Page 9 - Global Economy

Sri Lanka's economy records 4.5% growth in fourth quarter of 2023

After six successive quarters of negative growth, Sri Lanka's bankrupt economy is estimated to have recorded a growth of 4.5 per cent year-on-year in the fourth quarter of 2023, the Central Bank announced here on Tuesday. It was only during the third quarter of 2023 that the economy recorded positive growth after six successive quarters of negative growth experienced by the cash-strapped economy. The headline inflation, as measured by the year-on-year change in the Colombo Consumer Price Index, had decelerated to 5.9 per cent in February from 6.4 per cent in January. The gross official reserves improved to USD 4.5 billion by the end of February 2024, which includes the swap facility from the People's Bank of China. Governor Nandalal Weerasinghe said the reserve buildup was better than the Central Bank's expectations. The reserve buildup was supported by considerable net purchases by the Central Bank from the domestic foreign exchange market amidst increased foreign currency inflow

Inflationary pressure

Fiscal expansion increased inflation in the developed world

Switzerland unexpectedly cut key interest rate by 25 basis points to 1.5%

Officials in Zurich lowered their benchmark to 1.5%, the first such reduction for one of the world's 10 most-traded currencies since the pandemic abated

Bank of England keeps key interest rate unchanged at 16-yr high of 5.25%

The Bank of England kept its main interest rate unchanged at a 16-year high of 5.25 per cent on Thursday even though inflation continues to drop from multi-decade peaks. The decision was widely anticipated in financial markets and comes a day after the US Federal Reserve also left its key interest rate unchanged. But unlike the Fed, the Bank of England gave few explicit indications that it was getting ready for a series of interest rate reductions in the months to come. The Swiss National Bank went the other way on Thursday, with a surprise cut to its main interest rate by a quarter of a percentage point. Market expectations that lower UK interest rates were on the horizon got a boost Wednesday with news that inflation fell to a 2.5-year low of 3.4 per cent in February more than anticipated and is now not far off the Bank of England's target rate of 2 per cent. The bank's rate-setting Monetary Policy Committee acknowledged that inflation has been trending lower and could fall bel

British businesses keep up recovery but prices still a worry, shows PMI

Closely watched by the BoE ahead of its 1200 GMT interest rate decision, the S&P Global Composite Purchasing Managers' Index (PMI) inched down to 52.9 in March from 53.0 in February

Zimbabwe lets currency free-fall, working on exchange rate backed by gold

The country's local dollar has weakened against the US dollar every day in 2024, sending the price of a single loaf of bread from Z$6,105 to Z$19,357 in a mere 11 weeks

Bank of Japan ends its negative interest rate policy, first hike in 17 yrs

Japan's central bank raised its benchmark interest rate Tuesday for the first time in 17 years, ending a longstanding policy of negative rates meant to boost the economy. The Bank of Japan's short-term rate was raised to a range of 0 to 0.1% from minus 0.1% at a policy meeting that confirmed expectations of a shift away from ultra-lax monetary policy. The interest rate hike was the first since February 2007. The BOJ had remained cautious about normalizing monetary policy, or ending its negative benchmark borrowing rate, even after data showed inflation at about its target rate of 2% in recent months.

Russia goes to presidential polls with war economy lifting living standards

Wages have soared by double digits, the ruble has stabilized, and poverty and unemployment are at record lows

Despite war, pandemic, global trade growth likely to accelerate in 2024

Globalisation reached a record high in 2022 and stayed nearly as high in 2023, despite various global shocks over the past decade, such as the Covid-19 pandemic, wars in Ukraine and Gaza, and the USChina trade conflict, a report said on Wednesday. The "New DHL Global Connectedness Report 2024" by DHL and New York University's Stern School of Business, released here, also said that the share of global output traded internationally was back to a record high level in 2022. After a slowdown in 2023, trade growth is forecast to accelerate in 2024, it said. Trade growth played a crucial role in boosting connectedness. The report tracks how flows of trade, capital, information, and people move around the world and measure the globalisation of 181 countries and territories. The globalisation of information flows has notably surged over the past two decades, even though the latest data show a slowdown in their growth, partly due to less research collaboration between the US and ...

JPMorgan's CEO urges US Fed to wait past June before cutting rates

Markets see an 84% probability the Fed will lower rates in June and have priced in 90 basis points of cuts for the year

Biden signs package of spending bills hours before shutdown deadline

President Joe Biden on Saturday signed a USD 460 billion package of spending bills approved by the Senate in time to avoid a shutdown of many key federal agencies. The legislation's success gets lawmakers about halfway home in wrapping up their appropriations work for the 2024 budget year. The measure contains six annual spending bills and had already passed the House. In signing it into law, Biden thanked leaders and negotiators from both parties in both chambers for their work, which the White House said will mean that agencies may continue their normal operations. Meanwhile, lawmakers are negotiating a second package of six bills, including defense, in an effort to have all federal agencies fully funded by a March 22 deadline. To folks who worry that divided government means nothing ever gets done, this bipartisan package says otherwise," Senate Majority Leader Chuck Schumer, D-N.Y., said after lawmakers passed the measure Friday night just hours before a deadline. He said the

Nation first policy helped manage oil prices despite global conflicts: Puri

The Union Minister for Petroleum and Natural Gas said 85 per cent of India's crude requirements are met by imports, with the price of crude in the international market being the benchmark

China's consumer prices up first time in 6 months on Lunar New Year gains

The consumer price index (CPI) climbed 0.7% year-on-year in February, data from the National Bureau of Statistics (NBS) showed on Saturday

Fitch upgrades Turkey's sovereign rating to B+ on tighter monetary policies

"Upgrade reflects increased confidence in the durability and effectiveness of policies implemented since the pivot in June 2023," Fitch said

China's exports, imports beat estimates, trade surplus of over $125 bn

China's exports and imports for the first two months of the year beat estimates, an indication that demand may be improving as Beijing attempts to boost economic recovery. Exports for the January-February period grew 7.1 per cent from a year earlier, customs data released Thursday showed, higher than the 2.3 per cent rise in December. Imports rose 3.5 per cent from the same time last year, up from a 0.2 per cent growth in December. China posted a trade surplus of USD 125.16 billion. Though China usually releases trade data monthly, the data for the first two months of the year are combined to avoid disruptions from the weeklong Lunar New Year holidays, when many businesses and factories are closed. The world's second-largest economy has struggled to bounce back after the pandemic, as it grapples with weaker demand globally as well as a domestic property crisis that remains a drag on the economy. Demand for Chinese exports has also been weak since the Federal Reserve and central b

Feb consumer price inflation forecast to edge down to 4-month low: Poll

Rises in food prices, which make up almost half of the consumer price index (CPI) basket and experience sharp swings often due to uneven monsoons, have recently outpaced overall inflation

Australian, Vietnamese PMs elevate their nations' economic relations

Australian and Vietnamese prime ministers on Thursday discussed ways of improving an already booming economic relationship, as part of Australia's strategy to diversify trade away from China. Vietnamese Pham Minh Chinh's official state visit came after he attended a summit of Southeast Asian leaders this week co-chaired by his Australian counterpart Anthony Albanese and Laotian Prime Minister Sonexay Siphandone. The Vietnam bilateral relationship has proved a success in Australia's hedge against Chinese economic moves. Australia says China's official and unofficial trade barriers have cost Australian exporters up to 20 billion Australian dollars (USD 13 billion) a year since 2020, though those steps have been relaxed gradually since Albanese's government came to power in 2022. Albanese said trade between Australia and Vietnam had increased 75 per cent in two years to USD 25.7 billion in 2022, the most recent year for which data was available. Vietnam had become Australia's ...

Federal Reserve in no rush to cut interest rates, says Jerome Powell

In prepared testimony to a House panel Wednesday, the Fed chief said it will likely be appropriate to begin lower borrowing costs "at some point this year," but made clear they're not ready yet

Hiring spree: US companies added 140,000 jobs in February, shows ADP data

Private payrolls increased by 140,000 last month after a 111,000 gain in January, according to figures published Wednesday by the ADP Research Institute in collaboration with Stanford Digital Economy

China retains 5% growth target as economy struggles to shake off slowdown

The country expects to create over 12 million jobs in urban areas and keep the surveyed urban unemployment rate at around 5.5 per cent this year, Chinese Premier Li Qiang said