(MENAFN) The US economy is accelerating and is expected to achieve GDP growth of 3 percent next year, but economists say that is not enough to combat the global aggregate demand slow down resulting from contraction in China, Japan, Europe and emerging markets put together, Gulf News reported.
The biggest slowdown in demand is coming from China's housing market. The sector, which has been the main locomotive of growth for the past decade is faltering and so is business investment and factory output.
China is currently navigating the slowest GDP growth for a quarter century. The government is trying to speed up restructuring of its economy off its addiction to debt, now running at over 250 percent of GDP.
The simultaneous slowdown of China and surge of US GDP are resulting in a massive commodity price slump, especially a steep fall in oil prices as US supply is on the rise and Chinese demand is waning. The upswing in the US growth and decline in oil prices have seen the flight of global investors from oil and emerging market asset classes to dollar and US treasuries resulting in the rise of the dollar.
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