The global expansion is winding down

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news the latest IMF forecasts show that the global economy is 'deteriorating'.</p><p>First up, American <a href="https://www.redbookresearch.com/" target="_blank"><strong>retail sales sagged</strong></a> to a weak +1.5% more than year ago levels in last week's same-store trading, far less than the inflation effect.</p><p>All American eyes are on tomorrow's CPI data which is expected to come in lower at 5.2% year-on-year and at an annualised 2.5% rate from February. If that is the actual; result, it will signal good progre4ss in their fight against inflation.</p><p>In China, <a href="http://www.stats.gov.cn/sj/zxfb/202304/t20230411_1938507.html" target="_blank"><strong>consumer inflation</strong></a> has disappeared altogether. March prices were +0.7% higher than year ago levels and an 18 month low. But they are almost -4% lower than February on an annualised rate basis. That is the second consecutive month of falls. Deflation beckons.</p><p>Deflation is already here for Chinese factories. Their <a href="http://www.stats.gov.cn/sj/zxfb/202304/t20230411_1938508.html" target="_blank"><strong>producer prices fell -2.5%</strong></a> from year-ago levels, the sixth straight month of retreats. In fact, the March fall from February ran at a -5% annualised rate. It will be no fun making stuff in China these days. <a href="https://www.interest.co.nz/business/120690/large-delegations-chinese-city-and-business-officials-have-made-hundreds-trips-asia"><strong>The more orders they get</strong></a>, the tougher it will be.</p><p>China's <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4848713/index.html" target="_blank"><strong>new yuan lending rose strongly in March</strong></a> from February, but only to the expected levels. The rise wasn't as much as in January, or even