US IMF lowers global economic forecast

20:23  25 january  2022
20:23  25 january  2022 Source:   pressfrom.com

China is risking a big hit to the economy and supply chains with zero-Omicron approach

  China is risking a big hit to the economy and supply chains with zero-Omicron approach The Chinese government's unwavering insistence on stamping out any trace of the coronavirus is facing its biggest test yet as authorities grapple with Omicron's quickening spread. And it could cost the world's second largest economy dearly this year. © Kevin Frayer/Getty Images The rest of the world is also dealing with a rapid escalation of Omicron cases, but China is different because of how intent authorities are on preventing any widespread outbreak.

the global economic recovery from the Corona crisis device into stock - and the prices for consumers continue to rise. In view of a weaker expected growth in China and the United States, the International Monetary Fund (IMF) has a slightly down its forecast to develop the global economy.

Für Verbraucher gibt es schlechte Nachrichten: Die Preise sollen weltweit erneut deutlich steigen. © Demy Becker / DPA For consumers there are bad news: Prices should increase significantly worldwide.

The global economy is expected to grow by 4.4 percent in 2022 - 0.5 percentage points less than the last forecast adopted in October as the IMF announced.

The inflation rate in turn is expected to be significantly higher than expected three months ago. For the industrialized countries, the IMF expects an average inflation rate of 3.9 percent for this year, an increase of 1.6 percentage points. In developing and emerging countries, the inflation rate 2022 averaged 5.9 percent on average - a plus of one percentage point. A normalization of the inflation rate is to occur until 2023. Higher inflation weakens the purchasing power of consumers because they can buy less for a Euro or dollar than before.

China cuts interest rates as economic growth slows

  China cuts interest rates as economic growth slows Compared to a year earlier, the economy grew 4% in the last three months of 2021, official figures show.Gross domestic product (GDP) grew by 4% for the last three months of 2021 from a year earlier, the National Bureau of Statistics said.

growth forecognosis for Germany reduced

forecast for gross domestic product growth (GDP) in Germany This year, the IMF lowered to 3.8 percent, which are 0.8 percentage points less than was adopted in October.

as a reason, the IMF mentioned above all the continued interruptions of global supply chains, which meet the German economy. For the Eurozone, the IMF lowered its growth forecast for this year by 0.4 percentage points to 3.9 percent.

of the IMF acknowledged that the new economic forecasts of high uncertainty were shaped. With a view to the Coronavirus Pandemic, Chief Volkswirt Student Gita Gopinath, "The development of deadly variants could extend the crisis». In addition, China's strategy could use strict local Lockdowns to avoid dissemination of the virus to exacerbate problems of global supply chains.

Blinken calls for 'global action' against Russia amid Ukraine tensions

  Blinken calls for 'global action' against Russia amid Ukraine tensions Secretary of State Antony Blinken on Thursday appealed for global unity to push back on Russian military threats against Ukraine, saying Moscow seeks to destabilize a "post-Cold War Europe that is whole, free and at peace." The secretary's remarks come amid heightened fears in the U.S. and Europe that Russian President Vladimir Putin will launch an invasion against Ukraine. The Biden administration has undertaken a fervent diplomatic push to prepare allies and partners in Europe to impose coordinated, economic sanctions if Russian troops move across the border, while seeking to provide an off-ramp to Moscow to pull back from the brink of open war.

Video: Turkey is aimed at the real estate sector of the world's second largest economy mountains against monetary value (DPA AFX)

. If the financial pressure of the industry should spread to the economy as a whole, "the consequences would be well noticeable," Gopinath warned.

for the USA, the world's largest economy, the IMF has capped its growth forecast by 1.2 percentage points to 4 percent. The reason for this is the IMF, above all, the failure of a trillion-heavy packet for investment in social benefits and climate protection in the US Congress that the economy would have boosted. For China, the forecast was reduced by 0.8 percentage points to 4.8 percent. As a reason, the IMF calls the lower purchase of consumers apart from the real estate sector problems and the Corona Lockdown.

With a view to the pandemic, the IMF assumes that Omikron will slow down global growth in the first quarter. But it is expected that this effect cancel in the second quarter - assuming that there will be no new variants of the coronavirus that will lead to far-reaching conditions, the IMF.

Biden should pivot to a pro-growth strategy on immigration reform

  Biden should pivot to a pro-growth strategy on immigration reform If Biden is to garner bipartisan support, the focus should be on making a pro-growth case for increasing the number of legal immigrants. The reason: Until Trump's presidency, Republicans traditionally were the party that favored strong growth along with free trade and open immigration policies. And the case is even more compelling today.Consider what has happened to U.S. economic growth in the post-war era. During the second half of the 20th century annualized economic growth averaged close to 3.5 percent, but it has slowed to 1.8 percent in the past two decades. Part of the reason relates to U.S.

Inflation: Normalization next year Expected

With regard to inflation, the expected normalization predicted from the IMF forecasted for mid 2022 is shifting to the coming year. In 2023, thanks to fewer problems with global supply chains, stabilized energy prices and a total tangible monetary policy, prices are intended to increase significantly slower. In the industrialized countries, inflation should then only be 2.1 percent, in emerging and developing countries 4.7 percent.

of the IMF warned, the foreseeable tangible monetary policy to combat inflation, especially in the US, will also put pressure on emerging and developing countries, such as higher loan rates and weakening currencies.

"A surprisingly high inflation in the United States could cause aggressive tightening of monetary policy through the Federal Reserve," said Gopinath. This would lead to a significant tightening of the conditions in the global financial markets.

The US Federal Reserve Federal Reserve (Fed) has already initiated its turnaround away from the aid programs to the fight against the Corona crisis towards a tighter monetary policy. The key interest rate may be increased for the first time in March since the beginning of the pandemic. By the end of the year, up to two additional interest rate steps are expected.

The key interest rate is still in the extremely low range of 0.0 to 0.25 percent. The inflation rate in turn was climbed to 7 percent last year, the highest value for decades. An increase in the key interest rate would slow down the inflation, but also dampen the economy.

The IMF asks Salvador to give up the Bitcoin as official currency .
© Pierre Teyssot AFP / file The Salvador is the only country in the world where Bitcoin is considered a formal currency. For the International Monetary Fund (IMF), its use has risks for the financial stability and protection of consumers. Bitcoin is very volatile, its use as an official currency of exchange has big risks for the financial integrity and that of the market, warns the IMF.

usr: 1
This is interesting!