September Developed Market Data Snapshot: Growth Momentum Has Peaked

• Purchasing managers’ indices continue to point to a weakening of growth momentum across developed markets (DM), supporting Fitch Solutions’ view that DM growth has peaked.
• Despite improving labour market conditions, the rise in COVID-19 cases in July and August 2021 has resulted in a weakening of consumer confidence and monthly retail sales fell in most DMs in July.
• Fitch retains its view that high inflation rates across DMs will only be temporary; however, inflation risks have shifted to the upside.
• Elevated inflation has increased pressure on major central banks to consider dialing down asset purchases, which could happen as soon as Q421. However, Fitch believes that the major DM central banks will not hike interest rates before 2023 so as not to stifle the economic recovery.

(Source: Fitch Solutions)