The International Monetary Fund's managing director has warned of rising recession risks as the lender downgrades its growth forecast for next year and expects a global output loss of about $4 trillion between now and 2026.
“In less than three years we lived through shock, after shock, after shock,” Kristalina Georgieva said in a speech at Georgetown University in Washington on Thursday, ahead of the IMF-World Bank annual meetings in the US capital this month.
Ms Georgieva cited the Covid-19 pandemic, Russia's war in Ukraine and climate disasters that have exacerbated inflationary pressures and led to food and energy prices soaring, causing a cost-of-living crisis.
“Most economists, including at the IMF, thought the recovery would continue, and inflation would quickly subside — largely because we expected vaccines would help tame supply side disruptions and allow production to rebound,” Ms Georgieva said.
“But this is not what happened. Multiple shocks, among them a senseless war, changed the economic picture completely. Far from being transitory, inflation has become more persistent.”
Inflation reached a four-decade high in the US and UK earlier this year, and hit a record in Europe as well.
In July, the IMF said Russia’s war in Ukraine, rising inflation and a slowdown in China had derailed the momentum of the global economy's recovery from the Covid-19 pandemic, prompting it to lower its growth forecast to 3.2 per cent in 2022 and 2.9 per cent in 2023 after a 6.1 per cent expansion last year.
Ms Georgieva said the coming World Economic Outlook of the fund that will be released next week downgrades growth figures for next year.
This is largely due to “the darkening global outlook” as the economy faces greater uncertainty, higher volatility, tighter financial conditions, geopolitics and natural disasters.
The US and China, the world's two largest economies, and the euro area countries are all slowing down, which will reverberate across emerging and developing countries as they face reduced demand for their exports. Many of these countries may feel severe strains from higher food and energy prices.
“The risks of recession are rising. We estimate that countries accounting for about one-third of the world economy will experience at least two consecutive quarters of contraction this or next year,” Ms Georgieva said.
And, even when growth is positive, it will feel like a recession because of shrinking real incomes and rising prices.”
The IMF expects a global output loss of about $4tn between now and 2026, equivalent to the size of the German economy — Europe's largest.
That is “a massive setback for the world economy. And it is more likely to get worse than to get better,” Ms Georgieva said.
Risks to financial stability are rising, which could be amplified by pre-existing vulnerabilities, which include high debt levels of countries and concerns over liquidity in key areas of financial markets, she said.
Ms Georgieva called on policymakers to take measures that help stabilise the economic environment.
She cautioned that not enough monetary tightening may cause inflation to become de-anchored and entrenched, requiring greater interest rate increases in the future, which would dent growth and affect people's livelihoods.
An “immediate priority” is a fiscal policy that is in synch with monetary policy and protects the vulnerable of society, without adding fuel to inflation.
Increased fiscal spending “would make for a very rough and dangerous ride”, while central banks are raising interest rates, she said.
Another priority is supporting emerging market and developing economies who are coming under pressure owing to the strong US dollar, higher borrowing costs and increased capital outflows.
The IMF estimates the probability of portfolio outflows from emerging markets over the next three quarters has risen to 40 per cent, which could pose a major challenge to countries with large external financing needs
“Maintaining exchange rate flexibility will help. But countries would also benefit from a more proactive approach and from taking precautionary steps before a crisis emerges,” Ms Georgieva said.
The risk of a debt crisis widening in emerging economies is increasing which could affect the global economy and financial stability.
More than a quarter of emerging economies either defaulted or had bonds trading at distressed levels, according to the fund. More than 60 per cent of low-income-countries are in or at high risk of debt distress.
The IMF has provided $258 billion to 93 countries since the start of the pandemic and $90bn to 16 states since the start of the Ukraine war in February.
“To reduce the risk of debt crises, large creditors such as China and the private sector have a responsibility to act,” Ms Georgieva said.
Countries around the world need to boost co-operation to address fragmentation among states, climate change and counter acute food insecurity that is now affecting 345 million people.
“Our world economy is like a ship in choppy waters. We need all the wisdom we can muster — to steady the ship and navigate through what is ahead,” Ms Georgieva said.
The specs
Engine: 4-litre twin-turbo V8
Transmission: eight-speed PDK
Power: 630bhp
Torque: 820Nm
Price: Dh683,200
On sale: now
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
MATCH INFO
Uefa Champions League semi-final, first leg
Tottenham v Ajax, Tuesday, 11pm (UAE).
Second leg
Ajax v Tottenham, Wednesday, May 8, 11pm
Games on BeIN Sports
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Second Test
In Dubai
Pakistan 418-5 (declared)
New Zealand 90 and 131-2 (follow on)
Day 3: New Zealand trail by 197 runs with 8 wickets remaining
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
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
The%20end%20of%20Summer
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Tom Fletcher on 'soft power'
Killing of Qassem Suleimani
COMPANY%20PROFILE
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The specs: Volvo XC40
Price: base / as tested: Dh185,000
Engine: 2.0-litre, turbocharged in-line four-cylinder
Gearbox: Eight-speed automatic
Power: 250hp @ 5,500rpm
Torque: 350Nm @ 1,500rpm
Fuel economy, combined: 10.4L / 100km
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The biog
Favourite book: Animal Farm by George Orwell
Favourite music: Classical
Hobbies: Reading and writing
COMPANY%20PROFILE
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Killing of Qassem Suleimani
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
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.
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
SPEC%20SHEET
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How to vote in the UAE
1) Download your ballot https://www.fvap.gov/
2) Take it to the US Embassy
3) Deadline is October 15
4) The embassy will ensure all ballots reach the US in time for the November 3 poll
