All articles tagged with #global economic outlook
The global economy appears to be heading for a soft landing in 2024, with the US, UK, and Germany showing signs of resilience and growth. However, this positive outlook is overshadowed by increasing levels of debt, division, and inequality, posing significant risks to the world economy.
At the World Economic Forum in Davos, leaders were questioned about how they would prepare for the potential reelection of Donald Trump. Discussions revolved around the impact of a Trump presidency on global economies, with suggestions including fostering European competitiveness, strengthening domestic markets, and transitioning towards a greener economy. The panel emphasized the need for countries to focus on their own economic strengths and capabilities in order to navigate potential changes in U.S. leadership.
The conflict in the Middle East, particularly between Israel and Hamas, poses new risks to the global economic outlook. This comes as central bankers are already dealing with the economic fallout of the COVID pandemic and Russia's invasion of Ukraine. The duration and intensity of the conflict, as well as its potential spread to other parts of the region, could disrupt supply chains, drag down economic confidence, and lead to higher oil prices. The Federal Reserve may face challenges in deciding whether to raise interest rates and how long to keep rates elevated. The conflict could also impact bond yields and potentially spur a flight to safe-haven assets like U.S. Treasuries.
Oil prices edged higher as investors assessed the global economic outlook following signals from major central banks that they would maintain elevated interest rates to control inflation. The rise in Treasury yields and the strengthening of the US dollar added to the appeal of oil futures. However, uncertainty surrounding demand increased after the Federal Reserve indicated that rates may continue to rise for longer than expected. Higher oil prices are also attracting additional supply, with increased production estimates and the potential return of Iranian barrels to the market.
Asian shares weakened slightly as China slipped into deflation in July, raising concerns about the global economic growth outlook. European futures rose after Italy announced that its new tax on banks would not exceed 0.1% of total assets. US bank shares fell following Moody's downgrades, while longer-term Treasury yields slipped. The Italian government's decision to impose a 40% tax on bank profits from higher interest rates rattled regional banking shares. Oil prices and the US dollar experienced slight declines, while gold prices rose.
The Chinese-led Asian Infrastructure Investment Bank (AIIB) has maintained close cooperation with American governmental institutions, financial institutions, and respective businesses despite rising geopolitical tensions between the US and China, according to AIIB President Jin Liqun. The IMF warns that the ongoing tensions between the world's two largest economies could lead to a 2% decline in global output. However, Jin is confident that the AIIB has the necessary checks and balances in place to avoid such a scenario. The AIIB's investment strategy is focused on infrastructure development, including climate change mitigation and adaptation projects. Starting this July, all projects approved by the bank will need to be in alignment with the Paris Agreement on climate change.