The Institute of International Finance has slashed its forecast for the global economy this year as result of the war in Ukraine, uncertainty about China's growth, due to renewed lockdowns to fight the Covid-19 Omicron variant and rapidly rising interest rates.
"The confluence of these shocks threatens the global economy and raises the risk of a recession," the institute said in its latest global outlook report.
The global economy is now projected to grow 2.3 per cent in 2022, compared to an earlier 4.6 per cent estimate.
In April, the International Monetary Fund lowered its growth forecast for the global economy this year to 3.6 per cent, due to Russia's war in Ukraine and rising inflation that was stoked by soaring commodities prices.
"Our growth downgrades are most notable for the euro area, emerging Europe and China," the IIF said. "The rest of the world is impacted somewhat less adversely, given favourable terms of trade effects — especially in commodity-exporting Latin America — and less critical trade links to Russia and Ukraine.
"Risks to our forecast are tilted to the downside because markets are taking an increasingly dim view of central bank policy normalisation."
The US, the world's largest economy, is set to grow 2.5 per cent this year, down from 5.7 per cent in 2021 as the country's central bank continues to tighten monetary policy and interest rates rise.
Growth in China, the world's second-largest economy, was downgraded to 3.5 per cent this year from 5.1 per cent. This is largely a reflection of problems with the country's property sector and the effects of renewed lockdowns that are likely to lead to the economy contracting in the second quarter, the IIF said.
"The Omicron wave in China is more disruptive than we anticipated and will take a substantial toll on growth and capital flows," the IIF said.
China’s Covid Zero policy has caused its industrial output and consumer spending to slide to the worst levels since the health crisis began. Industrial output fell 2.9 per cent in April from a year ago, while retail sales contracted 11.1 per cent in the period and unemployment climbed to 6.1 per cent.
As a result of Russia's war in Ukraine, now in its fourth month, the IIF cut its growth forecast in the Euro zone this year to 1 per cent from an earlier 3 per cent estimate.
"This is a recession call," the IIF said.
"The risk of energy wars between Russia and Europe will also keep natural gas prices elevated.
"We worry about global food security with world food prices at a multi-decade high. Russia has already banned exports of grains and sugar, and Ukraine, one of the largest exporters of important staple foods, could see the sowing season and harvest impacted by the war."
In the Mena region, the institute said it sees "a return to strong growth and large current account surpluses," with "a certain degree of resilience" of oil exporting countries despite the challenging global growth environment.
The Mena's current account surplus is projected to surge to $400bn this year from $120bn in 2021, with the GCC accounting for 90 per cent of the total on the back of higher oil prices that have rallied more than 70 per cent since last year.
Growth in Saudi Arabia, the world's largest energy exporter, is forecast at 7.3 per cent this year.
Capital flows to emerging markets are likely to weaken markedly due to the elevated global recession risks, the IIF said.
The institute forecasts non-resident flows to emerging market countries, excluding China, to fall to $645bn in 2022 from about $1 trillion last year, while it expects a continuation of recent outflows in China.
"Overall, we expect global GDP to essentially flatline this year ... much of the negative drag obviously comes from Russia and Ukraine, where activity is collapsing," it said. "However, aside from these two countries, weakness is broad-based and leaves little margin for error."
Killing of Qassem Suleimani
Glossary of a stock market revolution
Reddit
A discussion website
Redditor
The users of Reddit
Robinhood
A smartphone app for buying and selling shares
Short seller
Selling a stock today in the belief its price will fall in the future
Short squeeze
Traders forced to buy a stock they are shorting
Naked short
An illegal practice
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
Killing of Qassem Suleimani
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
The five pillars of Islam
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
The%20specs
%3Cp%3E%3Cstrong%3EPowertrain%3A%20%3C%2Fstrong%3ESingle%20electric%20motor%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E201hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E310Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3EBattery%3A%20%3C%2Fstrong%3E53kWh%20lithium-ion%20battery%20pack%20(GS%20base%20model)%3B%2070kWh%20battery%20pack%20(GF)%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E350km%20(GS)%3B%20480km%20(GF)%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C900%20(GS)%3B%20Dh149%2C000%20(GF)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Dubai Women's Tour teams
Agolico BMC
Andy Schleck Cycles-Immo Losch
Aromitalia Basso Bikes Vaiano
Cogeas Mettler Look
Doltcini-Van Eyck Sport
Hitec Products – Birk Sport
Kazakhstan National Team
Kuwait Cycling Team
Macogep Tornatech Girondins de Bordeaux
Minsk Cycling Club
Pannonia Regional Team (Fehérvár)
Team Auvergne-Rhône-Alpes
Team Ciclotel
UAE Women’s Team
Under 23 Kazakhstan Team
Wheel Divas Cycling Team
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Sunday's Super Four matches
Dubai, 3.30pm
India v Pakistan
Abu Dhabi, 3.30pm
Bangladesh v Afghanistan
Match info:
Burnley 0
Manchester United 2
Lukaku (22', 44')
Red card: Marcus Rashford (Man United)
Man of the match: Romelu Lukaku (Manchester United)
The biog
Name: Fareed Lafta
Age: 40
From: Baghdad, Iraq
Mission: Promote world peace
Favourite poet: Al Mutanabbi
Role models: His parents
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
More on Quran memorisation:
Mohammed bin Zayed Majlis
Mrs%20Chatterjee%20Vs%20Norway
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs: 2017 Dodge Viper SRT
Price, base / as tested Dh460,000
Engine 8.4L V10
Transmission Six-speed manual
Power 645hp @ 6,200rpm
Torque 813Nm @ 5,000rpm
Fuel economy, combined 16.8L / 100km
UAE currency: the story behind the money in your pockets
T20 World Cup Qualifier
October 18 – November 2
Opening fixtures
Friday, October 18
ICC Academy: 10am, Scotland v Singapore, 2.10pm, Netherlands v Kenya
Zayed Cricket Stadium: 2.10pm, Hong Kong v Ireland, 7.30pm, Oman v UAE
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Ashfaq Ahmed, Rameez Shahzad, Darius D’Silva, Mohammed Usman, Mohammed Boota, Zawar Farid, Ghulam Shabber, Junaid Siddique, Sultan Ahmed, Imran Haider, Waheed Ahmed, Chirag Suri, Zahoor Khan
Players out: Mohammed Naveed, Shaiman Anwar, Qadeer Ahmed
Players in: Junaid Siddique, Darius D’Silva, Waheed Ahmed
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
