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World industrial production fell 0.4% month-on-month in August

World industrial production declined 0.4% month-on-month in August, reported the Netherlands Bureau for Economic Policy Analysis (CPB).

Before, it was stagnant (0.0%) in July, unchanged from the initial estimate.

For its part, the boost in world industrial production was 0.3% (not annualized; -0.2% in July, initial estimate -0.3 percent).

The impulse of industrial production calculates the growth in this variable during the last three months compared to the previous three months.

Meanwhile, the volume of world trade increased 0.8% in August 2021, compared to July, when it registered a drop of 1.4%.

Global economy

The International Monetary Fund (IMF) expects world GDP to grow 5.9% in 2021 and 4.9% in 2022 (0.1 percentage point less for 2021 than in the July 2021 World Economic Outlook update).

The downward revision for 2021 reflects a downgrade for advanced economies, partly due to supply disruptions, and for low-income developing countries, largely due to worsening pandemic dynamics.

This is partially offset by stronger near-term prospects among some emerging market and developing commodity exporting economies.

Overall, employment is expected to continue to lag behind the recovery in production.

Beyond 2022, the IMF projects that global growth will moderate to around 3.3% in the medium term.

Output in advanced economies is forecast to exceed pre-pandemic medium-term projections, largely reflecting significant additional policy support in the United States that includes measures to increase potential.

By contrast, persistent production losses are expected for the emerging market and developing economies group due to slow vaccine launches and generally lower policy support compared to advanced economies.

Industrial production

Now GDP growth has been driven by sustained fiscal and monetary policy support in advanced economies and in developing economies with sufficient fiscal space.

At month-on-month rates, industrial production fell in the world’s main economies: in the Euro Zone (-1.6%), the United States (-0.1%), Japan (-3.5%), China (0.4%) and Latin America (- 0.5 percent).

 

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