Global real money growth still solid in October
Simon Ward
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Global six-month real narrow money expansion remained solid in October, judging from data for countries with a combined 60% weighting. Allowing for the typical half-year lead, the money measure continues to signal a revival in global economic momentum from late 2012 into spring 2013.
The global real money growth measure monitored here covers the G7 and seven large emerging economies (the “E7”). It fell sharply between December 2011 and February 2012, forewarning of recent economic weakness – G7 plus E7 industrial output declined by 0.3% between March and September.
Six-month real money expansion, however, bottomed at 1.5% (not annualised) in May, recovering over the summer to reach 3.7% in September – above an average of 3.0% since 2005. October is currently estimated at 3.6% – the final reading will depend importantly on Eurozone numbers released on 28 November.
The global measure continues to be supported by strong growth in the US, while China and Japan rose again last month – second chart. Indian real money, by contrast, is still giving a recessionary message, while a promising revival in Brazil during the first half of 2012 has tailed off more recently.
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