If Congress cannot agree to raise the government's borrowing limit, the repercussions could derail a fragile recovery in the euro zone, exaggerate an ongoing slowdown in developing countries, and serve as another reminder of how dependent the rest of the world remains on the American economy, economists and analysts said.
This week the lira firmed further to about YTL1.32 US$1, notwithstanding stubborn 10% inflation and data releases that underlined the ongoing slowdown in growth.The solid fiscal performance of recent years may worsen in 2007 due to sluggish tax revenues, higher interest costs and some pre-election loosening by the government.
Finally, consumer confidence, while still strong, fell in October for the third straight month, partly out of concern that "the ongoing slowdown in economic growth would begin to raise the rate of unemployment," the University of Michigan's Consumer Survey group said yesterday.
"The recovery in the US and, to a lesser extent, the euro area and Japan, will be offset by the ongoing slowdown in China, low or negative growth in Latin America and only a gradual Russian recovery from its recession this year," said the report's author, Marie Diron.
Retailers are obviously going to feel the pinch from an ongoing slowdown in spending.
"The latest survey provides further evidence of the ongoing slowdown in the UK manufacturing sector, with output and new order growth easing to their second-weakest rates during the past year-and-a-half". said Markit senior economist Rob Dobson.
Now the end of QE may prove pro-cyclical in emerging markets (exacerbating ongoing slowdowns) but is also pro-cyclical or at best neutral in advanced economies (since tightening is occurring amid a continued demand shortfall).
"As Beijing refrains from using stimulus, the ongoing growth slowdown is likely to continue in the coming months," he added.
While China is more likely to have a bumpy landing than a hard one, investors' concerns have yet to be laid to rest, owing to the ongoing growth slowdown and continued capital flight.
This poor performance, of course, is due to China's ongoing economic slowdown.
Crucially, some of the ongoing growth slowdown may be structural in nature.
