast fleet of tankers that Russia uses to deliver its crude oil is grinding to a halt under the weight of US sanctions, a sign that tougher measures by western regulators might be starting to have tangible effects on Moscow.


Russia’s central bank left interest rates unchanged for the first time since June, while Romania, the Philippines and Namibia also held steady. Zambia hiked rates to the highest level in almost seven years.

Emerging Markets


Egypt is mired in a grueling economic crisis that’s left its 105 million-plus people gripped by uncertainty, but one thing seems all but assured: another currency devaluation is likely on the way. The timing, though, depends on a range of foreign and domestic issues, with authorities wary of the impact that an accompanying inflation spike will have on an already struggling population.

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