Major economies, across the world, are stumbling and the near-term outlook is not encouraging. Fear of inflation has been largely replaced by worries about downside risks to growth. But it is well to note that while inflation angst has diminished, recorded inflation - as measured by government statistical agencies - continues to be high almost everywhere.

The latest purchasing managers' report for the Eurozone, put out by the Royal Bank of Scotland, depicts an economy that is at best stagnant and is likely headed lower. This report is more timely than official data, which are months old. Eurostat reported earlier that the Eurozone economy had actually contracted in the second quarter, relative to the first.

Inflation remains much higher than the European Central Bank's (ECB) target rate. Easing commodity prices have provided hope that inflationary pressures will be contained. But wages tend to be sticky in Europe, and structures somewhat rigid. So the policymakers at the ECB will not be in a big hurry to reduce interest rates.

Meanwhile, sliding commodity prices have recently staged a bit of a rally. There are a number of reasons for this, but if global growth prospects continue to dim, then it is unlikely that the bear-market in commodities has seen a bottom. Inevitably, most eyes are on China because the biggest factor in the picture is the outlook for the Chinese economy.

China grew at a heady 10.1 percent in the second quarter (we will not quibble about the accuracy of the 0.1 percent bit). But, going forward, the continuing slowdown in major export markets means that parts of the manufacturing sector will be hit hard. And this will definitely have an impact on domestic demand.

Policymakers appear to be intent on maintaining a fast pace of advance for the economy. A growth rate that falls to, say, seven percent will be considered a recession. Naturally, there are economic and political reasons for the policy stance. Expectations of rising living standards are high among the population, and disappointment could spell political trouble for the elite.

There are plenty of ongoing grievances about corruption and authoritarian rule. Also, there is a continuing need to absorb labour into the advanced from the declining sectors of the economy. High growth tends to smooth things out.

So the authorities are being proactive in trying to offset an expected decline in export growth via an increase in infrastructure spending. It is too soon to say how successful they will be. But they are undoubtedly highly motivated. As far as monetary and exchange rate policies are concerned, there has been a switch from reducing inflationary pressures to maintaining growth.

Japan's economy contracted in the second quarter, relative to the first, amid talk of recession. Certainly, the central bank is very downbeat. Exports, the main engine of growth for the economy, dropped, while high energy and food prices deterred consumer spending. The Japanese must be crossing their fingers, hoping that the global economy does not soften further, because domestic demand is not going to take up the slack.

Not surprisingly, the UK economy is also weak. It stagnated in the second quarter. Tight credit and falling house prices are pressuring the consumer. At the same time, business spending is on the decline. But inflation is high and the Bank of England is dithering, trying to figure out if price pressures have peaked so that it can start cutting rates.

As for the US economy, the housing slump and weak job market are weighing down the consumer. And financial institutions are still trying to repair their balance sheets; reducing lending, writing down assets and raising capital.

What little growth the US economy has clocked up has been driven primarily by exports. Unfortunately, most other regions in the world are now slowing down substantially.

So, there you have it, a roundup of global economic activity that is far from cheerful.

Iraj Pouyandeh is a Strategist and Senior Portfolio Manager at LOM Asset Management. He manages the LOM Global Equity Fund. For more information on LOM Asset Management please visit www.lomam.com