Global economy shows its resilience

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news of more evidence and expectations that the "impending recession" might be avoided.</p><p>First up today, the IMF has <a href="https://www.interest.co.nz/sites/default/files/2023-07/text%20%283%29.pdf" target="_blank"><strong>raised its global growth forecast</strong></a>. They say the world's economy is expected to expand by +3% in 2023, slightly higher than the 2.8% seen in their April forecast. However, at that level growth still remains weak by historical standards mainly due to the impact of the central bank policy rate hikes aimed at combating inflation. The say they now expect the US to expand +1.8% (up), China by +5.2% (unchanged), India by +6.1% (up), Japan by +1.4% (up) and the EU by +0.9% (up). Neither Australia nor New Zealand get a mention in this latest update. China is now the key risk to global growth, they say.</p><p>The US certainly isn't getting any expansion impetus from bricks & mortar retail sales. <a href="https://www.redbookresearch.com/" target="_blank"><strong>They fell again</strong></a> last week for a third week in a row on a same-store basis.</p><p>But that may just be that corner of retail sales. The widely-watched Conference Board consumer sentiment survey <a href="https://www.conference-board.org/topics/consumer-confidence" target="_blank"><strong>reported</strong></a> something of a surge in confidence in July, up sharply from June which was also a good rise from May.</p><p>And you can see those improvements also in the two Richmond Fed July surveys out overnight, a bit more in the <a href="https://www.richmondfed.org/-/media/RichmondFedOrg/region_communities/regional_data_analysis/regional_economy/surveys_of_business_conditions/service_sector/2023/pdf/svc_07_25_23.pdf" target="_blank"><strong>services survey</strong></a>, but also