WASHINGTON, April 19 — US retail sales increased by the most in 1-1/2 years in March as households boosted purchases of motor vehicles and a range of other goods, the latest indication that economic growth picked up in the first quarter after a…
NEW YORK, April 16 — Bank of America reported higher first-quarter earnings on lower expenses and loan growth today, with executives describing US growth as still solid. Net profits were US$6.9 billion (RM28.5 billion), up 5.8 per cent from the…
WASHINGTON, April 15 — President Donald Trump said yesterday that actions by the US Federal Reserve have nicked US economic growth and stock market gains by perhaps 30 per cent, and that it should begin pumping money into the economy as it did…
SHANGHAI, April 12 — Asian shares were flat and US Treasury yields pulled back today as investor caution prevailed ahead of the release of first-quarter corporate earnings, although stronger US economic data helped offset some concerns about…
WASHINGTON: The global economy is slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus measures, the International Monetary Fund (IMF) said as it cut its forecast for world economic growth this year.
The global lender’s semi-annual World Economic Report pointed to the US-China trade war and a potentially disorderly British exit from the European Union as key risks and warned that chances of further cuts to the outlook were high.
Some major economies, including China and Germany, might need to take short-term actions, the IMF said.
“This is a delicate moment for the global economy,” IMF chief economist Gita Gopinath said in a news conference on Tuesday to discuss the report.
Governments may need to open their pocketbooks at the same time “across economies” if the slowdown becomes more serious, Gopinath said, adding that loose monetary policy might also be needed.
The comments provided an eerie warning to the global officials gathering in Washington this week for the spring meetings of the IMF and World Bank. The world engaged in coordinated fiscal stimulus to counter the 2008 financial crisis.
In its third downgrade since October, the IMF said the global economy will likely grow 3.3% this year, the slowest expansion since 2016. The forecast cut 0.2 percentage point from the IMF’s outlook in January.
The projected growth rate for next year was unchanged at 3.6%.
More than two-thirds of the expected slowdown in 2019 stems from troubles in rich nations, including members of the EU.
“In this context, avoiding policy missteps that could harm economic activity should be the main priority,” the IMF said in its report.
One potential misstep lies in Britain’s indecision over how to leave the EU. Despite looming deadlines, London has not decided how it will try to shield its economy during the exit process.
The IMF’s new forecast assumes an orderly “Brexit,” but the Fund said a chaotic process could shave more than 0.2 percentage point from global growth in 2019. It said the Bank of England should be “cautious” on its interest rate policy, an apparent tip to wait before increasing borrowing costs.
The EU’s economic growth is already slowing substantially, though the IMF said it still expects the slowdown in Europe and some emerging market economies will give way to a reacceleration in growth during the second half of 2019.
The US economy, while seen outperforming other rich nations’ economies, also got a downgrade on signs that a fiscal stimulus fueled by tax cuts was producing less activity than previously expected.
The IMF said it supported the US Federal Reserve’s decision to pause its rate-hiking cycle, which the global lender said would support the US and world economies this year by easing financial conditions. The IMF raised its forecast for US growth in 2020 by a tenth of a percentage point to 1.9%.
The global lender said it was slightly boosting its outlook for Chinese growth this year – to 6.3% – in part because an expected escalation in the US-China trade war had not materialised.
Still, America’s ongoing tensions with China and other major trading partners continue to cloud the global economy.
WASHINGTON, April 10 — The global economy is slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus measures, the International Monetary Fund said yesterday as it cut its forecast for world economic…
WASHINGTON, April 9 — The International Monetary Fund today cut its US growth forecast significantly for 2019 but said it is still likely to outpace other advanced nations as the world economy slows. The global crisis lender also warned of hazards…
LONDON, March 29 — The pound fell today after Britain’s parliament again rejected a proposed deal to withdraw from the European Union. Sterling had been mostly stronger against both the dollar and the euro in the runup to the vote, but then fell…
HONG KONG: Asian markets rose Friday, putting them on course to end the week on a positive note with investors looking past a downgrade of US growth to focus on the next round of top-level China-US trade talks.
While the past five days have been dogged by fears over the outlook for the global economy, equities from Sydney to Wall Street have enjoyed a stellar start to 2019 fuelled mostly by hopes of a tariffs deal and the prospect of lower borrowing costs.
A slight pick-up in the key US 10-year Treasury yield provided some sense of stability, though dealers remain on edge over the future, with data showing the US economy grew at a much slower pace than initially thought in October-December.
Attention is on Beijing where top Chinese and US negotiators are taking part in their latest batch of talks aimed at ending their long-running trade row that has dragged on the world economy.
White House economic adviser Larry Kudlow said the negotiations were not “time dependent” and could be extended, adding they could take weeks or months to get a final deal.
There has been little by way of solid news on the negotiations but observers have remained upbeat, with China having made a number of concessions in key issues including intellectual property, while Donald Trump has often said he is confident.
“Risk assets are being supported right now, in my view, by a dovish Fed, a China stabilisation and better sentiment around geopolitical risks,“ Frances Donald at Manulife Asset Management told Bloomberg news.
“That probably gives this rally a little bit more juice.”
In morning trade Shanghai surged 1.8%, Hong Kong added 0.7% and Tokyo headed into the morning 1% higher.
Sydney, Seoul and Singapore each added 0.3%, while Wellington put on 0.6%. Taipei and Manila were also sharply higher.
On currency markets the upbeat mood helped the dollar rise against the safe-haven yen, while the pound was unable to break out of a narrow range as the Brexit saga rumbles on.
Prime Minister Theresa May is expected to try for a third time to push her EU divorce bill through parliament after MPs voted down a number of other options on how to leave.
However, Oanda senior market analyst Alfonso Esparza warned “the third time is not likely to be the charm” owing to continued opposition from key lawmakers.
“Failure for the third time could push the United Kingdom into a remain limbo, where a credible exit could not be engineered before the European parliament’s elections in which Britain would have to participate.” — AFP
WASHINGTON, March 22 — The International Monetary Fund yesterday said the US economic outlook remained “strong,” a day after the Federal Reserve trimmed its median growth forecasts for the year. “We believe the outlook for the US economy is…