IMF sees steady economic growth and other economics stories to read
The IMF is forecasting steady growth for the global economy. Image: Unsplash/Erol Ahmed
- This weekly round-up brings you the latest news from the world of economics and finance.
- Top economy stories: Latest from the IMF on the global economy; ECB holds rates; Japan inflation increases.
1. IMF sees steady growth for the global economy
The International Monetary Fund (IMF) is projecting steady growth for the global economy over the next two years, with growth projections unchanged in the latest update to its World Economic Outlook. The forecast for this year stays at 3.2%, while it's slightly higher next year at 3.3%.
However, there are shifting sands under the surface of these topline growth figures, writes Pierre-Olivier Gourinchas, Economic Counsellor and the Director of Research of the IMF.
Growth in major economies is becoming more aligned, with the United States showing signs of cooling, while the euro area is set to pick up, he says. Asia's emerging market economies continue to be the main engines of global growth, and prospects for India and China have been revised, accounting for almost half of global growth.
However, prospects for the next five years are weaker due to slowing momentum in key growth drivers across emerging Asia.
The IMF also predicts inflation will slow to 5.9% this year, down from 6.7% last year.
2. European Central Bank keeps rates unchanged
The European Central Bank (ECB) has kept interest rates unchanged at 3.75%. However, prospects from the bank's September meeting were "wide open", ECB President Christine Lagarde said.
She added that growth was likely to have slowed in the second quarter, while investment activity along with poor industrial output suggested sluggish expansion in the immediate future.
However, Lagarde refused to be drawn on the issue of a specific rate path, simply saying "the question of September and what we do in September is wide open".
The ECB had cut rates from record highs last month in response to falling inflation.
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3. News in brief: Stories on the economy from around the world
The head of Singapore's central bank believes its full-year economic growth will be between 2-3%, while core inflation is set to ease more significantly in the final quarter.
Two US Federal Reserve officials have said the US central bank is "closer" to cutting interest rates, Reuters reports. However, the IMF's Pierre-Olivier Gourinchas told Reuters there's no rush for the Fed to cut rates.
US factory output rose 0.4% in June, following a revised 1.0% increase in May. Production increased 1.1% year-on-year in June.
China left its medium-term interest rate unchanged at a meeting on Monday 15 July, in line with market expectations.
UK inflation held at 2% in June, prompting investors to reduce bets on an interest rate cut in two weeks.
Core inflation in Japan increased for a second month in June, rising 2.6% year-on-year, extending a more than two-year run above the 2% target.
Gross domestic product in Malaysia rose 5.8% in the quarter from April-June, according to early estimates released today.
Egypt has kept its interest rates at an all-time high, as its central bank looks to continue to slow inflation.
4. More on finance and the economy from our blog
Regional art festivals in Japan, such as the Echigo-Tsumari Art Triennale, have stimulated local economies in rural areas affected by age-related depopulation. Read more about why in this piece.
A new World Economic Forum white paper explores the key trends reshaping the financial advice industry. Read more about the changes in the sector and the gaps that remain.
Social media is changing how people, especially younger generations, find and consume financial advice – but this isn't without risk. How can we create a more responsible investing ecosystem?