Oil prices, China, rice: The global economy wrap, in charts

livemint.com:

Starting today, Mint’s Plain Facts section will bring out a monthly update on key global economic data to thread together the biggest developments that are worth paying attention to. The accompanying analysis and charts will explain how each story is creating ripples in the global markets, where it is headed in the coming weeks, and how it could possibly impact India. In September, rising oil prices, China’s economic slowdown, and a possible US government shutdown are leading the news.

Prices of crude oil are rising once again as the expectations of a supply deficit have outweighed concerns over low demand. Brent crude oil, which was around $80 per barrel at the beginning of the year, is now hovering over $90 per barrel, after Saudi Arabia and Russia this month extended supply cuts of a combined 1.3 million barrels per day until the end of the year. The move, aimed at propping up prices, came against the backdrop of uncertainty about demand in China, growth in Europe and tightening monetary policy.

While rising crude oil prices will have an impact on the global economy, which is already facing high inflation, import-dependent countries such as India are particularly vulnerable. According to a report by Nomura, every 10% increase in oil prices could increase inflation in India by 25 basis points, widen the current account deficit by 40 basis points and slow down GDP growth by 10 basis points. Three decades of rapid growth have put the Chinese economy prominently on the world map, right behind the US.

But the country is now facing a worrying, and unending, slowdown. The worries grew further after China’s GDP growth in the June-ended quarter came in at 6.3%, lower than the expected growth of about 7%. On a sequential basis,