China’s National Bureau of Statistics says the country’s latest economic data shows it is well on track to meet its target of 8% economic growth this year. The Chinese economy continues to benefit from the government’s huge economic stimulus package.
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The official data indicates that activity in factories and workshops increased by 16.1% in October compared to a year ago – the highest level of growth since March last year.
Economists say that the stimulus package is underpinning rapid growth in China’s domestic demand, despite still sluggish export orders for its manufacturing sector. Retail sales were higher in October than September.
Eurozone and EU signs of life
The economy of the 16 nations that use the euro collectively grew 0.4% in the third quarter after shrinking by 0.2% in the previous quarter. The French and German economies both grew for a second consecutive quarter, confirming that the eurozone’s two largest economies are out of recession.
The European Union as a whole – which includes non-eurozone countries such as the UK and Sweden – also emerged from recession, growing 0.2% in the third quarter.
Germany’s economy grew by 0.7% in the quarter, while France grew by 0.3%.
However, the UK remains in recession, having contracted by 0.4% between July and September.
Economists caution that the outlook is tempered by high unemployment, lower household spending and the need for fiscal stimulus packages to be gradually reined in.
IEA warns on oil
The International Energy Agency (IEA) has warned that the recent rise in the price of oil ‘risks derailing the recovery’ if it continues. The IEA says that oil demand itself would also rebound much more slowly if the price rises continue in 2010.
The price of oil has risen by 77% this year and is now trading at about $80 dollars a barrel. Some analysts say that a return to oil at $100 a barrel is not far away.
Major production cuts by OPEC over the past year have been the biggest factor between higher prices, the IEA says, which have come despite a persistent overhang in oil inventory in industrialised nations since the start of the year.
The IEA says that world crude consumption is on track to grow in the fourth quarter for the first time since mid-2008, mainly due to increasing emerging market demand.
