This may be a scandalous misrepresentation of the true state of affairs, but there are many readers who would, I am sure, have sensed a grain of truth there. Another cause of possible scepticism over the euro relates to what I would like to call popular acceptability. Let me explain what it is. No one has yet seen the euro in the form of cash. From Hong Kong we cannot witness as closely as you can here in Euroland the extent to which the euro has already become part of economic life. The separate national currencies are still quoted in Hong Kong and any traveller knows that he can only take those and not the euro in banknote form on his journey. There is a feeling that, whatever the law says, the euro will not really have arrived until it is there in your pocket. The sceptics will go on to suggest that poor performance of the euro to date, coupled with nationalistic resentment of the imminent loss of one’s own banknotes - to many an emotive symbol of national identity and sovereignty - might yet cause a wave of popular opposition to the euro at the eleventh hour. I should stress that this may not be a widely held viewpoint, and most international businessmen and bankers have long since discarded the national currencies from their minds and books in favour of the euro. But it is possible for just a few vocal doubters to have a disproportionate effect on the overall mood.
In its latest report the International Monetary Fund lowered its estimate for world growth for 2015 by 0.3 pp to 3.1%, with the developed and emerging economies expected to perform differently. The pick-up in activity continues in the advanced economies, underpinned by favourable financing conditions and low commodities prices, while inflation is running at very low rates. In most of the emerging economies, activity continues to fall, owing not only to conjunctural reasons in the international environment, but also to more structural factors, such as lower productivity gains and demographic factors. Activity continued to slow in the emerging Asian economies, while in Latin America it is stabilising at very low rates, albeit with notable differences from country to country; in turn, in some cases, inflation stands above the authorities’ targets, due partly to the depreciation of their currencies. Of particular significance for the world economy are the developments in China, which posted an annualised rate of GDP growth of 6.9% in the third quarter. That entails a slowdown, but one milder than anticipated. However, uncertainty over its medium-term growth rate persists bearing in mind the authorities’ intention to lead the Chinese economy towards a more sustainable and more domestic consumption-led model. The consequences of the slowdown on the world economy, mainly via the effect of the decline in commodities prices on exporting countries’ economies, are so far projected to be limited.