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Global economic data released yesterday and this morning seems to confirm Europe is inching ever-closer to the financial abyss.
The European Central bank cut its predicted growth rate for next year from one per cent to just 0.6 per cent yesterday, whilst June’s UK trade deficit was confirmed as the largest since records began, £4.3 bn. Trade and bank lending data out of China confirmed its economy is still firmly in slowdown mode.
Many Chinese analysts think more urgent actions are required to set its economy on the right course.
XiaoBo, economist at Huarong Securities in Beijing, told the Guardian the required reserve ratio i.e the minimum cash piles for banks, might have to be cut yet again by China’s central bank. “I expect there will be at least one more RRR cut and interest rate cut this quarter,” she said.
Alistair Thornton and Xianfang Ren, economists at IHS Global Insight in Beijing, warned: “The government’s current investment stimulus plan looks woefully inadequate.”
Meanwhile, a statement released by Germany’s economy ministry this morning said its economy now faced “significant risks” due to the eurozone crisis. “The debt crisis in certain euro zone countries is weighing on the economy, sowing uncertainty and caution among companies.”
