For years now China’s economic momentum has been cracking all records. But it is now increasingly being mooted that China could be hit by a sharp slump in growth after the Olympic Games. Is the Chinese economy heading for a hard landing?

The positive Constitutional Court ruling for the government and the AKP removes considerable uncertainty from the country. The economy will benefit from this. Other challenges remain, e.g. the international capital markets have hit choppy waters in the wake of the subprime crisis in the US. How will Turkey accomplish the balancing act between the tricky domestic political situation and the confidence of international investors upon which it relies given its substantial foreign capital requirements?

“The industrial countries suffer from high oil prices, whereas the emerging markets benefit.” This thesis does not match reality as most emerging markets have to import oil.

The negative GDP sequential rate in the second quarter is likely to be followed by a slight plus in the third quarter. We have shaved three tenthsof a percentage point off our EMU growth forecast for 2008 to 1.4 %. Today’s figures for France were disappointing.

As expected, the German economy shrank in the second quarter 2008. However, Germany is not heading for recession. Economic momentum is likely to pick up again in the fourth quarter. Coupled with the revision to first quarter growth figures, we have lowered our forecast for 2008 as a whole from 2.3 % to 2 %.

The Ifo business climate index slipped far more sharply than expected in July. The main culprit is likely to have been the relentless rise in energy prices up to mid-July. Without doubt, the oil price now looms as by far the largest threat to the economy, not only in Germany.

High inflation rates are plaguing not only the industrial countries but the emerging markets as well. Indeed, the latter suffer even more as oil and food, the main drivers of prices, both play a particularly significant role in private spending. What impact will inflation have on these countries?