For the second consecutive month, the Coincident and Leading Barometers rise in July. However, they have not yet recovered the losses incurred between March and May. Despite these increases, the indicators continue to suggest that the global economic growth rate will remain modest in 2025.
In July, the Global Economic Coincident Barometer rises by 1.5 points to 95.4 points, and the Leading Barometer increases by 1.0 point to 97.4 points. The results are mainly driven by the Asia, Pacific & Africa region.
“Although geopolitical risks and the resulting economic uncertainty have not disappeared, the Global Barometers suggest a slight improvement towards long-term averages. However, new information reflecting divergent monetary policies among major central banks, ongoing conflict in the Middle East and the vulnerability of global growth to trade shocks indicates that, while major economies are avoiding recession, growth remains fragile. Elevated policy uncertainty, persistent inflationary pressures in certain regions and geopolitical tensions combine to create a challenging environment for stable economic growth”, comments KOF Director Jan-Egbert Sturm the latest results.
Coincident Barometer – regions and sectors
The 1.5-point increase in the Coincident Barometer in July results from positive contributions of 0.9 and 0.5 points from the Asia, Pacific & Africa and Western Hemisphere regions, respectively. The Europe indicator contributes modestly with 0.1 points to the aggregated result. Despite the second consecutive increase, the Western Hemisphere indicator continues to show the lowest level among the regional coincident indicators.
All five coincident sectoral indicators rise in July, with Services ending a sequence of five consecutive declines and Trade, along with Construction, recording levels above the 100-point mark.
Leading Barometer – regions and sectors
In July, the 1.0-point increase in the Global Leading Barometer results from a positive contribution of 1.0 point from the Asia, Pacific & Africa region, while the Western Hemisphere decreases moderately by 0.1 point and Europe remains unchanged. All three regions show moderate growth for the coming months. The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average.
Among the leading sectoral indicators, only Construction does not rise in the month, recording its third consecutive decrease. Despite this, it continues to show the highest level among the sectors. All leading sectoral indicators remain below the neutral 100-point level.