A recent study by US-based business intelligence company Morning Consult found that Chinese economic recovery has been “stalling.”
China
“The Chinese consumer was expected to be at the centre of that recovery this year, but with confidence faltering, domestic demand is unlikely to bounce back as much as projected,” the report said.
It further noted that “while much of the world continues to struggle with elevated levels of inflation, the risk of deflation is becoming serious in China.”
“The country’s central bank has already begun to modestly cut interest rates to stimulate demand, but speculation is rising that Beijing may come to the rescue with some sort of broader economic stimulus package,” it said.
In fact, the organisation’s Index of Consumer Sentiment dropped in June for the first time since December 2022. The 2.1% dip was driven mainly by weakening sentiment in China.
China’s economic recovery looks to be stalling.
— Morning Consult (@MorningConsult) July 14, 2023
The Chinese consumer was expected to be at the center of that recovery this year, but with confidence faltering, domestic demand is unlikely to bounce back as much as projected.
Read more: https://t.co/kEprPbJpvA pic.twitter.com/cMI9N63Atx
United States
Meanwhile, the organisation reported that the US consumer sentiment continued its upward tick in June after a short dip in May, “boosted by a strong labour market and cooling price growth.”
“US adults are feeling better about the direction of the country’s economy as recession risks moderate and the shock from March’s banking crisis fades,” it said.
“The uptick in sentiment was driven primarily by a sharp increase among high-income households, which corresponds with a considerable decrease in the incidence of pay and income losses among this group in recent weeks,” the study noted.
Europe
Europe has also continued to face “considerable headwinds in the form of high inflation and rapidly tightening monetary policy.”
Moreover, while consumer confidence is dipping in Germany and the UK, it is on the rise in the tourism-heavy economies of southern Europe, “which are getting a boost as pent-up demand for travel from the pandemic years results in a flood of visitors to summer holiday destinations.”
China’s overall economic recovery since reopening has been softer than many expected.
— Morning Consult (@MorningConsult) July 13, 2023
Our latest data shows that monthly consumer confidence among Chinese adults has been declining since May. https://t.co/sM1d51VAy3 pic.twitter.com/Qzdi1eJfbo
Russia
In Russia, consumer sentiment rose 2.8% from May to June, a period that also includes the paramilitary Wagner Group’s aborted coup attempt in Moscow.
“The war in Ukraine, Western sanctions, widespread conscriptions and now the Wagner uprising have all failed to make a prolonged impact on the consumer mood in Russia,” the organisation said.
In fact, according to the company’s data, roughly 80% of Russian adults believe that their country is headed in the right direction.