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IMF Reduces Global Growth Rate Forecast For 2021, Keeps Forecast For 2022 Unchanged: Economic Conclusion

The IMF has slightly revised its GDP growth forecast for 2021 downwards to 5.9% from the 6% previously announced. The international organization has cited supply chain problems and growing inflationary pressures as obstacles that could hamper the recovery of the global economy.

While the downgrade may seem like a slight change, the IMF said in its report that “the outlook for the group of low-income developing countries has darkened dramatically due to worsening pandemic dynamics.”

The report also mentions the disparities in economic prospects between different countries, as low-income countries are likely to face lower growth and more poverty as well as significantly lower vaccination rates.

Global growth forecast for 2022 remained unchanged at 4.9%.

The United States has seen its growth forecast for 2021 significantly downgraded from 7% to 6%.

China’s forecast has been reduced for 2021 and 2022 to 8% and 5.6% respectively, while the Eurozone forecast has been raised to 5% for 2021, up from the previous projection of 4, 6%.

Inflation in the United Arab Emirates

The UAE’s consumer price index saw an annual increase in August, turning positive for the first time in 13 months. It stood at 0.55% in August, following a drop of 0.02% the month before.

Prices for entertainment and cultural services, as well as educational services, experienced the highest annual inflation.

Egyptian trade balance

Egypt’s trade deficit narrowed 14.6 percent in July to $ 2.88 billion, from $ 3.37 billion in the same month last year, according to the Central Agency for Public Mobilization and statistics.

Exports jumped from an annual growth rate of 31.5%. Exports of plastics and ready-to-wear saw the strongest growth, increasing by 58% and 23.3% respectively.

Unemployment in the UK

Data from the Office for National Statistics showed that the unemployment rate in the UK fell to 4.5% during the period June to August, the lowest in a year, as the labor market continued to sit up.

However, the rate remained 0.5 percentage point higher than it was before the pandemic.

south korean interest rate

The Central Bank of Korea kept the country’s interest rate unchanged at 0.75% at its October meeting. However, it is possible that policy will tighten in November, as policymakers may be grappling with rising inflation and household debt.

Industrial production

Turkey’s industrial production grew at an annual rate of 13.8 percent in August, down from 9.7 percent in July, according to the Turkish Statistical Institute. Capital goods and intermediate goods recorded the highest rates, increasing by 20.5% and 15.4% respectively.

Meanwhile, Mexico’s industrial production continued its positive momentum with annual growth of 5.5 percent in August. However, this is the fifth month in a row that growth has collapsed as last year’s weak base effects start to lose importance. The increase in production was mainly driven by an 8.7% growth rate in construction and an annual increase in manufacturing of 6.6%, official data revealed.

India’s industrial production also saw an increase of 11.9% in August, a rate slightly higher than the 11.5% recorded the previous month. Mining and electricity largely induced this production growth according to data from the Ministry of Statistics and Program Implementation.

Malaysian government data showed that the country’s industrial production declined at an annual rate of 0.7 percent in August, continuing its downward trend albeit at a slower pace. In July, industrial production fell 5.1%. While manufacturing output rose 0.6 percent in August, electrical and mining activity declined 4.8 percent and 4.2 percent respectively.

Russian inflation

Russia expects inflation to rise in 2021 to 7.4% from the previous forecast of 5.8%, the economy minister said. This puts more pressure on the central bank for the sixth time this year to raise interest rates. Food price increases are the main drivers of this announced recovery.

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