Category: TRENDS ON THE GLOBAL ECONOMIC FRONT

The widespread shortage of natural gas across Europe and parts of Asia is forcing factories, cities, and utilities to switch to oil, which could soon add 500,000 barrels a day in new demand to a commodity already in short supply around the world, the International Energy Agency (IEA) has reported. That would create a deficit...

Recep Erdogan, Turkey’s president, abruptly fired two central bank deputy governors and one policy committee member who were leery of cutting interest rates yet again as the country struggles with runaway inflation. Erdogan has serially fired top bank officials over the past 12 months, most notably bank governor Naci Agbal, who was shown the door...

Five highly-regarded German research institutes have cut the country’s 2021 growth outlook by more than a third, from 3.7 percent to 2.4, citing shortages of raw materials in manufacturing and the COVID virus’s impact on consumer spending. The economic resurgence earlier this year was not as strong or enduring as expected “and that was because...

In its 12 October World Economic Outlook report, the International Monetary Fund (IMF) lopped a full percentage point off its forecast for U.S. economic growth this year, reducing it to 6.0 percent in the biggest single downgrade of any G7 country. The cut was prompted by soft third-quarter consumer spending, due in part to a...

The tangled global supply chain is going to become even more knotted before it improves, Moody’s warned on 11 October. “As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner,” the analytics firm said.  “Border...

Exchange-traded funds (ETFs) focused on U.S. stocks have a hidden vulnerability: as much as 25 percent of the revenues of the U.S. companies the funds own are dependent on China’s economic performance, according to a Bank of America (BoA) analysis. “What happens in China doesn’t stay in China,” the report said, noting that Beijing’s crackdown...

Wall Street firms have brushed aside concerns about recent upheaval in China—including the crackdown on businesses by the Chinese Communist Party—and see the country as a good bet. The New York Times reported that BlackRock, the largest asset manager on the planet, recommended that investors increase their exposure to China while bankers from J.P. Morgan and...

SUPPLY CHAIN CLOG COMPLICATIONS Snarls in global supply chains are due, in part, to different areas of the world addressing the latest round of COVID infections at different rates, The Wall Street Journal reported. In the West, vaccination campaigns are well under way; countries and companies have emerged from shutdowns or cutbacks and need materials...

PRIVATE EQUITY FIRMS OFFER SKY-HIGH PRICES FOR BUYOUTS Private equity firms are bidding for acquisitions with offers that are the highest this century, in some cases offering 70 percent above share prices in effect before bidding began, the Financial Times reported. This year, takeover companies have bid an average of 45 percent above prevailing share...

South Korea produces almost half of the world’s batteries for electric vehicles, but as demand for EVs is rising, the country’s battery makers are facing shortages of a range of materials, as the global commodities supercycle gains momentum (“Commodities Supercycle Underway?” 11 May, 2021). The country has relied on imports of rare earth minerals and...