World

16Feb By Michael SmithNo Comments
China, World

China’s Economy in the Year of the Dragon: It’s a bleak place

At the end of January, a Hong Kong judge ordered the liquidation of the heavily-indebted Chinese real estate giant Evergrande. It was just the latest piece of bad news for China’s economy, after a year of disappointing growth, high youth unemployment, and various surveys and media reports that show a lack of confidence amongst China’s entrepreneurs and consumers. Some observers have been predicting an economic collapse in China for decades. Others have long predicted that China would be stuck in a middle-income trap or some other type of economic stagnation. Might some of these predictions come true this time? What does the Year of the Dragon have in store for consumers, companies, and markets? What should we look out for this year to understand both China’s real economy and its financ...
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Can the IMF help Pakistan and how terrible is its financial crisis?
14Feb By Brian ThompsonNo Comments
World

Can the IMF help Pakistan and how terrible is its financial crisis?

Negotiations on a new government in Pakistan have allayed immediate fears of instability in the nuclear-armed nation following inconclusive elections last week, but the risk of a full-scale economic crisis remains.A $3 billion programme from the International Monetary Fund (IMF) runs out next month and securing a new and much bigger one is widely seen as the priority for the new administration.WHO COULD THE IMF NEGOTIATE WITH?The largest party, the Pakistan Muslim League-Nawaz (PML-N), secured support on Tuesday from the second biggest, the Pakistan People's Party (PPP), and is trying to persuade it to form a majority coalition.The caretaker government in place since August is implementing the IMF loan programme which helped to avert a sovereign debt default when it was approved in July. ...
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A think tank claims that while the collapse of Evergrande is not China’s “Lehman moment,” it does make economic recovery more difficult.
14Feb By Mike TrudellNo Comments
China, World

A think tank claims that while the collapse of Evergrande is not China’s “Lehman moment,” it does make economic recovery more difficult.

China's crumbling property sector, its stock market crash, and its gummed-up economy have drawn some comparisons to the 2008 crash in the US. A few weeks ago, the Chinese property giant Evergrande received a liquidation order from a Hong Kong court, forcing the sale of its assets to repay the company's $300 billion worth of debt. This has spurred on the question: is the Evergrande collapse China's "Lehman moment?" The answer, according to one think tank, is no. But it does pose an obstacle to an economic rebound. "Evergrande's bankruptcy is not China's Lehman moment; its downfall is unlikely to immediately trigger a contagion across the entirety of China's financial system," Zongyuan Zoe Liu, a Council of Foreign Relations expert, wrote on Tuesday. Back in 2008, Lehman Brot...
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Sri Lanka is mired in unstable political and economic conditions.
9Feb By Michael SmithNo Comments
Asia, World

Sri Lanka is mired in unstable political and economic conditions.

In 2023, Sri Lanka faced a complex interplay of economic and political challenges. Although fuel and food queues have disappeared, the dire impact of the economic crisis was inescapable. Sri Lanka’s economic outlook was initially grim, with a 3.1 per cent GDP contraction in the second quarter of 2023 and a projected 2 per cent shrinkage for the year. The first quarter saw an alarming 11.5 per cent contraction, highlighting the severity of the crisis. Despite a peak inflation rate of 70 per cent in September, it dropped to 3.4 per cent in November due to subdued demand, offering temporary relief for poorer households The World Bank later revised its forecasts, noting Sri Lanka’s progress in reducing inflation and benefits accruing from tourism revenue and currency appreciation. The B...
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IMF cautions that Maldives faces a serious danger of foreign debt crisis.
7Feb By Joe RodriguezNo Comments
World

IMF cautions that Maldives faces a serious danger of foreign debt crisis.

The Maldives is at a high risk of external and overall debt distress, the International Monetary Fund (IMF) warned on Wednesday but did not provide any details about the debt. It said the country's fiscal and external vulnerabilities have increased, calling for urgent policy adjustment. "Maldives remains at high risk of external and overall debt distress," said IMF staff teams in a report prepared after a visit to the country. The global financial institution said that without significant policy changes, the archipelago nation's overall fiscal deficits and public debt are projected to stay elevated. "Amid elevated fuel prices coupled with continued strong import demands, the current account deficit in 2024 is projected to remain large, albeit gradually narrowing over the medium term." ...
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Pakistan’s Elections Are Conducted Amid Crisis
7Feb By Walter ParezNo Comments
World

Pakistan’s Elections Are Conducted Amid Crisis

The highlights this week: Pakistan readies for elections that will follow the usual script, an Indian government spokesperson affirms the country’s engagement with the Taliban, and a Sri Lankan cabinet minister resigns amid a health care scandal. Pakistan’s Elections Will Follow the Usual ScriptA top Pakistani political party is subjected to a harsh crackdown ahead of national elections. Its members are harassed, abducted, and arrested. Media outlets are pressured not to cover any of the party’s activities, and critics of this repression are silenced. The party’s top leader is given a long jail sentence on the eve of the polls. This was the situation for the Pakistan Muslim League-Nawaz (PML-N) in 2018. Today, the PML-N is contesting Pakistan’s Feb. 8 elections with no problems, and...
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Pakistan’s troubled economy is being turned around by old dreamers
6Feb By Michael SmithNo Comments
World

Pakistan’s troubled economy is being turned around by old dreamers

Pakistani voters head to the polls on Thursday amid a deep-seated economic crisis. Inflation is hovering at 30 percent, close to 40 percent of people live below the poverty line, and the debt-to-gross domestic product (GDP) ratio has climbed to 72 percent. Pakistan’s new government will have to contend with these and an ageing public infrastructure. “We have power outages every day for two hours,” says Muhammad Waqas, a janitor from Islamabad. “In the summer, when it’s hot, you sit idly and suffer.” As with other state-owned firms, the inability of successive governments to invest in Pakistan’s National Transmission and Despatch Company has left it prone to failure. More recently, the COVID-19 pandemic and energy supply challenges dampened Pakistan’s growth prospects and constrai...
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To boost its economy, Sri Lanka and Thailand negotiate a free trade agreement.
3Feb By Walter ParezNo Comments
Asia, World

To boost its economy, Sri Lanka and Thailand negotiate a free trade agreement.

Thailand and Sri Lanka have signed a Free Trade Agreement (FTA), a move Sri Lanka hopes will help it emerge from its worst financial crisis in decades. “This move aims to enhance market opportunities, with negotiations covering various aspects such as Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights,” read a statement published on Saturday by the Sri Lankan president’s media department. The island nation has been renewing a focus on trade deals to foster economic growth and help its battered economy, which is estimated by the World Bank to have contracted 3.8 percent last year after a severe foreign exchange crunch plunged it into a wider financial crisis. A delegation headed by Thai Prime Minister Srettha Thavisin arrived in Colombo on Saturday to ...
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Managing Bangladesh’s economic development
1Feb By Brian ThompsonNo Comments
World

Managing Bangladesh’s economic development

Bangladesh, since its liberation in 1971, has undergone a profound economic transformation, evolving from one of the world’s most impoverished nations to one of the fastest-growing economies. Despite significant progress in indicators such as the Human Development Index (HDI) and Sustainable Development Goals (SDGs), recent external shocks, particularly from the Covid-19 pandemic and the Russia-Ukraine conflict, have brought attention to the vulnerabilities in the nation’s economic landscape. In the face of adversity, Bangladesh showcased resilience by achieving GDP growth of 3.4% in 2020, outperforming many developing nations and earning accolades for its government’s adept management. However, the subsequent move to seek a US$4.5 billion loan from the International Monetary Fun...
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1Feb By Mike TrudellNo Comments
Asia, World

Leading organizations confirm that the Indian economy will rise rapidly in FY24.

The RBI's Survey of Professional Forecasters (SPF) is aligning with the positive trend, upgrading India's real GDP growth from 6.4 per to 7.0 per cent. India is poised to remain the fastest-growing major economy in the world in FY24, according to a poll of economists conducted by news agency Reuters. The economists polled by the news agency also suggested that inflation may not surge again. It may be noted that the Indian economy has performed better than expected in the first two quarters of the ongoing financial year, backed by strong spending by the government as it prepares for the all-important Lok Sabha polls later this year. While infrastructure continues to be a key area of focus for the government heading into the Interim Budget 2024 on February 1, some issues in the bac...
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