Financial and Monetary Systems

The latest from the IMF on the global economy, and other economics stories to read

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Domestic shocks in G20 emerging economies are increasingly impacting the global economy. Image: REUTERS/Yuri Gripas

Joe Myers
Writer, Forum Agenda
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  • This weekly round-up brings you the latest news from the world of economics and finance.
  • Top economy stories: Outlook from the IMF on the global economy; US consumer prices rise 3.5%; ECB holds rates steady.

1. IMF warning about domestic shocks in the G20 and persistent low growth

The International Monetary Fund has released insights from its upcoming World Economic Outlook report.

The IMF warns that domestic shocks in G20 emerging economies are increasingly hitting growth in developed economies.

These countries, like China, India and Mexico, are now deeply embedded in the global economy, the report says, and as a result, are generating larger 'spillovers' to the rest of the global economy. IMF simulations suggest that a decline in productivity in G20 emerging markets can lower global output three times more than in 2000.

The potential impact on global growht from emerging-market spillovers through trade has tripled since 2000.
Impact of spillovers on global GDP by G20 emerging markets. Image: IMF

The IMF has also warned that the world needs significant reforms to boost productivity and make use of new technologies in order to reignite growth. A chapter from the World Economic Outlook shows further declines in global growth rate - a rate which has been slowing since the 2008-09 global financial crisis.

Without action, growth could reach just 2.8% by 2030, the fund warned.

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2. US consumer prices rise 3.5%

Consumer prices in the United States rose more than expected in March, with increases for gasoline and rental housing helping push the consumer price index (CPI) to rise 3.5% - the biggest increase in 6 months.

Financial markets have responded by anticipating the Federal Reserve will delay any interest rate cuts until at least September.

The CPI rose 0.4% in March compared to the month before, the same figure as February. Gasoline prices rose 1.7% in March after a 3.8% increase the month before.

The Labor Department also announced a third consecutive month of strong consumer prices.

Annual change in US consumper price index
US CPI has fallen from earlier highs. Image: Reuters
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3. News in brief: Stories on the economy from around the world

The European Central Bank has kept its deposit rate at a record 4.0%, but indicated cuts might be on the horizon.

German industrial output rose more than expected in February, up 2.1% on the previous month. Meanwhile, the country’s exports fell by 2% month-on-month, with exports to EU countries dropping 3.9%.

Japan’s real wages fell 1.3% year-on-year in February, making it the 23rd consecutive month of decreases.

US small business sentiment in March fell to its lowest level in over 11 years. It comes amid rising concerns about inflation.

Italy has cut its growth forecast for this year and next amid an uncertain international outlook.

The UK economy grew by 0.1% in monthly terms in February, while January's figure was revised upwards, Office for National Statistics data has shown.

Argentina has cut its benchmark interest rate by 10 points, lowering it to 70%. Inflation is running at an annual basis of more than 275%.

Peru's central bank has also lowered its key interest rate, cutting it by 0.25 basis points to 6.0%.

Sweden's inflation rate slowed more than expected last month. The country's central bank has said it will probably cut interest rates in May or June, if inflation trends continue, reports Bloomberg.

Japan's five-year bond yield has climbed to its highest since 2011.

Initial estimates released by the Ministry of Trade and Industry suggest that Singaporean gross domestic product grew 0.1% in the quarter that ended in March, compared to the final quarter of last year.

4. More on finance and the economy from our blog

Globally, women lose $399,600 in lifetime wealth accumulation, with such figures in some countries only set to grow. Here, the World Economic Forum’s Morgan Camp explores the impact of boosting women’s financial literacy.

In recent years, the space economy has exponentially grown - now outpacing global GDP. Here’s how 6 countries are using space technology to improve their digital capabilities.

Financial fraud and digital scams are on the rise globally, with scammers stealing over $1 trillion in 2023. The increase comes in part from the embracing of new and sophisticated technologies.

Related topics:
Financial and Monetary SystemsGeo-Economics and PoliticsEconomic Growth
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Contents
1. IMF warning about domestic shocks in the G20 and persistent low growth2. US consumer prices rise 3.5%3. News in brief: Stories on the economy from around the world4. More on finance and the economy from our blog

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