Charting the Global Economy: IMF Sees a Soft Landing for Europe – BNN Bloomberg

Europe’s Economy Expected to Avoid Recession, but Inflation Recovery Takes Time

(Bloomberg) — According to the International Monetary Fund (IMF), Europe’s economy is projected to avoid a recession. However, it may take several years to bring inflation back to normal levels.

Growth Outlook in Asia

The growth outlook in Asia appears bleak. China is struggling to attract foreign investment, Hong Kong’s growth lags behind, and Indonesian exports are deteriorating.

Inflation Expectations in the US

Inflation expectations in the US continue to rise as consumers anticipate higher gas prices. Data from the Census Bureau also reveals that inflation is causing significant financial stress for many Americans.

Charts on the Latest Developments in the Global Economy

Europe

• Europe’s economy is expected to remain stable, even with ongoing interest-rate increases aimed at taming inflation. However, rising wages pose a risk of further inflationary pressures if not accompanied by improvements in productivity, as stated by the IMF.
• Poland’s central bank, concerned about inflation, has reversed its stance less than a month after the opposition won a parliamentary election. This raises speculation about the influence of politics on the governor’s policy decisions.

Asia

• China is struggling to attract foreigners back as data shows more direct investment flowing out of the country than coming in. This suggests that companies may be diversifying their supply chains to reduce risks. Foreign direct investment in China contracted for the first time since records began in 1998, falling by $11.8 billion in the July-to-September period.
• Hong Kong has lowered its economic growth forecast for this year, indicating ongoing challenges for the financial hub despite a boost from the tourism revival. Weaker-than-expected third-quarter GDP growth highlights significant hurdles to economic recovery.
• Indonesia plans to increase the disbursement of social assistance in the coming months after government underspending halted seven consecutive quarters of above-5% growth. The country’s slowest growth pace in two years underscores the obstacles to recovery for Southeast Asia’s largest economy. Exports, a key driver of growth, experienced the largest contraction since 2020.

US

• Long-term inflation expectations among US consumers have reached the highest level since 2011. Concerns about high borrowing costs and the economy’s prospects have also increased, negatively impacting sentiment. Expectations for gasoline prices in the short and long run have risen to their highest point this year, despite the current downward trend in pump prices since late September.
• In the third quarter, US households increased their credit card usage, contributing to robust economic growth. However, Millennials, individuals with student debt, and those with auto loans are falling further behind on payments.
• Although inflation may have subsided, it continues to impose financial strain on American households, according to Census Bureau polling. Southern states have the highest incidence of inflation stress.

Emerging Markets

• Retail sales in Brazil exceeded expectations after policymakers committed to maintaining their current pace of interest rate cuts for the coming months.
• Saudi Arabia, the world’s largest oil producer, aims to become a key hub for manufacturing batteries for electric vehicles. This move is part of the country’s efforts to diversify its economy and develop a domestic auto industry.

World

• Australia’s central bank has resumed raising interest rates as anticipated, while signaling a higher threshold for further tightening. Poland’s central bank unexpectedly halted its easing cycle, and Mexico maintained record-high rates for a fifth consecutive meeting. Peru, on the other hand, reduced interest rates for the third consecutive month.
• China is revamping its lending approach to developing nations, which may help the country maintain its lead over the US and its Group of Seven allies as the largest official creditor. Beijing is shifting away from large bilateral deals that were prevalent when it launched the Belt and Road Initiative, focusing more on lending to infrastructure projects.

–With assistance from Rebecca Choong Wilkins, Shawn Donnan, Claire Jiao, Francine Lacqua, John Liu, Xinyi Luo, Mirette Magdy, Jonnelle Marte, Reade Pickert, Andrew Rosati, Zoe Schneeweiss, Grace Sihombing, Alex Tanzi, Fran Wang, and Alexander Weber.

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SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 2: Zero Hunger
• SDG 3: Good Health and Well-being
• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 16: Peace, Justice, and Strong Institutions

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
• Target 2.1: By 2030, end hunger and ensure access by all people, in particular, the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
• Target 3.4: By 2030, reduce by one-third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being.
• Target 4.1: By 2030, ensure that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes.
• Target 5.1: End all forms of discrimination against all women and girls everywhere.
• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average.
• Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries.
• Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
• Target 16.6: Develop effective, accountable, and transparent institutions at all levels.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.2.1: Proportion of population living below the national poverty line, by sex and age group.
• Indicator 2.1.1: Prevalence of undernourishment.
• Indicator 3.4.1: Mortality rate attributed to cardiovascular disease, cancer, diabetes, or chronic respiratory disease.
• Indicator 4.1.1: Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex.
• Indicator 5.1.1: Whether or not legal frameworks are in place to promote, enforce, and monitor equality and non-discrimination on the basis of sex.
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age, and persons with disabilities.
• Indicator 10.1.1: Growth rates of household expenditure or income per capita among the bottom 40 percent of the population and the total population.
• Indicator 11.3.1: Ratio of land consumption rate to population growth rate.
• Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
• Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
• Indicator 16.6.2: Proportion of the population satisfied with their last experience of public services.

SDGs, Targets, and Indicators Table