IMF trims 2023 global growth projections over stress in financial sector

The IMF trimmed its global-growth projections, warning of high uncertainty and risks as financial-sector stress adds to pressures emanating from tighter monetary policy and Russia’s war in Ukraine.

Most global central banks may be either close to a peak or already done with interest-rate hiking, auguring a hiatus before possible monetary loosening comes into view. Policymakers in South Korea, Canada and Peru stayed on hold this week.

A key measure of US inflation showed hints of moderating in March, but likely not by enough to dissuade the Federal Reserve from raising interest rates again next month.

Just three years ago, when OPEC+ oil giants fell out, the US found itself playing the role of peacemaker. Now it looks more like their target. The announcement of output cuts, which lifted oil prices by about $5 a barrel, already means recession risks are bigger than they otherwise would have been — because consumers spending more on energy will have less cash left for other stuff — and inflation will be higher.

China’s consumer and producer inflation remained muted in March, suggesting more monetary or fiscal stimulus may be needed to strengthen the economy’s recovery. The consumer price index rose 0.7% last month from a year ago, less than the 1% forecast by economists. Producer price deflation worsened to 2.5%, the lowest since June 2020.

South African President Cyril Ramaphosa set a target of attracting 2 trillion rand ($110 billion) of new investment in the next five years, as executives pleaded with his government to urgently address the nation’s energy crisis, fix crumbling infrastructure and end rampant crime. The energy crisis alone is robbing the economy of as much as 899 million rand a day, according to the nation’s central bank.