There is a stark contrast between the optimism of the financial markets and the glum economic numbers that continue to be reported by government agencies worldwide.
China said on Wednesday that its industrial output in April was 7.3% higher than a year ago—and a full percentage point lower than the growth rate reported for March. Other indicators such as electricity consumption, too, suggest that the Chinese recovery is sputtering, perhaps because the effects of its huge fiscal stimulus have quickly worn out.
The Chinese numbers come a day after India said its industrial output in March dropped at an annual rate of 2.3%, the worst performance in at least 16 years. This comes after a short recovery in February, which raised hopes of an early economic recovery.
Meanwhile, exports of both these Asian heavy hitters continue to shrink in what could be a process of partial deglobalization.
Green shoots? Perhaps. But there is also a lot of parched acreage out there