Investing.com – Market focus this week was largely attuned to signs that an economic slowdown in China was spreading, fueling fears over the outlook for the global economy.
China’s fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, the National Bureau of Statistics said on Monday, easing to on-year.
That pulled full-year growth down to 6.6%, the slowest annual pace , as faltering domestic demand and bruising U.S. tariffs weighed.
Analysts at Capital Economics warned that China’s economic slowdown looks set to be of a similar scale to that in 2015-16, though there are some significant differences so far, most notably less downward pressure on the yuan and no signs of major capital outflows.
“Against a backdrop of various concerns about other economies, weakness in China adds to reasons to expect a marked global slowdown,” they wrote in a note.
Indeed, the International Monetary Fund (IMF) its 2019 global growth forecast on Monday – its second downgrade in just three months – citing a bigger-than-expected slowdown in China and the eurozone.
The IMF added that a failure to resolve trade tensions could further destabilize a slowing global economy.
“Trade tensions are the most dominant factor for investor sentiment right now and will drive market flows,” said Nick Twidale, chief operating officer at Rakuten Securities.
— Reuters contributed to this report
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.