With monetary-policy tightening probably at its peak among advanced economies, the International Monetary Foundation said taming inflation must remain a priority after the global economy avoided a recession last year.
“The global economy continues to display remarkable resilience and growth holding steady and inflation declining, but many challenges sill lie ahead,” IMF economic counsellor Pierre-Olivier Gourinchas said on Tuesday.
After a “surprisingly resilient” 2023, the IMF revised global growth slightly higher this year to 3.2 per cent.
This is still low by historical standards, though, which the IMF attributes to higher borrowing costs, lingering effects of the Covid-19 pandemic and the war in Ukraine, as well as global fragmentation.
The IMF noted the economy remained resilient despite rising interest rates, which central banks aggressively lifted after a surge in inflation in 2022.
And while global headline inflation is forecast to fall to 5.9 per cent this year after 2023's 6.8 per cent average, the IMF said it is too soon to declare victory.
As a soft landing is within sight for the global economy, the multilateral lender said countries should prioritise ensuring a smooth reduction in inflation.
“Inflation trends are encouraging, but we are not there yet,” Mr Gourinchas said, noting recent inflationary data in some advanced economies.
Recent economic data in the US shows the nation's fight in taming inflation could be stalled, which could lead the Federal Reserve, and by extension GCC countries, to hold off on retreating from their restrictive policies until later in the year.
Mr Gournichas said the IMF still projects the Fed to begin dialling back some time this year, but recent bumpy data might delay it.
The European Central Bank and Bank of England are also expected to withdraw from their restrictive policy this year, possibly as soon as June.
The IMF expects the Fed to cut rates down from 5.4 per cent to 4.6 per cent this year, in line with the Fed's March projections.
Meanwhile, it expects the Bank of England to reduce rates from 5.3 per cent to 4.8 per cent and the ECB from 4.0 per cent to 3.3 per cent by the end of this year.
The fund urged central banks to be careful in their near-term decisions, as holding rates for too long or reducing them too soon both carry risks.
“At the same time, as central banks take a less restrictive stance, a renewed focus on implementing medium-term fiscal consolidation to rebuild room for budgetary manoeuvre and priority investments, and to ensure debt sustainability, is in order,” the report said.
Advanced economies' monetary tightening policies may have also contributed to lowering energy prices, the IMF said.
The price of energy also fell faster than expected because of non-Opec oil production and liquefied natural gas output, particularly in the US, which has become the world's largest oil and gas producer.
Resilient economy masks global divide
While the global economy showed a resilient 2023, the IMF said those gains were not felt equally, with low-income countries still experiencing the effects of the Covid-19 pandemic.
The US growth trend has passed pre-pandemic levels.
“We now estimate that there will be more scarring for low-income developing countries, many of which are still struggling to turn the page from the pandemic and cost-of-living crises,” the IMF said.
The IMF expects growth in the EU to rebound, “but from very low levels”, as economic activity is weighed down by previous shocks and the ECB's tight monetary policy.
Services inflation and high wage growth could delay the euro area's inflation fight, but the IMF does not see much evidence of overheating.
“With depressed domestic demand, external surpluses could well rise,” the IMF said.
“The risk is that this will further exacerbate trade tensions in an already fraught geopolitical environment.”
The IMF upwardly revised its projection for US economic growth to 2.7 per cent this year.
The euro area's gross domestic product is projected to grow at 0.8 per cent in 2024 compared to 0.4 per cent last year, while the UK economy is expected to grow by 0.5 per cent.
The Middle East and Central Asia's economy is forecast to grow 2.8 per cent this year, a slight downwards revision from the IMF's January expectation.
Saudi Arabia's GDP is projected to increase 2.6 per cent, also a slight downwards revision.
The IMF called on countries to rebuild their fiscal buffers to help protect their sovereign debt levels and reverse the decline in medium-term growth prospects.
The lender also called for the independence of central banks, whose moves will be scrutinised during a year that will witness a historic number of elections.
Increasing tensions could lead to rise in inflation
Increasing tensions in the Middle East could also inflame inflationary pressures, as the US said it is exploring further sanctioning Iran after its attack against Israel last weekend.
Treasury Secretary Janet Yellen said the US "will not hesitate ... to use our sanctions authority to continue disrupting the Iranian regime's malign and destabilising activity".
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Predictions
Predicted winners for final round of games before play-offs:
- Friday: Delhi v Chennai - Chennai
- Saturday: Rajasthan v Bangalore - Bangalore
- Saturday: Hyderabad v Kolkata - Hyderabad
- Sunday: Delhi v Mumbai - Mumbai
- Sunday - Chennai v Punjab - Chennai
Final top-four (who will make play-offs): Chennai, Hyderabad, Mumbai and Bangalore
Killing of Qassem Suleimani
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.
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
Match info
Australia 580
Pakistan 240 and 335
Result: Australia win by an innings and five runs
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
UAE squad v Australia
Rohan Mustafa (C), Ashfaq Ahmed, Chirag Suri, Rameez Shahzad, Fahad Nawaz, Amjed Gul, Shaiman Anwar, Ahmed Raza, Imran Haider, Muhammad Naveed, Amir Hayat, Ghulam Shabir (WK), Qadeer Ahmed, Tahir Latif, Zahoor Khan
England-South Africa Test series
1st Test England win by 211 runs at Lord's, London
2nd Test South Africa win by 340 runs at Trent Bridge, Nottingham
3rd Test July 27-31 at The Oval, London
4th Test August 4-8 at Old Trafford, Manchester
UAE currency: the story behind the money in your pockets
More coverage from the Future Forum
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
box
COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
The Baghdad Clock
Shahad Al Rawi, Oneworld
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'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
Killing of Qassem Suleimani
HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
More from Neighbourhood Watch
UAE currency: the story behind the money in your pockets
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
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
Number of employees: 90
Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
COMPANY%20PROFILE%20
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The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Auron Mein Kahan Dum Tha
Starring: Ajay Devgn, Tabu, Shantanu Maheshwari, Jimmy Shergill, Saiee Manjrekar
Director: Neeraj Pandey
Rating: 2.5/5
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
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The%20specs
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BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
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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
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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
The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
U19 WORLD CUP, WEST INDIES
UAE group fixtures (all in St Kitts)
- Saturday 15 January: UAE beat Canada by 49 runs
- Thursday 20 January: v England
- Saturday 22 January: v Bangladesh
UAE squad:
Alishan Sharafu (captain), Shival Bawa, Jash Giyanani, Sailles
Jaishankar, Nilansh Keswani, Aayan Khan, Punya Mehra, Ali Naseer, Ronak Panoly,
Dhruv Parashar, Vinayak Raghavan, Soorya Sathish, Aryansh Sharma, Adithya
Shetty, Kai Smith
WORLD RECORD FEES FOR GOALKEEPERS
1) Kepa Arrizabalaga, Athletic Bilbao to Chelsea (£72m)
2) Alisson, Roma to Liverpool (£67m)
3) Ederson, Benfica to Manchester City (£35m)
4) Gianluigi Buffon, Parma to Juventus (£33m)
5) Angelo Peruzzi, Inter Milan to Lazio (£15.7m
