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Oxfam International activists kneel during a mock coronation of a person in a Christine Lagarde mask in a park near IMF headquarters in Washington yesterday. Signs of slowing in some of the world’s most important economies are occurring at a time when the US stimulus is ending. Image Credit: Reuters

London: Private sector activity slowed in China and Europe this month just as the outlook for the United States has darkened, according to data yesterday which suggests a global slowdown is becoming more entrenched.

The Eurozone private sector grew only modestly — and without the support of Germany and France, it would have shrunk — while China's factory sector barely expanded even as inflation eased, purchasing managers' indexes (PMIs) showed.

The data come a day after the US Federal Reserve said the pace of recovery in the world's largest economy was proceeding more slowly than it had expected, but pledged no new help for the economy once its bond purchase programme expires this month.

Adding to the gloomy mix, Europe is trying to hammer out a second bailout for Greece and there are concerns that the sovereign debt crisis could spill over again to other countries on the Eurozone's periphery.

Growth in the 17-nation bloc's dominant service sector was much slower than in recent months while manufacturers also eased off the accelerator as new orders declined for the first time in nearly two years, the Markit PMIs showed. "Economic activity is losing momentum quite rapidly. The pace of growth deceleration in May-June matches similar evidence in other industrialised countries," said Marco Valli at UniCredit.

Earlier data from China — which has been the main driver of world growth —showed its factory sector barely expanded in June as ongoing policy tightening by the central bank to control inflation muffles a booming economy.

China's flash HSBC PMI, the earliest available indicator of the country's industrial activity, eased to 50.1 in June. Data compiler Markit said this was consistent with second quarter economic growth of around 9.1-9.3 per cent year-on-year, down from 9.7 in the first quarter.