The global economy is "teetering on the brink of recession" as the war in Ukraine, Covid-19 lockdowns in China and a hawkish US Federal Reserve weigh on activity worldwide, the Institute of International Finance said in a report.
In its latest forecast, the IIF estimates global gross domestic product to grow 2.2 per cent this year, with activities slowing to 0.5 per cent in the fourth quarter. The Euro area as well as emerging markets, excluding China, are anticipated to go into a recession by the end of the year.
"Since the statistical carryover from 2021 is 2.3 per cent, this is a de facto flatlining of global GDP," the report said.
The IIF's estimates are below the latest prediction from the International Monetary Fund, which has also lowered its growth forecast this year, due to the Ukraine war and inflation stoked by soaring commodity prices.
The IMF projects global growth at 3.6 per cent this year and next, down 0.8 and 0.2 percentage points from its January forecast, respectively.
With the possibility of a recession, market regulators must approach policy normalisation more cautiously, the IIF said.
"In the past, rising uncertainty and mounting recession risk have had important effects on investor psychology, making markets less tolerant of monetary policy tightening that is seen as no longer warranted," the institute said.
It cited the Fed's last rate hiking cycle in December 2018, which it was forced to end abruptly after the S&P 500 index fell sharply. Markets judged that hike to be "unwarranted", given the escalating trade war between the US and China at the time, the report said.
"The risk of a similar market tantrum is rising again now as markets fret about a global recession. The Fed has locked in a steady pace of balance sheet run-off to start in June, amid a very sharp tightening in US financial conditions that looks on the verge of becoming disorderly," it said.
The Fed’s hawkish stance towards rate increases comes amid the volatility in energy and commodity markets caused by Russia’s invasion of Ukraine.
In March, the Fed approved a quarter percentage point rise, following two years of keeping the rates near zero, as the world's largest economy attempted to curb soaring inflation, which hit the highest level since 1981.
Earlier this month, the Fed further raised its short-term interest rate by 50 basis points, its most aggressive decision since 2000, with a further seven to nine interest rate rises expected in 2022 and 2023.
Meanwhile, the European Central Bank is also expected to announce its first rate hike since 2011 in July.
"The first interest rate hike is now being priced in for the monetary policy meeting of July 21, and that seems realistic to me," Klaas Knot, president of Dutch De Nederlandsche Bank, told Dutch TV earlier this week.
While the rate should be raised by 25bps, if inflation is seen "broadening further or accumulating", a bigger increase must "not be excluded", Mr Knot said.
"In that case a logical next step would amount [to] half a percentage point."
Several other governments around the world have also adopted rate hikes in recent months to tackle inflation. Many emerging and mature market economies have entered the Fed’s latest rate hike cycle with high levels of dollar-denominated debt, the IIF said in an earlier report.
Global debt surged to a record $305 trillion in the first three months of this year as the US and China — the world’s two largest economies — continued to borrow amid slowing economic growth. Debt currently stands at more than 348 per cent of the global GDP.
"The Fed and the ECB ... need to proceed with great caution in their desire to normalise policy. Better to pause than to backtrack, given that high inflation raises the cost to central banks’ credibility of a policy reversal," IIF's latest report said.
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
MANDOOB
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What is a Ponzi scheme?
A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
SPEC%20SHEET
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UAE currency: the story behind the money in your pockets
More from Rashmee Roshan Lall
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Total eligible population
About 57.5 million people
51.1 million received a jab
6.4 million have not
Where are the unvaccinated?
England 11%
Scotland 9%
Wales 10%
Northern Ireland 14%
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
Most wanted allegations
- Benjamin Macann, 32: involvement in cocaine smuggling gang.
- Jack Mayle, 30: sold drugs from a phone line called the Flavour Quest.
- Callum Halpin, 27: over the 2018 murder of a rival drug dealer.
- Asim Naveed, 29: accused of being the leader of a gang that imported cocaine.
- Calvin Parris, 32: accused of buying cocaine from Naveed and selling it on.
- John James Jones, 31: allegedly stabbed two people causing serious injuries.
- Callum Michael Allan, 23: alleged drug dealing and assaulting an emergency worker.
- Dean Garforth, 29: part of a crime gang that sold drugs and guns.
- Joshua Dillon Hendry, 30: accused of trafficking heroin and crack cocain.
- Mark Francis Roberts, 28: grievous bodily harm after a bungled attempt to steal a £60,000 watch.
- James ‘Jamie’ Stevenson, 56: for arson and over the seizure of a tonne of cocaine.
- Nana Oppong, 41: shot a man eight times in a suspected gangland reprisal attack.
'Texas Chainsaw Massacre'
Rating: 1 out of 4
Running time: 81 minutes
Director: David Blue Garcia
Starring: Sarah Yarkin, Elsie Fisher, Mark Burnham
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
The specs: 2018 Ford F-150
Price, base / as tested: Dh173,250 / Dh178,500
Engine: 5.0-litre V8
Power: 395hp @ 5,000rpm
Torque: 555Nm @ 2,750rpm
Transmission: 10-speed automatic
Fuel consumption, combined: 12.4L / 100km
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Read more from Mina Al-Oraibi
