World

Plummeting iron ore prices on the basis of China’s property crisis might wipe out $3 billion from the government budget.
19Aug By Online DeskNo Comments
Asia, China, World

Plummeting iron ore prices on the basis of China’s property crisis might wipe out $3 billion from the government budget.

Plummeting iron ore prices could cost the federal government $3 billion in revenue, which is likely to push the budget further into deficit this financial year. China's property market is in a precarious state, which has seen demand for iron ore — the key component for making steel – drop significantly. Australia has done exceptionally well riding the boom in the Chinese economy. But the political and economic uncertainty surrounding the world's two biggest economies — the US and China — points to tougher times ahead. But that decline has accelerated in recent weeks, with prices now sitting around $82 per tonne, which is below the price the Treasury had anticipated at this point. It had forecast the iron ore price gradually declining to settle at $60 per tonne by the first qua...
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Chinese steel giant warns of “long, cold winter”
16Aug By Online DeskNo Comments
China, World

Chinese steel giant warns of “long, cold winter”

The statement by China’s top steelmaking firm, which accounts for 7 percent of global output, that the industry faces a severe crisis, underscores the extent of the slowdown in the Chinese economy and its global significance. Outlining the company’s half-year position on Wednesday, Hu Vangming, chair of China Baowu Steel Group, said the “winter” would be “longer, colder and more difficult than we expected.” In comments to Bloomberg, he said in the process of resolving it, cash was more important than profit and “financial departments at all levels should pay more attention to the security of the company’s funding.” His remarks were echoed by Hou Augui, the general manager at the state-owned firm, who said “the current situation in the steel industry is more severe that the downtu...
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Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.
15Aug By Online DeskNo Comments
China, World

Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.

China’s steel industry is facing a crisis more serious than the recessions of 2008 and 2015. The world’s largest steelmaker, China Baowu Steel Group, warned of this, Bloomberg reports. The crisis is likely to be longer and more severe than the steel sector expected, said Hu Wangming, chairman of Baowu Steel Group, at the company’s semi-annual meeting. The group produces about 7% of the world’s steel, and this message from it is likely to cause concern among competitors in Asia, Europe and North America who are trying to cope with the new wave of Chinese exports. Baowu Steel will focus on minimizing risks. The company recommends that financial departments at all levels pay more attention to the security of financing and strengthening control, including overdue payments and the d...
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13Aug By Online DeskNo Comments
Asia, Market, World

Asset Management: Monthly Macro Insights – August 2024

Weakening business confidence indices continue to cast doubts on the global economy’s resilience. Although core inflation remains above central banks’ targets, the cooling of labour markets has not gone unnoticed, prompting a major shift in policy rates projections. China’s economy disappoints Chinese GDP grew a mere 0.7 per cent q/q in Q2-2024, the weakest since early 2022, showing activity is struggling to maintain a tepid recovery. What’s more, weak July PMIs signalled a poor start to Q3 — a worrying development given the undershoot in the previous quarter. Manufacturing confidence edged down to 49.4 and remained in contraction territory for a third month straight. The non-manufacturing gauge inchedlower to 50.2, marginally above the 50-threshold, thanks solely to the constructio...
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The threat to stock markets comes from China and the Middle East, not the United States.
12Aug By Online DeskNo Comments
China, World

The threat to stock markets comes from China and the Middle East, not the United States.

Back in the 1930s, the French government constructed what it thought was an impregnable defence system to prevent a repeat of the German invasion at the start of the first world war. The Maginot Line might have looked impressive but proved to be a white elephant because when the attack came in 1940 it was in a different place altogether. In the past week the financial markets have displayed something of a Maginot Line mentality. They are right to think there is a threat lurking out there but they are wrong to think the biggest danger is a recession in the US. The real threat comes from elsewhere. To be sure, the US economy is slowing down, but it is not remotely close to recession. Unemployment is rising but from historically low levels. The US central bank, the Feder...
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How Bangladesh’s turmoil may affect its economic growth: Explained
8Aug By Online DeskNo Comments
Asia, World

How Bangladesh’s turmoil may affect its economic growth: Explained

As Bangladesh faces regime change, an expert warned that one of the tasks before the new government will be "to stop the free fall of the economy." It is now feared that the damage from mass violence, unemployment, persisting inflation, and "slowed real GDP [Gross Domestic Product] growth" may impact Bangladesh's economy. Saad Hammadi, a fellow at the Balsillie School of International Affairs, told Al Jazeera on Monday, “The job of the interim and subsequent government will be extremely challenging to stop the free fall of the economy and recover the state at a time when even the global economic and political orders are extremely chaotic.”Thousands of protesters stormed and looted prime minister's residence. Several police stations, buildings and public assets were vandalised and set o...
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Risk or opportunity? Outcomes for China amid worries of a US recession
8Aug By Online DeskNo Comments
China, World

Risk or opportunity? Outcomes for China amid worries of a US recession

Global stock markets, particularly those in Asia, experienced a significant downturn on 5 August 2024, with the Nikkei 225 Index shedding 12.4%, its worst day since the 1987 Black Monday crash. A confluence of factors, including fears of a US recession, had triggered a massive sell-off in stock exchanges worldwide. The ripple effects of a potential US recession are profound and far-reaching. As the US is a major consumer and importer, a slowdown in the American economy can significantly dampen global demand, impacting export-oriented economies in Asia, which rely heavily on the US market. This is particularly concerning given that the US accounts for a substantial share of many Asian countries’ exports. According to the World Bank, the US accounts for more than 15% of China’s and South...
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Bangladesh’s economy is recovering from the epidemic, but it still faces chronically high inflation.
7Aug By Online DeskNo Comments
Asia, World

Bangladesh’s economy is recovering from the epidemic, but it still faces chronically high inflation.

Bangladesh’s economy, which has been in recovery mode since the Covid-19 pandemic’s outbreak, has faced persistently high inflation that hit close to 10% in recent months. The resignation of Sheikh Hasina as the Prime Minister of Bangladesh and the subsequent takeover by the military could lead to further troubles for the economy that is also facing problems of liquidity and forex reserves. Even before the current political crisis, international agencies have called for structural reforms to help it take forward growth and maintain economic stability. However, the country has been one of the fastest growing economies in the world with high GDP per capita. As per its Budget, which was passed on June 30, the country is targeting an inflation rate of 6% and GDP growth rate of 6.75%. Th...
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A concise overview of the Venezuela crisis
6Aug By Online DeskNo Comments
World

A concise overview of the Venezuela crisis

Tension in Venezuela is running high after a government-controlled electoral authority declared Nicolás Maduro the winner of the presidential election and handed him a third consecutive term in office. Not only has the election been described as "undemocratic" by independent observers, but the result announced by the National Electoral Council (CNE) has also been dismissed as fraudulent by the opposition. The European Union, the United States and a number of Latin American nations have refused to recognise the result, calling instead on the CNE to release detailed data from polling stations which the opposition says proves that its candidate, Edmundo González, won by a wide margin. Anti-government protests have flared up and hundreds of people have been arrested by the security f...
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31Jul By Online DeskNo Comments
World

Global growth broadly unchanged amid persistent services inflation

Global growth is projected to be in line with the April 2024 World Economic Outlook (WEO) forecast, at 3.2 percent in 2024 and 3.3 percent in 2025. Services inflation is holding up progress on disinflation, which is complicating monetary policy normalization. Upside risks to inflation have thus increased, raising the prospect of higher for even longer interest rates, in the context of escalating trade tensions and increased policy uncertainty. The policy mix should thus be sequenced carefully to achieve price stability and replenish diminished buffers.
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