World

13Jun By Online DeskNo Comments
Market, USA, World

US Fed holds key rates elevated at 23-year high, expects single 0.25% reduction in 2024; 5 key takeaways

The US Federal Reserve announced its fourth interest rate decision for 2024 on Thursday, after a two-day Federal Open Market Committee (FOMC) meeting, where it unanimously voted to leave the key benchmark interest rates unchanged at 5.25 per cent - 5.50 per cent for the seventh straight meeting, which was broadly in line with Wall Street estimates and market analysts. The US central bank has maintained its key overnight interest rate at the 23-year high-mark since July 2023. Despite US inflation falling further to the target range in recent months, the Fed does not expect to reduce interest rates until it has “gained greater confidence” that inflation is moving sustainably towards its two per cent level.  Fed policymakers also slightly raised the US core inflation forecast for this ...
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To revive the economy, we want humility rather than arrogance.
13Jun By Online DeskNo Comments
World

To revive the economy, we want humility rather than arrogance.

The economy appears to be at a crossroads. For a variety of reasons, the general optimism people had about it in pre-pandemic times has been replaced with apprehensions. And while a privileged minority, sitting in their high castles, continue to enjoy a larger and larger share of the fruits of "development," it is becoming obvious that the vast majority are increasingly struggling.  On a national scale, what is worrying is that economic growth itself is slowing down. On April 2, the World Bank revealed that it projects Bangladesh's real GDP growth to remain relatively subdued at 5.6 percent in the current fiscal year and at 5.7 percent in the following year, lower than the average annual growth rate of 6.6 percent over the decade preceding the Covid-19 pandemic. Similarl...
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Thanking Bangladesh and India for Crisis Assistance
13Jun By Online DeskNo Comments
World

Thanking Bangladesh and India for Crisis Assistance

Colombo, Jun 13 (PTI) Sri Lankan President Ranil Wickremesinghe on Thursday recalled the assistance received from India and Bangladesh during the early days of the worst economic crisis and said the island nation would not have been able to recover from the turmoil had these countries not helped. Expressing gratitude to the government and Reserve Bank of India, as well as the government and Central Bank of Bangladesh, for their financial support, which he described as lifesaving, the president in his keynote address at the inaugural session of the 45th “SAARCFINANCE” Governors' Meeting and Symposium here said the assistance, along with aid from the United States Agency For International Development (USAID) and the World Bank, was pivotal in stabilising the country's economy. “I must...
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11Jun By Online DeskNo Comments
Asia, Market, World

Global Growth Is Stabilizing for the First Time in Three Years

WASHINGTON, June 11, 2024—The global economy is expected to stabilize for the first time in three years in 2024—but at a level that is weak by recent historical standards, according to the World Bank’s latest Global Economic Prospects report. Global growth is projected to hold steady at 2.6% in 2024 before edging up to an average of 2.7% in 2025-26. That is well below the 3.1% average in the decade before COVID-19. The forecast implies that over the course of 2024-26 countries that collectively account for more than 80% of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19. Overall, developing economies are projected to grow 4% on average over 2024-25, slightly slower than in 2023. Growth in low-income economies is ex...
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According to UBS Securities, the Indian economy is in a goldilocks period.
10Jun By Online DeskNo Comments
World

According to UBS Securities, the Indian economy is in a goldilocks period.

The Indian economy is in a goldilocks phase with strong growth and manageable macro stability risks, said UBS Securities on Monday, adding that the economy is likely to grow by 7% this fiscal year. In a webinar on Post-Election Indian Economy: Mapping India’s Growth Path, Tanvee Gupta Jain, Chief India Economist at UBS, said India is likely to maintain a potential growth of 6.5-7% year on year between FY26-30. India’s potential growth could benefit from digitalisation adoption, increased services exports and manufacturing push and implementation of hard reforms will take the potential growth rate even higher than 7%. “While political stability should help ensure continuity in policy agenda, we see risk of populist bias in the third term (targeted towards lower- income strata) and...
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As the economic crisis hits, Iranians cast ballots in presidential elections.
10Jun By Online DeskNo Comments
World

As the economic crisis hits, Iranians cast ballots in presidential elections.

Asia-Pacific: The region's approach to making a green economy a priority In the vast expanse of the Asia-Pacific (APAC) region, the pressing need to tackle the dual challenges of environmental sustainability and economic growth has reached a critical juncture. The headwinds of climate change, coupled with unequal technological advancements, are intensifying the challenges to the region’s sustainable growth. Estimates suggest that as much as 63% ($19 trillion) of the region’s GDP is at risk due to nature loss caused by human activity and climate change. Amid these challenges, Asia and the Pacific remains the fastest growing region in the world. Sustaining this trajectory depends on investments by governments and businesses, on the digital economy and policies enabling innov...
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3Jun By Online DeskNo Comments
Asia, Market, World

World Economic Situation and Prospects: June 2024 Briefing, No. 181

Enhanced global economic outlook amid persistent vulnerabilities Global macroeconomic outlook The global economic outlook has improved since the previous forecast released in January 2024. Despite the most aggressive monetary tightening in decades, a hard landing scenario of the United States economy has largely receded. Most major economies have managed to bring down inflation without increasing unemployment and triggering a recession. However, the outlook is only cautiously optimistic as higher-for-longer interest rates, debt difficulties, and escalating geopolitical risks will continue to challenge stable and sustained economic growth. Ever-worsening climate shocks continue to pose additional challenges to the global economic outlook, threatening decades of development gains, esp...
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31May By Online DeskNo Comments
Asia, China, Market, World

Has investment banking lost its appeal among graduates from China’s elite schools?

In April, six months into an internship at an investment firm in Beijing, 24-year-old Wang Xuan (pseudonym) was told by Human Resources (HR) that he would not be offered a full-time position. Wang was unexpectedly calm when he got the news, remarking: “I anticipated this.” Signs of trouble emerged last year. He had come across reports of job cuts within the sector and got wind of discussions in the pantry regarding unpaid bonuses from the previous year. Senior colleagues openly expressed a desire to “lie flat” and resign themselves to the possibility of being laid off. Wang sighed, “Longtime employees might receive a retrenchment package of up to a million RMB. With that sum, they can afford to take a gap year and recharge. But for fresh graduates like us, it’s all about facing the ...
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Why do crises occur so frequently when we can prevent them and understand why they occur?
30May By Online DeskNo Comments
World

Why do crises occur so frequently when we can prevent them and understand why they occur?

One of my favourite exam questions is: "Given our extensive knowledge about the causes of financial crises and the measures needed to prevent them, why do they happen so frequently?" We have had a deep understanding of financial crises for over 200 years. A 19th-century central banker dealing with the severe crisis of 1866 would find few surprises in the more recent ones. All crises share the same fundamental causes. Excessive leverage renders financial institutions vulnerable to even small shocks. Self-preservation in times of stress drives market participants to prefer the most liquid assets. System opacity, complexity, and asymmetric information make market participants mistrust one another. These three fundamental vulnerabilities have been behind almost every financial crisis in...
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Emergency Power Source? How to Stop AI From Making the Next Economic Crisis Worse
30May By Online DeskNo Comments
World

Emergency Power Source? How to Stop AI From Making the Next Economic Crisis Worse

Good morning. It is an honor to join you here at the AI for Good Global Summit. We are hearing about some of the extraordinary ways Generative Artificial Intelligence could benefit our societies, including helping us live healthier lives and accelerating scientific breakthroughs. Many experts also believe the technology could provide significant economic benefits, for example by providing a serious boost to productivity. This could help lift the global economy at a time when the growth outlook for the medium term is the weakest in decades. This said, many also agree that AI’s promise comes with considerable uncertainty and significant risks. To date, most warnings have focused on security, privacy, misinformation, and ethical concerns. Taking an economic perspective, I would like...
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