- This weekly roundup brings you the latest stories from the world of economics and finance.
- Top economics stories: Bank predicts slowing global economic growth in 2024; Japan's economy is shrinking more than expected. U.S. unemployment insurance claims are at their highest level in three months.
1. Banks say global economic growth will slow in 2024
A series of major banks expect global economic growth to slow further in 2024 due to high interest rates, rising energy prices and economic slowdowns in the world's top two countries.
They warn that geopolitical risks and wars in Ukraine and the Middle East could also contribute to a deteriorating global financial outlook.
Global growth could slow to 2.6% next year from 2.9% this year, according to a Reuters poll. Economists generally agree that the world will avoid a recession, but highlight the possibility of a “soft recession” in Europe and the UK.
6 out of 10 respondents in the latest World Economic Forum survey Chief economist's outlook It sees the global economic outlook as “poor” and expects “overall conditions to weaken over the coming year”.
Despite the possibility of a “soft landing” for the US, uncertainty surrounding the Federal Reserve's interest rate moves makes it difficult to predict the future, according to Reuters. In addition to this, growth in China is expected to slow as companies seek more cost-effective manufacturing locations.
Morgan Stanley analyst James Lord said in the latest edition of the Thoughts on the Market podcast that while U.S. growth is slowing, it could exceed expectations in the first half of 2024. . “Pretty unconvincing growth rates in Europe and China,” he added.
However, Goldman Sachs Research points to the better-than-expected performance of the global economy in 2023 and the fact that GDP growth and employment remain relatively stable in key countries facing extreme inflationary pressures. and offers a more optimistic outlook.
2. Japan's economy is shrinking and the risk of recession is increasing
Japan's economy contracted from July to September, ending two consecutive quarters of growth. This will complicate the Bank of Japan's (BoJ) plans to scale back the massive financial support package launched to counter the impact of rising prices, Reuters explains.
GDP fell 2.1% in the third quarter, exceeding expectations for a 0.6% decline. This followed the previous quarter's 4.5% growth.
The data highlights the impact of rising prices on consumer spending and the challenges businesses face amid declining demand, particularly from China. Japan's export growth fell sharply in October as semiconductor and steel exports to China fell.
Economist Takeshi Minami suggests that the Bank of Japan may postpone its interest rate adjustment plans due to concerns about slowing economic growth and prices. “Given the lack of a growth engine, it would not be surprising if Japan's economy contracts again this quarter. The risk of Japan slipping into recession cannot be ruled out.”
3. News Overview: Economic stories from around the world
New jobless claims in the United States rose by 13,000 to 231,000 in the week ending November 11, the highest level in three months. Signs of a slowdown in the job market are likely to give the Fed a boost in its continued fight to rein in inflation, according to Reuters.
South Africa will become the first country in Africa to introduce shared parental leave. Under a new High Court ruling, parents will be able to decide how to spend the four months after their baby's birth or adoption. guardian I will report. Previously, only mothers could get the full period, while fathers were given a 10-day period.
Argentina's annual inflation rate is expected to be higher than expected, according to an economic survey. Analysts compiled by the country's central bank revised their October forecast upward from 180.7% to 185.0%. The annual inflation rate reached 142.7% in the same month.
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The U.S. Senate averted a government shutdown on November 15 by passing a temporary spending bill. The 87-11 vote ended the third fiscal standoff in a year that has already put Washington on the brink of defaulting on more than $31 trillion in debt.
UK inflation eased more than expected in October as household energy costs fell. The annual consumer price increase rate fell to 4.6% from 6.7% in September, the smallest increase in two years. However, the UK still has the highest rate of consumer price inflation in the G7.
Russian households are being forced to cut spending as the country's economy is restructured due to the Ukraine war and Western sanctions. The International Monetary Fund forecasts Russia's growth rate of 2.2% this year, but inflation remains high and more than 15.7 million people live below the poverty line, according to official figures.
High inflation and slowing economic growth in Europe and the United States may cause consumers to prioritize necessities over gifts this holiday season, with some toy company executives predicting sales will drop 10-12% compared to 2022. % decrease. But retailers will be watching Black Friday for omens. About how the season will go.
4. Further financial and economic issues
The term “soft landing” pops up frequently in news reports and economic forecasts, but what does it mean? “Can we really expect to emerge from the economic crisis without an economic crisis?”
More countries are considering central bank digital currencies, but data privacy and consumer protection are paramount concerns. Check out this explanation to see if these concerns are justified.
This year's highlights include: Global Gender Gap Report, inadequate care systems are one of the biggest obstacles to improving gender disparities in labor markets around the world. Here, the World Economic Forum's Silja Bohler and Julia Hukspiel explore the need for better-functioning care systems that recognize, reduce and redistribute unpaid care work.