- This weekly round-up brings you the latest news from the world of economics and finance.
- Top economy stories: Lastest on the US economy; Bank of Japan keeps interest rates steady; Warning over incomes in Sub-Saharan Africa.
1. US economy sees slowest quarter in two years
The latest figures from the Commerce Department’s Bureau of Economic Analysis reveal that economic growth in the United States slowed to a 1.6% annualized rate last quarter, marking its most sluggish pace in two years.
Although GDP growth fell short of economists’ expectations, domestic demand remained robust, as highlighted by Reuters. The economy had expanded by 3.4% in the fourth quarter, maintaining a pace surpassing the 1.8% rate considered by US central bank officials as the non-inflationary growth threshold.
2. Bank of Japan keeps rates low
The Bank of Japan (BoJ) has retained its interest rates near zero and signaled that inflation is poised to reach its 2% target in the foreseeable future, hinting at potential rate hikes.
However, the yen experienced a decline attributed to uncertainty surrounding future rate increases, as reported by Reuters, leading to its drop to a 34-year low against the US dollar.
Maintaining its short-term investment rate target at 0-0.1%, a level established a month ago, the BoJ emphasized in its quarterly outlook report that underlying inflation is expected to align with the price target around late 2025 through 2026.
3. News in brief: Stories on the economy from around the world
Leaders of 10 multilateral development banks have pledged action across five critical areas, including committing to additional lending capacity of up to $400 billion over the next decade.
In March, Singapore’s primary measure of consumer prices increased by 3.1% year-on-year, falling short of economists’ expectations.
Meanwhile, inflation in Sri Lanka dipped to 2.5% in March, down from 5.1% in February.
According to Bloomberg, business sentiment in Germany has surged to a one-year peak, as per the latest data from the Ifo institute. However, a study by the German Economic Institute anticipates a rise in the number of unemployed individuals in the country to its highest level in nearly ten years.
The South Korean economy experienced its most rapid expansion in almost two years in the first quarter of 2024. Bank of Korea data indicates that GDP rose by 1.3% on a seasonally adjusted basis from January to March compared to the previous quarter.
The IMF has cautioned that incomes in Sub-Saharan Africa are lagging behind global averages amidst a “tepid” economic recovery.
Additionally, Russia’s economy ministry has upgraded its 2024 GDP growth forecast from 2.3% to 2.8%. The IMF has also revised its projection for the country, elevating it to 3.2% from 2.6% forecasted in January.
4. More on finance and the economy from Agenda
Last week, the World Bank and IMF convened their annual spring meetings in Washington, offering a comprehensive overview of key insights.
Pedro Conceição, Director of the Human Development Report Office at the United Nations Development Programme, delved into the disparity between economic realities and perceptions, proposing strategies to narrow this gap.
Meanwhile, Bruce Jones, a senior fellow at the Brookings Institution, and Susana Malcorra, a former Argentinian foreign minister, scrutinized the pivotal role of “middle powers” in global geopolitics amid escalating distrust among major global players.
