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News Article :-
Overshadowed by fresh Middle East violence and hosted by a country still recovering from an earthquake, the week-long annual meetings of the International Monetary Fund and World Bank wrapped up on Saturday.
Discussions in the Moroccan city of Marrakech ranged from the prospects for a world economy weighed down by debt, inflation and conflict to the growing wealth gap between rich and poor countries and floundering efforts to tackle climate change.
The new IMF outlook - signed off before the escalation of the conflict between Israel and Hamas - sees global economic growth slowing from 3.5% last year to 3% this year and 2.9% next year, a 0.1% point downgrade from a previous 2024 estimate.
Global inflation is seen dropping from 6.9% this year to a still-high 5.8% next. Central bankers signalled readiness to end interest rate hikes if events allow, hopeful that inflation can be finally tamed without too hard a landing.
Most agreed it was too early to say how Middle East strife would affect a global economy which IMF chief economist Pierre-Olivier Gourinchas described as "limping along, not sprinting".
The heavy debt burdens of advanced economies - from the United States to China and Italy - was a recurrent theme in the meetings, which came after financial markets in recent weeks pushed U.S. bond yields higher. Italian central bank governor Ignazio Visco said there was an impression markets were "reevaluating the term premium" as investors become more nervous about holding longer term debt.
JPMorgan chair of global research Joyce Chang put it another way. "The bond vigilantes are back, and the Great Moderation is over," she told a panel of the two-decade era of relative economic calm before the 2008/09 financial crisis.
One policy area where this could have a knock-on effect is the fight against climate change. Vitor Gaspar, head of the IMF's fiscal division, warned current subsidies-based policies were failing to deliver net zero emissions and that scaling them up would explode public debt. "Countries will need a new mix of policies with carbon pricing at the centre," the Fund concluded.
Looking beyond the major developed economies, higher policy rates, a strong dollar and geopolitical uncertainties are adding to challenges for the rest of the world.
Turkey was in the spotlight as Finance Minister Mehmet Simsek pitched its reform plan. "The biggest structural issue is to bring inflation down. And they're working on it," said Murat Ulgen, Global Head of Emerging Markets Research at HSBC.
Kenya is looking to avoid slipping into debt distress and its central bank governor told Reuters it plans a buyback of a quarter of its $2 billion international bond maturing in June - pushing its 2024 bond up 1.2 cents on the dollar.
One debt restructuring deal emerged: Zambia finally agreed a debt rework memorandum of understanding with creditors including China and France.
Progress on Sri Lanka
News Article :-
Overshadowed by fresh Middle East violence and hosted by a country still recovering from an earthquake, the week-long annual meetings of the International Monetary Fund and World Bank wrapped up on Saturday.
Discussions in the Moroccan city of Marrakech ranged from the prospects for a world economy weighed down by debt, inflation and conflict to the growing wealth gap between rich and poor countries and floundering efforts to tackle climate change.
The new IMF outlook - signed off before the escalation of the conflict between Israel and Hamas - sees global economic growth slowing from 3.5% last year to 3% this year and 2.9% next year, a 0.1% point downgrade from a previous 2024 estimate.
Global inflation is seen dropping from 6.9% this year to a still-high 5.8% next. Central bankers signalled readiness to end interest rate hikes if events allow, hopeful that inflation can be finally tamed without too hard a landing.
Most agreed it was too early to say how Middle East strife would affect a global economy which IMF chief economist Pierre-Olivier Gourinchas described as "limping along, not sprinting".
The heavy debt burdens of advanced economies - from the United States to China and Italy - was a recurrent theme in the meetings, which came after financial markets in recent weeks pushed U.S. bond yields higher. Italian central bank governor Ignazio Visco said there was an impression markets were "reevaluating the term premium" as investors become more nervous about holding longer term debt.
JPMorgan chair of global research Joyce Chang put it another way. "The bond vigilantes are back, and the Great Moderation is over," she told a panel of the two-decade era of relative economic calm before the 2008/09 financial crisis.
One policy area where this could have a knock-on effect is the fight against climate change. Vitor Gaspar, head of the IMF's fiscal division, warned current subsidies-based policies were failing to deliver net zero emissions and that scaling them up would explode public debt. "Countries will need a new mix of policies with carbon pricing at the centre," the Fund concluded.
Looking beyond the major developed economies, higher policy rates, a strong dollar and geopolitical uncertainties are adding to challenges for the rest of the world.
Turkey was in the spotlight as Finance Minister Mehmet Simsek pitched its reform plan. "The biggest structural issue is to bring inflation down. And they're working on it," said Murat Ulgen, Global Head of Emerging Markets Research at HSBC.
Kenya is looking to avoid slipping into debt distress and its central bank governor told Reuters it plans a buyback of a quarter of its $2 billion international bond maturing in June - pushing its 2024 bond up 1.2 cents on the dollar.
One debt restructuring deal emerged: Zambia finally agreed a debt rework memorandum of understanding with creditors including China and France.
Progress on Sri Lanka
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NewsTranscript
00:00 Overshadowed by fresh Middle East violence and hosted by a country still recovering from
00:05 an earthquake, the week-long annual meetings of the International Monetary Fund and World
00:10 Bank wrapped up on Saturday.
00:13 Discussions in the Moroccan city of Marrakech ranged from the prospects for a world economy
00:18 weighed down by debt, inflation and conflict to the growing wealth gap between rich and
00:23 poor countries and floundering efforts to tackle climate change.
00:27 The new IMF outlook, signed off before the escalation of the conflict between Israel
00:33 and Hamas, sees global economic growth slowing from 3.5 per cent last year to 3 per cent
00:40 this year and 2.9 per cent next year, a 0.1 per cent point downgrade from a previous 2024
00:47 estimate.
00:49 Global inflation is seen dropping from 6.9 per cent this year to a still high 5.8 per
00:55 cent next. Central bankers signalled readiness to end interest rate hikes if events allow,
01:01 hopeful that inflation can be finally tamed without too hard a landing. Most agreed it
01:06 was too early to say how Middle East strife would affect a global economy which IMF chief
01:11 economist Pierre-Olivier Gouerinka's described as "limping along, not sprinting".
01:17 The heavy debt burdens of advanced economies, from the United States to China and Italy,
01:23 was a recurrent theme in the meetings, which came after financial markets in recent weeks
01:28 pushed US bond yields higher. Italian central bank governor Ignazio Visco said there was
01:34 an impression markets were re-evaluating the term "premium" as investors become more
01:39 nervous about holding longer-term debt. JP Morgan chair of global research Joyce Cheng
01:44 put it another way. "The bond vigilantes are back, and the great moderation is over,"
01:50 she told a panel of the two-decade era of relative economic calm before the 2008-09
01:56 financial crisis. One policy area where this could have a knock-on effect is the fight
02:01 against climate change. Victor Gasper, head of the IMF's fiscal division, warned current
02:07 subsidies-based policies were failing to deliver net-zero emissions and that scaling them up
02:12 would explode public debt. "Countries will need a new mix of policies with carbon pricing
02:18 at the centre," the fund concluded. Looking beyond the major developed economies, higher
02:23 policy rates, a strong dollar and geopolitical uncertainties are adding to challenges for
02:28 the rest of the world. Turkey was in the spotlight as finance minister Mehmet Simsk pitched its
02:34 reform plan. "The biggest structural issue is to bring inflation down and they're working
02:39 on it," said Murat Olcan, global head of emerging markets research at HSBC. Kenya is looking
02:46 to avoid slipping into debt distress and its central bank governor told Reuters it plans
02:51 a buyback of a quarter of its $2 billion international bond maturing in June, pushing its 2024 bond
02:59 up 1.2 cents on the dollar. One debt restructuring deal emerged; Zambia finally agreed a debt
03:06 rework memorandum of understanding with creditors including China and France. Progress on Sri
03:12 Lanka was less clear. Sri Lanka said on Thursday it reached an agreement with the Export-Import
03:18 Bank of China covering about $4.2 billion of debt, while talks with other official creditors
03:24 are stalling. High interest rates will put some borrowers in more precarious positions,
03:30 the IMF warned in its global financial stability report. Around 5 per cent of banks globally
03:36 are vulnerable to stress if those rates remain higher for longer, it estimated, and a further
03:42 30 per cent of banks, including some of the world's largest, would be vulnerable if
03:47 the global economy enters a prolonged period of low growth and high inflation. The Ukraine
03:53 war, growing trade protectionism and tensions between the United States and China are all
03:58 making consensus building tougher; in the end, there was not enough agreement to issue
04:04 the usual final communique at the end of the meetings. There was much talk ahead of Marrakesh
04:09 on revamping the IMF and World Bank to better reflect the emergence of economies like China
04:15 and Brazil. A US proposal to boost IMF lending power but save a review of shareholdings in
04:22 the fund till later won broad support. A pact announced on Saturday spoke of a meaningful
04:27 increase in quotas by end 2023 but gave few other details. Anti-poverty groups were sceptical
04:34 of what had been achieved. "The big theme this week is G7 countries papering over the
04:39 cracks of shattered promises," said Kate Donald, head of Oxfam International's Washington,
04:45 D.C. office. "Despite the wringing of hands about the billions of dollars needed to tackle
04:50 poverty and climate breakdown, there has been no sign of moving forward."