The US economy saw GDP (or gross domestic product) growth of 0.5% in the first quarter of 2016 as compared to the 1.4% expansion in the fourth quarter of 2015, according to data provided by the US Bureau of Economic Analysis. However, this was below the market expectations of 0.7% growth. It was the weakest performance in the last two years. In the first quarter of 2014, the US economy contracted 0.9%.

The weaker movement of the US GDP growth indicates that American consumers controlled their spending and demand also slowed down in the first quarter. The lower manufacturing PMI and the factory output data for March already warned that the first quarter economic growth would be weaker. Most of the manufacturing companies tighten their process as a result of volatile global financial market conditions. The various oil and gas companies reduced their capital expenditure due to lower crude oil prices. These industries saw a massive job cut due to lower commodity and crude oil prices.

Household purchases rose by 1.9% in the first quarter of 2016 as compared to 2.4% in the fourth quarter of 2015. Weaker household spending is one of the major reasons behind the poor performance of GDP, as household purchases account for 70% of the economy.

However, the weekly jobless claims showed a huge improvement for the week ended April 16. The unemployment claims fell by 6,000 to 247,000 claims for the week ending April 16. This was below the market’s expectation of 263,000. Last week’s level was the lowest level since November 24, 1973, when it was 233,000. The fall in unemployment claims indicated that the employers are still positive on the country’s demand outlook.

Mexico

Mexico's gross domestic product rose 2.9% in the first quarter compared with the same three-month period of last year, according to a preliminary estimate released by the National Institute of Statistics and Geography, or INEGI.

GDP expansion was driven by 3.7% growth in the tertiary (service) sector; 3% growth in the primary sector, which includes agriculture and ranching; and 2.2% growth in the secondary sector (manufacturing and construction), the INEGI said in a statement.

The economy, meanwhile, grew 2.5% compared with the fourth quarter of 2015, according to the preliminary figures.

On a seasonally adjusted basis, Mexico's GDP edged up 0.8% compared with the previous quarter.

The secondary sector grew 1.5% in the first quarter compared with October-December 2015, while the primary and tertiary sectors expanded by 1.2% and 0.8%, respectively.

The INEGI first released its preliminary estimate of quarterly GDP in October to give decision makers timely and reliable information on the evolution of the country's economic activity.

In releasing the preliminary data, the INEGI uses economic reports published for the first two months of each quarter, adds available information for the third month and estimates missing figures for that latter month using econometric models.

The Finance Secretariat is forecasting that Mexico's economy will grow by between 2.6% and 3.6% in 2016.

Peru

China's current investment of $22.7 billion in Peru has boosted the Latin American country's gross domestic product (GDP), Peruvian Prime Minister Pedro Cateriano said.

"Chinese investment in Peru has considerably increased our mining production," Cateriano said in a recent interview with Xinhua, citing the Las Bambas and Toromocho copper mine projects as two examples.

"The Las Bambas copper mine, which may be one of the largest such projects in the world, has seen an investment of over $10 billion. The Toromocho project has also seen much success, with an announced expansion costing $1.5 billion," said Cateriano.

"This has made China the foremost investor in our mining sector," said Cateriano.

Besides the two cooper mine projects, a Chinese company is currently exploiting iron deposits in Peru's coastal region of Ica. Mining has become an important pillar of China-Peru trade, which reached $15.5 billion in 2015, despite the international financial crisis.

Bilateral ties between China and Peru are going very well, said Cateriano, adding that a joint commission by the two countries to examine a number of matters is progressing apace.

The exchange of visits by leaders of the two countries have contributed to bilateral relations, "leading to the creation of a mechanism of permanent dialogue to evaluate political, diplomatic, economic and cultural matters," he said.

Cateriano emphasized that China has "not only benefited Peru but all of Latin America. The Chinese economy is so strong that it has an effect on the entire world."

"In my experience as Defense Minister and now as Prime Minister, I have seen (cooperation in) the areas of politics, diplomacy, economy, trade and culture all make significant progress," he said.

"Peru must be grateful for the role that China plays in the economic sphere. However, it is true that some fear a slowdown in China's economy will have a negative impact on all sides," he added.

In terms of future progress, the prime minister said that "there are other fields where I would like to see improved cooperation, such as in the transfer of technology," said Cateriano.

"We have progressed greatly in this area in recent years but I would like China to not just sell us equipment but manufacture them jointly in Peru," he said.

On the upcoming summit of the Asia-Pacific Economic Cooperation (APEC) forum, which is to take place in Lima in November, Cateriano said that "the government of President Humala has paid great attention to the importance of APEC and our policies have followed the priorities set within the bloc."

"Our administration will end its mandate on July 28 and we are seeking to ensure this international meeting will be successful, which most Peruvians also want," the prime minister said.

ASIA

China

In March Chinese leaders detailed the country's 13th five-year plan running from 2016 – 2020 which doubles-down on a long-stated commitment to "double 2010 GDP by 2020”.

The 2020 GDP goal would require annual growth rates of 6.5% to go from a nominal $10 trillion last year to over $12 trillion in 2020. That's the equivalent of adding an economy the size of Switzerland's every year.

China's official GDP data released recently showed growth of 6.7%, boosted in no small measure by a raft of stimulus measures introduced by Beijing that has seen a number of metrics improve dramatically since the start of the year.

Manufacturing activity hit a more-than-one-year high, fixed asset investment and industrial output all improved while real estate statistics indicated stronger investment. Property prices shot up, imports of commodities hit monthly records and bank lending hit an all-time high.

"That is still much slower than the official figures will show but a strong growth rate for a country at China’s income level".

Skepticism about official Chinese growth figures abound, and most peg actual GDP expansion at a much lower clip.

Independent research house Capital Economics' measure of the Chinese economy uses a combination of weighted data including electricity usage, seaport cargoes, floor space under construction and passenger and freight traffic to gauge activity across a wide section of the economy.

According to Capital Economics research, China's GDP growth rates came close to dropping below 4% early last year and again at the beginning of 2016.

But since then growth has picked up markedly hitting 4.8% in the first quarter of the year.

That's the highest since Q4 2014 and according to China economists, Mark Williams and Julian Evans-Pritchard, all but one of the components of Capital Economics' China Activity Proxy showed strong improvement. While passenger traffic was weak it was mostly due to seasonal effects – last year in March numbers peaked because the Chinese New Year fell unusually late in 2015.

The authors of the report expect growth to accelerate further over the next couple of quarters on the back of monetary easing that is already in the pipeline and the ongoing front-loading of this year’s fiscal support.

"We continue to expect growth on our China Activity Proxy to average 5.5% this year. That is still much slower than the official figures will show but a strong growth rate for a country at China’s income level."

India

The International Monetary Fund has retained its growth forecast for India this year at 7.5%, largely driven by private consumption even as weak exports and sluggish credit growth weigh on the economy.

India’s growth momentum is expected to be underpinned by private consumption, which has benefited from lower energy prices and higher real incomes, IMF said and called on the policymakers to speed up the structural reform implementation.

In its latest Regional Economic Outlook for Asia and the Pacific, IMF said weak exports and sluggish credit growth (stemming from weaknesses in corporate sector and public sector banks’ balance sheets) will weigh on the economy.

“India has benefited from lower oil prices and remains the fastest-growing large economy in the world, with GDP expected to increase by 7.5% this year and next,” IMF said.

India remains on a strong recovery path, with GDP growth reaching 7.3% in 2015, the Fund said adding that “India’s growth is projected to strengthen to 7.5% in 2016 and 2017.”

An incipient recovery of private investment is expected to help broaden the recovery. Moreover, higher levels of public infrastructure investment and government measures to reignite investment projects should help crowd-in private investment, it said.

The report noted that policymakers should capitalize on the favorable economic momentum to speed up the structural reform implementation.

“Additional steps in relaxing long-standing supply bottlenecks, especially in mining and power sectors, as well as further labor market reforms to increase labor market flexibility in the formal sector, are crucial to achieving faster and more inclusive growth,” the Fund said.

It further noted that the long-awaited goods and services tax should be implemented, as it would create a single national market, enhance economic efficiency, and boost GDP growth.

Indonesia

Indonesia reported lower than expected growth in the first quarter, but many economists still expect enough of a rebound this year that the country can avoid further slowing and grow more than 5% in 2016.

The statistics bureau said that Southeast Asia's largest economy expanded an annual 4.92% in the January-March quarter, below the median 5.05% in a Reuters poll and the October-December pace of 5.04%.

Growth weakened for the fifth straight year in 2015, to 4.8%, as poor commodity prices, contracting exports, tepid investment and waning consumption produced the lowest growth rate since 2009.

But the economy gained some momentum in the second half of last year as newly-appointed ministers accelerated government spending.

The statistics bureau took an optimistic tone.

"Our start in 2016 is better than the start of 2015," said bureau head Suryamin. "Economic activity almost always slows in the first quarter, especially after growing higher in the fourth quarter.

In the first quarter of 2015, annual growth was 4.73%.

Bureau data showed consumption was stable in the first quarter and there was a rise in government-led investment from a year earlier. However, investment growth was weaker than in the December quarter.

The bureau said a major reason for slower growth was a drought worsened by the El Nino weather phenomenon, which hurt crop output.

Darmin Nasution, chief economics minister, said another reason was slowing loan growth.

Euben Paracuelles, a Nomura economist in Singapore who had projected 5.4% first-quarter growth, said there was "some loss in growth momentum" as he had expected stronger public investment.

"This will raise the question of the sustainability of the recovery, but we would still argue that the recovery will continue, led by domestic demand," he said.

Tim Condon, ING's Asia chief economist, said the lower growth pace in January-March than the previous quarter "is probably a one-off and the economy is in a sort of healing mode but obviously not a straight line path".

Realizing Indonesia cannot still rely on natural resources for growth, President Joko Widodo has worked to expand its weak manufacturing sector.

The Finance Ministry has offered tax incentives and promised a cut in corporate income taxes. It also plans a tax amnesty this year, which it believes will bring in significant funds to help finance development.

The central bank cut its key benchmark rate three times in the first quarter, by a total of 75 basis points.

Also, Bank Indonesia has announced it will use a new benchmark in August, an effort to more effectively get banks to lower lending rates.

Some analysts expects more cuts to the benchmark. Rangga Cipta of Jakarta-based brokerage Samuel Sekuritas said the first quarter growth figure calls for a 50 basis point cut to the benchmark.

Widodo has pledged to get Indonesia's growth up to 7% a year by 2019, the last year of his term.

The government's target for growth this year is 5.3%, while the central bank's latest outlook was 5.2-5.6%.

Philippines

The Philippines has the potential to become a trillion-dollar economy by 2030 if economic reforms are sustained beyond the term of the current administration, a global think tank has said.

“The total size of the Philippines’s economy is projected to grow from $300 billion in 2016 to $700 billion by 2025, becoming a trillion dollar economy in US dollar terms by 2030. This will make the Philippines one of the leading emerging markets in Asia,” Rajiv Biswas, Asia-Pacific chief economist for IHS Global Insight, said in a report titled ‘Can the Philippines Tiger Economy Continue to Roar?’

He said under the current administration, the Philippines saw a rapid GDP growth averaging around 6% per year over 2011-2015.

“If the incoming president and the new Philippines government administration can continue to pursue economic reforms and strengthen institutional governance, then GDP growth of around 6% per year can be sustained over 2016-2020,” Biswas said.

EUROPE / AFRICA / MIDDLE EAST

Eurozone

The European Commission cut its 2016 growth forecast for the euro zone economy.

It now sees euro zone gross domestic product (GDP) in 2016 at 1.6% from a previous forecast of 1.7% growth. It also lowered its 2017 forecast to 1.8% from 1.9%.

European Commissioner Pierre Moscovici told a press conference that there would be "stable growth" this year but that the recovery could be faster.

"European growth is holding up and (that) means that the efforts being made are paying off," he said. "(But) it's time to speed things up," he said.

"European growth is sustained because it is still driven by household consumption whereas investment, which had been lagging behind, but this should recover in 2016-2017," he said.

He said that financial market volatility at the start of the year had not helped the region's economy and that an economic slowdown in China still posed a risk.

For the wider European Union (EU) economy, the Commission forecast a GDP expansion of 1.8% in 2016. However, it said in its report that growth was "expected to remain modest as key trading partners' performance has slowed and some of the so far supportive factors start to wane."

"Very accommodative monetary policy has set the scene for a pick-up in investment by making access to funding easier and cheaper. Fiscal policy in the euro area is expected to be supportive of growth this year. But although oil prices fell again in early 2016 and prolonged the boost to real disposable incomes, the strength of this support should gradually fade as the oil price rebounds," the report noted.

"Similarly, although euro area exports are still benefiting somewhat from the euro's past depreciation, the currency's recent rise could make the euro area more susceptible to the effects of slower external growth."

The European Central Bank (ECB) is the key actor in trying to stimulate growth and inflation in the euro zone with consumer prices falling again in the region in April as data on Friday showed.

The European Commission forecast that the rate of inflation would remain subdued, at 0.2% in 2016.

"It is expected that inflation remains close to zero in the near term as energy prices are lower than a year ago," the Commission said. "External price pressures are also weak amid a slightly appreciating euro and rather subdued global producer prices."

It said that inflation should rise "more significantly" in the second half of this year as energy prices gradually pick up and domestic prices increase on the back of strengthening domestic demand. As such, it forecast consumer price inflation at 1.4% in 2017.

Kenya

Kenya's economy expanded slightly in 2015 by 5.6% compared to 5.3% growth in 2014 but was lower than the 2013 growth of 5.7%.

According to the Economic Survey 2016, the number of new jobs generated in the economy last year stood at 841,600 compared to 799,700 in the previous year.

Agriculture, construction, real estate, financial and insurance were the major drivers of the economy in the period under review.

"Agriculture gross value improved to 6.2% in the period under review from 3.5% in 2014 due to good weather and abundant rainfall that led to improved crop and livestock production. Maize production went up by 9% to 42.5 million bags while sugarcane production increased by 4.6% to hit 6.8 million tons," said Kenya National Bureau of Statistics Director General Zachary Mwangi.

However, tea and coffee production went down by 10.3% and 16% respectively negatively affecting their earnings.

In manufacturing, the sector grew by 3.5% percent in 2015 up from 3.2% recorded in 2014 on the back of reduced production costs due to lower cost of petroleum products and electricity, while construction went up by 13.6% in the period under review up from the 11.4% in 2014 owing to the ongoing construction of the Standard Gauge Railway and road works by both the National and County Governments.

Growth in mining, ICT as well as wholesale and retail trade decelerated during the period.

Tourism is showing an improvement as accommodation and food services went down by only 1.3% compared to previous year decline of 13.6%.

"However, international arrivals went down by 12.6% from 1.35 million arrivals in 2014 to 1.18 million in 2015. Earnings went down by 2.9% to Sh84.6 billion from Sh87.1 billion in 2014. This is attributable to travel advisories from key tourism markets for the country due to security concerns," Mwangi pointed out.

Bed nights also went down by 6.4%, however number of visitors to museums, snake parks and other historical sites went up by 15.6%.

Transport sector output went up by 6.4% to Sh951.4 billion owing to improvement at the Port of Mombasa as well as the railway transport sub sector.

Kenya's trade deficit improved to Sh997 billion compared to Sh1.08 trillion.

Imports went down by 2.5% to Sh1.5 trillion while exports rose by 8.2% to Sh581 billion as Africa remains the leading destination for all exports accounting for 41.7% of total exports.

"Uganda continued to be the leading export destination for Kenya with the exports to her growing by 12.8% worth Sh69 billion in the period under review. Asia continued to rule the imports to Kenya, with imports worth Sh982 billion in 2015," Mwangi explained.

The balance of payments position deteriorated from a surplus of Sh128 billion in 2014 to Sh25 billion in 2015.

During the period, domestic credit went up by 19.2% owing to increased credit to the National government that went up to Sh538 billion up from 424.9 billion.

Credit to the private sector and other public bodies went up to Sh2.2 trillion which was a 17.5% shoot.

Money transacted through the mobile phone went up by 18.7% to Sh2.8 trillion in the period under review. Mobile money transfer services subscribers grew to 26 million during the period under review.

According to the report, Internet subscription increased to 23.9 million from 16.4 million in 2014 while mobile telephone subscription went up to 37.7 million a penetration of 85.5%.

Going forward, all sectors of the economy are expected to continue in their current growth trajectory with the agricultural sector expected to slow down due to long rain depression in some parts of the country.

"Fuel prices are expected to remain around the levels experienced during the first quarter of 2016 and therefore help contain inflation, the shilling is likely to remain stable against the major trading currencies," the report indicates.

Liberia

Higher gold production and a rebound in services and construction will help Liberia's economy grow by 2.5% in 2016 compared to an estimated 0.3% last year, the International Monetary Fund said recently.

In a statement released at the end of a visit by a mission to Liberia, which was battered by a three-year Ebola outbreak, the IMF said that economic growth was projected to stabilize at around 6% over the medium term.

But the 6% growth projection is significantly lower than an earlier forecast of 8% growth, which the IMF said reflected a lowering of the mining sector's investment and production targets.

A significant number of non-performing loans have also hampered the banking sector, the IMF said.

"The economic outlook is set to remain challenging," the IMF said in a statement. "Downside risks are high, particularly in light of the possible deeper-than-estimated second-round effects of the commodity price shock."

Inflation is expected to remain at around 7%.

President Ellen Johnson Sirleaf said in September it would take two years for Liberia's economy to recover from an Ebola epidemic that killed more than 4,800 people in the country and hurt the agricultural and mining sectors.

The West African nation was declared free of the Ebola virus by global health experts in January but suffered a new Ebola death last month.

United Kingdom

Economists forecast first-quarter growth of 0.4%, down from 0.6% in the final quarter of last year

The pressures on the UK economy from EU referendum jitters and a downturn in global trade will be revealed with the publication of official UK growth figures.

Nervous investors and policymakers are also keenly awaiting GDP updates from the US and Eurozone to gauge the scale of a global slowdown that has prompted wild swings on stock markets in recent months and warnings from the International Monetary Fund that governments need to step up public investment to avert a slump.

The UK figures are expected to show a marked slowdown in growth after business surveys pointed to companies delaying spending and hiring ahead of the Brexit vote. Official figures showing a drop in retail sales last week suggested consumers, the main drivers of the UK’s post-crisis recovery, were also cutting back as pay growth flat lines and government spending cuts bite.

Economists anticipate that those factors dented the economy’s overall performance in the first quarter, cutting the GDP growth rate to 0.4% from 0.6% in the final three months of 2015, according to the consensus forecast in a Reuters poll.

Economists at HSBC are more downbeat than the consensus and they forecast the growth rate halved in the first quarter to 0.3%.

“All the signs are that growth slowed in the first quarter,” they wrote in a research note.

They cite last week’s news of a sharp fall in retail sales in March, downbeat surveys from the wider services sector and a drag on the economy from manufacturing and the oil and gas sectors.

Philip Shaw, an economist at Investec, said he is expecting a “mixed picture” from the UK economy.

“On the positive side, our ‘now casts’ suggest that construction expanded by 0.6% on the quarter and services by 0.7%. However, at the same time our estimates are for a 1.0% fall in industrial production, including a 0.5% contraction in manufacturing. Overall this would give us a 0.4% increase in GDP with, if anything, the risks tilted towards a slightly faster pace of growth,” said Shaw.

The Bank of England has warned that growth could slow further in the second quarter as uncertainty about the EU referendum outcome prompts companies to delay investment decisions.

But some economists caution that the pressures on the UK economy go beyond Brexit worries and that there are also longer-standing problems such as low productivity growth as well as headwinds from the global economy.

In the US, the world’s largest economy, growth is expected to have slowed in the first quarter. Economists expect the annual growth rate of GDP to drop to 0.7% from 1.4% in the final quarter of 2015.

The US Federal Reserve raised interest rates for the first time in almost a decade late last year but against the backdrop of global turmoil it has become more cautious about raising borrowing costs further. No move is expected at the central bank’s next meeting but the statement from policymakers “will be scrutinized for signs that a June rate hike remains on the table,” said Chris Scicluna at Daiwa Capital Markets.

The Eurozone caps off the trio of big economy GDP readings soon, and economists expect slightly brighter news from the single currency bloc. Quarterly growth is forecast to have edged up to 0.4% from 0.3% in the fourth quarter.

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