China, US economy influencing: Official

 THE two economies which affect other economies around the world are China and the United States, an economist says. 

ANZ South Asia, ASEAN and Pacific chief economist Glenn Maguire said the Chinese economy was slowing down whereas the US was increasing its consumption sector.  

“There are two key trends which are occurring in the global economy at the moment and they should be off setting each other,” he said.

“If we think that China and the US are roughly the same size, then the lead up to the global economy is positive.”

Maguire was addressing a business breakfast in Port Moresby on Tuesday.  

“China and the US are roughly the number 1 and 2 in the global economy at the moment,” he said.

“Within China, its investment, industrial production, manufacturing are slowing – that’s 50 per cent of Chinese GDP. 

“That’s the big drag on the commodity prices.

“In the US, we have consumption which is starting to pick up. And consumption in the US is 70 per cent of GDP. So that starts to tilt the balance of global economic growth more towards and improving growth backdrop rather than a slowing one.”

However, he said generally, economies around the world were facing challenges as a result. 

“First is the very sharp drop in the commodity prices which occurred since late 2014. 

Oil has dropped below US$100 (K292) per barrel round to about US$45 (K131) at the moment.