Central banks risk driving the global economy into a “devastating” recession next year if they raise interest rates too much too quickly, the World Bank has warned. “Central banks around the world have been raising interest rates with a degree of synchronicity not seen over the past five decades, a trend likely to continue well...
Category: TRENDS ON THE GLOBAL ECONOMIC FRONT
WHEN THE ECONOMY FALLS JOBS GO WITH IT
Dragflation: Economic growth declining and inflation rising… plus the pressure of interest rate hikes that are drying up the cheap money pool are causing companies in many sectors to lay off employees. To illustrate the employment trends and the socioeconomic implications, each week we will list job losses: GAP cutting 500 corporate positions Checkout.com will...
SPOTLIGHT: INFLATION
CENTRAL BANKS FEAR INFLATION DEFINES A NEW LONG-TERM REALITY Central bankers fear that the recent, prolonged global rise in prices has sunk roots into the global economy, The Wall Street Journal reported. To counter price pressures brought by chronic shortages of labor, materials, and cheap energy, the banks may need to raise interest rates significantly...
SPOTLIGHT: CHINA
CHINA SOLIDIFYING ITS POSITION AS MANUFACTURER TO THE WORLD Despite corporations’ new determination to bring supply chains geographically closer to their factories, China is likely to continue to dominate global manufacturing, The Wall Street Journal reported. China’s share of global factory output edged up from 13 percent in 2019 to 15 percent post-COVID and probably...
OCEAN SHIPPING RATES HAVE SUNK 60 PERCENT THIS YEAR
During the current peak season for shipping holiday gift items from Asian factories to the West, the cost of sailing a shipping container continues to fall, The Wall Street Journal reported. There are two reasons. Retailers ordered early to ensure deliveries and inflation has shrunk consumer demand. As a result, the cost to send a...
INFLATION IN TURKEY PASSES 80 PERCENT
Turkey’s inflation rate clocked in at 80.2 percent in August, rising from 79.6 percent in July to reach its highest level since 1998, according to the government’s Turkish Statistical Institute. However, a consumer price index kept by the Istanbul Chamber of Commerce in the country’s largest city showed an annual growth rate of almost 100...
AUSTRALIA, CANADA BOOST INTEREST RATES AGAIN
Last week, the Bank of Canada boosted its key interest rate by another three-quarters of a point, lifting it to 3.25 percent, the first time the rate has topped 3 percent since 2008 during the Great Recession. The latest hike was the fifth in as many meetings of the bank’s rate-setting committee and followed a...
YEN’S VALUE SAPPED BY CENTRAL BANK’S INSISTENCE ON LOW INTEREST RATE
The Bank of Japan’s intransigence in maintaining rock-bottom interest rates while other nations raise theirs sank the yen last week to its lowest value against the dollar in 24 years, reaching ¥144 to the dollar. The yen has given up about 20 percent of its value so far this year, languishing at ¥142.76 on 12...
TOP 2022 TREND, SELF-SUFFICIENT: INDIA’S ECONOMY THRIVES AS WORLD’S SLOWS
India’s GDP will expand by 7.4 percent this year, the country’s government predicts, approaching triple the pace of the 2.9 percent global growth the World Bank now projects. The reason: India’s economy is driven by domestic demand consumption, not exports. However, exports are still important, especially now that the rupee’s value has declined and made...
GERMANY RETURNS TO COAL AS NATURAL GAS PRICES SOAR
Germany now generates about a third of its electricity from coal, among the dirtiest fossil fuels, as natural gas supplies from Russia have disappeared and gas prices have skyrocketed as much as sevenfold in the past year. Last year, coal provided 27 percent of the country’s electricity. Gas prices have tripled since late February alone...