Global real growth momentum tends to decelerate as an economic recovery gains in maturity.
Boom / bust indicators show powerful recovery momentum surges in both 2009 and 2010,
but growth did decelerate persistently and substantially from there when measured yr/yr and
seemed destined to start courting contraction as late as Jul. 2012. Global PMI
The global leading indicator, based on new business order flows and sensitive materials
prices, turned more positive in Aug. of last year. Its momentum suggests an end to the
deceleration of real growth, but the pick up in momentum so far has been modest and needs
to firm up further to support the profits growth acceleration which is currently being
discounted by the world's major stock markets. Moreover, with a number of countries now
employing QE programs by their central banks, global demand should strengthen enough to
support a revival of trade to avoid the development of conflicts centered around
accusations of deliberate currency devaluation which can ultimately undermine economic
stability. A substantial re-acceleration of global trade is needed as an important safety
valve in the economic growth equation for 2013.
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