IMF cuts growth forecasts for world economies including US, China as omicron spreads: Reuters

IMF cuts growth forecasts for world economies including US, China as omicron spreads: Reuters
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Updated 25 January 2022

IMF cuts growth forecasts for world economies including US, China as omicron spreads: Reuters

IMF cuts growth forecasts for world economies including US, China as omicron spreads: Reuters

The International Monetary Fund lowered its economic forecasts for the United States, China and the global economy on Tuesday, and said uncertainty about the pandemic, inflation, supply disruptions and US monetary tightening posed further risks, reported Reuters.

“We project global growth this year at 4.4 percent, half a percentage point lower than previously forecast, mainly because of downgrades for the United States and China,” Gita Gopinath, the IMF's No. 2 official, wrote in a blog on the latest update of the World Economic Outlook.

The IMF said the rapid spread of the omicron variant had led to renewed mobility restrictions in many countries and increased labor shortages, while supply disruptions were fueling inflation. omicron was expected to weigh on economic activity in the first quarter, but ease up thereafter, given that it was associated with less severe illness, the IMF said.

Global growth is expected to slow to 3.8 percent in 2023, a 0.2 percentage-point uptick from the previous forecast in October, the IMF said, but it said the increase was largely mechanical after current drags on growth dissipate in the second half of 2022.

Overall, the pandemic was now projected to result in cumulative economic losses of $13.8 trillion through 2024, compared to the previous forecast of $12.5 trillion, Gopinath, who previously served as the IMF's chief economist, wrote.

The IMF cut its forecast for US growth by 1.2 percentage points given the failure of US President Joe Biden to pass a massive social and climate spending package, earlier tightening of US monetary policy and continued supply shortages.

The US economy is now forecast to grow by 4 percent in 2022 after expanding 5.6 percent IN 2021, with growth seen easing further to 2.6 percent in 2023, the IMF said.

It downgraded China's forecast by 0.8 percentage point to 4.8 percent in 2022 after 8.1 percent growth in 2021, with growth to edge higher again to 5.2 percent in 2023.

Pandemic-induced disruptions related to China's zero-tolerance COVID-19 policy and protracted financial stress among property developers prompted the downgrade, the IMF said.

The IMF also cut its forecast for the Euro area by 0.4 percentage point to 3.9 percent in 2022, and said growth there would slow to 2.5 percent in 2023.

The Fund cut by 1.2 percentage points each its 2022 growth forecast for Brazil and Mexico, Latin America's largest economies. Brazil is now seen growing 0.3 percent this year and Mexico 2.8 percent, while the region is expected to grow 2.4 percent, 0.6 percentage point below the previous forecast.

India and Japan saw their forecasts upgraded somewhat.

The IMF cautioned that the emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions, while supply chain disruptions, energy price volatility, and localized wage pressures posed further risks.

It revised up its 2022 inflation forecasts for both advanced and developing economies, and said elevated price pressures were likely to persist longer than previously forecast given ongoing supply chain disruptions and high energy prices.

It said inflation was expected to average 3.9 percent in advanced economies and 5.9 percent in emerging market and developing economies in 2022 before subsiding in 2023, aided by moderated growth in fuel and food prices over that period.

While economies were continuing to recover from the shock of the pandemic, the pace of the recoveries was diverging widely between rich and poorer countries, the IMF said.

As advanced economies are projected to return to pre-pandemic trend this year, several emerging markets and developing economies face sizeable output losses, according to the IMF.

Seventy million more people were living in extreme poverty after the pandemic, setting back the progress in poverty reduction by several years, Gopinath wrote in her blog.

The IMF said it was critical to ensure worldwide access to vaccines, tests, and treatments to reduce the risk of further dangerous COVID-19 variants, while many countries would need to raise interest rates to curb inflation pressures.

Gopinath noted that 60 percent of low-income countries were already in or at high risk of debt distress, and urged the Group of 20 to speed up debt restructuring processes and suspend debt service payments while the restructurings are being negotiated.

— Reuters


Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
Updated 17 May 2022

Bank of England official warns of tough times for crypto

Bank of England official warns of tough times for crypto
  • G7 to discuss crypto-asset regulation, says French central banker

RIYADH: Investors in crypto currencies should expect more difficult times ahead as tightening financial conditions around the world stoke appetite for safer assets, Bank of England Deputy Gov. Jon Cunliffe said on Tuesday.

Asked at a Wall Street Journal conference if rising interest rates would ramp up pressure on crypto currencies, Cunliffe said: “Yes, I think as this process continues, as (quantitative tightening) starts in the US ... I think we’ll see a move out of risky assets.” Cunliffe added that the conflict in Ukraine also had the potential to cause a renewed flight to safer assets.

Bitcoin, the world’s largest cryptocurrency, fell as low as $25,401 on Thursday, its lowest since Dec. 2020. It hit a record high of $69,000 in November. 

However, it traded higher on Tuesday, up 0.2 percent to $30,418 as of 08:52 a.m. Riyadh time.

Ether, the second most traded cryptocurrency, was priced at $2,077, up 0.32 percent, according to data from CoinDesk.

G7 meeting

The regulation of crypto-assets is likely to be discussed at a meeting of Group of Seven finance chiefs this week in Germany, French central bank head Francois Villeroy de Galhau said on Tuesday.

“What happened in the recent past is a wake-up call for the urgent need for global regulation,” Villeroy told an emerging markets conference in Paris, referring to recent turbulence in crypto-asset markets.

“Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably ... discuss these issues among many others at the G7 meeting in Germany this week,” he added.

Grayscale to launch digital assets

Grayscale will list an exchange-traded fund in Europe made up of companies representing the “Future of Finance,” the world’s largest cryptocurrency asset manager said in a statement on Monday. 

The ETF, tracking the “Bloomberg Grayscale Future of Finance Index,” will be listed on the London Stock Exchange, Italy’s Borsa Italiana and Germany’s Deutsche Börse Xetra and begin trading on May 17. It is the first time that US-based Grayscale has listed a fund in Europe.

The index contains a mixture of companies involved in digital currencies including asset managers, exchanges, brokers, technology firms, as well as firms directly involved in cryptocurrency mining. “For us, the digital economy is primarily being driven through the proliferation of digital assets,” said Grayscale CEO Michael Sonnenshein.


Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA
Updated 17 May 2022

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

Digital transformation, women participation are the need of the hour, says VP Visa CEMEA

RIYADH: In a post-pandemic world, digital transformation has been one of the main changes for companies and economies as a whole.

In an exclusive interview with Arab News on the sidelines of the Arab Women Forum in Dubai, Visa CEMEA Vice President of Marketing Christine Harb emphasized the need for digital transformation and women’s representation.

“I believe that digital transformation is done in multiple phases. There are pretty traditional organizations in the way they operate and are trying to move into a more agile space,” she said.

Harb added: “When you look at how digital is transforming the world and the metaverse impacting on organizations, there is a need to rethink how people collaborate and engage. So it’s not just about making sure that you have the right tools or enabling employees and people to connect.”

She explained that the shift is not only in digitizing the economy but also in how women’s representation has been a focus for organizations and educational spheres.

“Now, we are already equipped. So maybe we are on the right track. But, still, a lot needs to be done, mainly around policies and regulations that would protect women and open new doors to them, when it comes to, you know, bigger roles, but also allowing them to be their authentic selves,” she concluded.


Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO
Updated 54 min 25 sec ago

Commercial Bank of Kuwait plans to digitize, says CEO

Commercial Bank of Kuwait plans to digitize, says CEO

DUBAI: Elham Mahfouz, the chief executive officer of the Commercial Bank of Kuwait, said that robots will play a major role in the future, with 85 million jobs expected to be taken over in the next two to three years.

Speaking to Arab News at the Arab Women Forum, Mahfouz said that the bank’s next plan is digitization and that, in the next two to three years, the look of banks will be different.

CBK is the only bank to have SwatchPAY, which is a smart-watch payment service, she informed.

Beginning her journey in banking around 35 years ago, Mahfouz climbed up the ladder after starting as a credit analyst. She has been the CEO of the bank for the last eight years, she informed.

“Being in a high position can favor the institution if you want to implement certain kinds of dreams that you have to get the institution in a certain way and pave the way with the team,” she added.

Mahfouz told Arab News that one of the things that stood out to her as a woman working in the banking sector was getting more support from males than females.

Self-development, focus, and patience are factors that have influenced her journey to reaching the top post, Mahfouz said.

She added that the following generations are tech-savvy and are very smart when it comes to technological advances. However, Mahfouz said they have to have patience and read more.


Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo
Updated 17 May 2022

Women should not relinquish their rights in business, says Suzy Kanoo

Women should not relinquish their rights in business, says Suzy Kanoo

DUBAI: When it comes to taking a huge step like running a family business, most entrepreneurs would flinch, especially in a male-dominated industry. Female successors would instead pass their rights to a male than take the path of leadership.

In an exclusive interview with Arab News, the CEO and president of Khalil bin Ebrahim Kanoo Co. and International Motor Trading Agency, Suzy Kanoo, shared her advice on what women should do when put in that position, and it’s not relinquishing their rights.

Speaking on the sidelines of the Arab Women Forum event in Dubai, Kanoo, who has also authored “Hear Us Speak: Letters from Arab Women,” expressed that one of the main obstacles women face in the business world is not believing in themselves.

“The Japanese call it Ikigai. Find a purpose and passion, do it well, and make sure it benefits society. Whatever it is, anything that you think is insignificant isn’t insignificant for that individual. So, find that purpose and do it well,” she added.

Kanoo has been the voice of the Arab world, and her book discusses real-life stories about Arab women that have experienced physical or emotional abuse but outlived their circumstances.

“My book emphasizes that never let a male, whether a cousin or a brother, force you or coerce you into signing documents asking you to relinquish your rights of the family business,” she said.

Her book brought to light the circumstances of the marginalized women who succumbed to male domination and gave away what was rightfully theirs.

However, Kanoo feels those were different times. She finds Gen Z is the most empowered generation. They believe that nothing should stop them from achieving their goals. In addition, they understand technology better than the previous generations.

But the struggle is not over. Even emancipated women have to fight on multiple fronts. An accomplished writer and businesswoman, Kanoo is currently facing problems with the automotive business. Her production declined by 50-60 percent.

Does that mean she is letting off the reins? No chance. The feisty lady is expanding into different sectors, opening a restaurant from personal investments and launching an advisory company for blockchain technology.

 

 

 

 

 


Egypt expects $8bn investments in energy sector this year, minister says 

Egypt expects $8bn investments in energy sector this year, minister says 
Updated 17 May 2022

Egypt expects $8bn investments in energy sector this year, minister says 

Egypt expects $8bn investments in energy sector this year, minister says 

RIYADH: Egypts expects that the value of investment in the energy sector would range between $7 to $8 billion during the current fiscal year, the minister of petroleum and mineral resources told Alarabiya. 

Tarek El-Molla added that the figures were under review with international companies, noting that changes in global oil prices require increased investment plans.

He said the government is currently focusing on maximizing the use of natural resources, confirming that Egypt aims to return to the oil production levels of 5 years ago.