RIYADH: The ongoing Russian-Ukraine conflict and virus lockdowns in China continue to affect the global economy with several countries at the risk of recession.
Germany saw only a slight rise in its economic growth whereas Singapore’s gross domestic product also indicated minimal growth.
Investment banks have slashed China’s growth outlook after COVID-19 disruption.
US core capital goods orders
New orders for US-made capital goods rose less than expected in April, pointing to some moderation in business spending on equipment early in the second quarter, and headwinds are growing from rising interest rates and tightening financial conditions.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.3 percent last month, the Commerce Department said on Wednesday.
Spanish April industrial prices rise
Spanish industrial production prices rose 45 percent in the 12 months through April down from 47 percent in the 12 months period through March as energy prices increases slowed down, National Statistics Institute said on Wednesday.
The price increase slowed down for the first time since February 2021.
INE revised up the year-on-year March increase to 47 percent from a previous 46.6 percent.
German economy sees growth
The German economy grew in the first quarter, in line with expectations, despite difficult economic conditions caused by the war in Ukraine and the pandemic, data showed on Wednesday.
Europe’s largest economy grew by 0.2 percent quarter on quarter and by 3.8 percent on the year, adjusted for price and calendar effects, the Federal Statistics Office said. A Reuters poll had forecast growth of 0.2 percent and 3.7 percent, respectively.
New Zealand raises cash rate
New Zealand’s central bank delivered its fifth straight interest rate hike on Wednesday and signaled a much more aggressive tightening path as authorities seek to reduce the second-round effects of runaway inflation.
The Reserve Bank of New Zealand raised on Wednesday the official cash rate by 50 basis points to 2 percent, a level not seen since November 2016. Crucially, a hawkish RBNZ now projects the cash rate will double to 4.0 percent over the next year and remain there into 2024.
Although nearly all economists polled had expected the central bank to hike the cash rate by 50 basis point, its forecast cash rate track was more aggressive than most expected.
Singapore sees 2022 GDP at lower end
Singapore’s economy expanded more than initially estimated in the first quarter but annual GDP will likely be in the lower half of the government’s forecast range, officials said on Wednesday, citing war in Ukraine and supply chain disruptions.
The Southeast Asian financial hub is often seen as a bellwether for global growth as international trade dwarfs its domestic economy.
Gross domestic product grew 3.7 percent year-on-year in the first quarter, the Ministry of Trade and Industry said, higher than the government’s advance estimate of 3.4 percent but matching analysts’ forecasts in a Reuters poll.
The MTI maintained its 2022 GDP growth forecast at 3 percent to 5 percent, but said growth is more likely to come in at the lower half of this range, due to uncertainties stemming from the Russia-Ukraine conflict and stringent COVID-19 measures in China.
China growth outlook
Global investment banks and ratings agencies have slashed their China 2022 GDP growth outlooks, as COVID-19 induced lockdowns and other stringent coronavirus containment measures take a heavy toll on the world’s second-largest economy.
J.P. Morgan and UBS became the latest investment banks to downgrade their Chinese growth projections for 2022 by cutting full-year GDP estimates to 3.7 percent and 3 percent from 4.3 percent and 4.2 percent, respectively, forecast earlier.
A median forecast of nine financial institutions now predicts China’s broad economy to grow 4 percent this year, marking a huge discrepancy from the government’s target of around 5.5 percent. The economy expanded 8.1 percent in 2021.
(With input from Reuters)