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Inventory unwind unlikely to exacerbate slowdown

Fluctuations in the level of firms’ inventories can sometimes exacerbate upturns and downturns in the wider business cycle. However, we find no obvious signs that the weak start to 2018 is likely to trigger heavy destocking by firms in the advanced economies. Inventories typically only amplify cyclical swings when there are large shifts in growth and the surveys allay concerns of a substantial stock unwind.

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