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The country's domestic demand in the first half of the year was enough to support 9% growth, according to Louis Kuijs of the Royal Bank of Scotland, but weak exports sapped the economy's momentum.In this section Limiting the fallout Missing the mat My generation ReprintsThis export weakness owes something to the strength of China's currency.
Aslam said protein producers could see their prices fall as export markets weaken due to the worldwide credit crisis but the drop in grain prices will help offset the export weakness.
China doesn't have a big enough middle class of free spenders to offset export weakness there (see my May 19 column, "Chinese Chance"), and the end of the oil boom will slash Middle East economic growth and hobble the petroleum-addled dictators of Venezuela and Russia.
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Expansionary fiscal policies throughout the region and effective if in some cases belated financial-sector support offset the export and investment weakness.
And while the rise in exports of goods was helping to offset that weakness, exports compose only about 9.6 percent of the country's gross domestic product.
The government said exports were "showing weakness" and production was flat.
Recent economic data has been mixed, with manufacturing and exports showing significant weakness but consumer spending and confidence on the rise.
Despite the dollar's weakness, exports fell.
The problem for Krugman is that a secularly stagnating Europe is exporting much of that weakness abroad through a weak euro, which supports their own economy through boosting their exports but causes problems for producers overseas.
Assessing the relative importance of China's eroding long-term competitiveness and the short-term weakness of export markets is the subject of considerable disagreement among economists.
Many economists expect the strength in the domestic economy to offset weakness in export sales and in the US energy sector, which has been slashing investment in response to the plunge in energy prices.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com