Global ETF News Older than One Year
OECD GDP growth remains stable in the third quarter of 2024
November 21, 2024--"Gross domestic product (GDP) in the OECD rose by 0.5% in the third quarter of 2024, slightly up from 0.4% in the previous quarter, according to provisional estimates."
Gross domestic product (GDP) in the OECD rose by 0.5% in the third quarter of 2024, slightly up from 0.4% in the previous quarter,1 according to provisional estimates (Figure 1).
The overall GDP growth rate for the G7 remained unchanged in Q3 2024, at 0.5%. This reflects a mixed picture among G7 countries. While growth in the United States remained stable in Q3 at 0.7%, it slowed in Canada and Japan (from 0.5% in Q2 to 0.2% in Q3 in both countries), the United Kingdom (from 0.5% to 0.1%) and Italy (from 0.2% to 0.0%).
The slowdown in Japan mainly reflected contractions in investment (-0.3% in Q3, compared with 1.6% in Q2) and exports of services (-4.2%, compared with 9.4%), the latter mostly due to lower tourism. In Italy, the reduction in growth was related to a negative contribution from net trade (exports minus imports) and mainly reflected a decrease of value added in agriculture, forestry and fishing, and in industry2 (see Italian statistical office). In the United Kingdom, the Q3 slowdown reflected destocking, which was the main drag on growth.
Source: OECD
G20 Economies Should Target Reforms to Boost Medium-Term Growth Prospects
November 21, 2024--Improving fiscal policy frameworks, fostering education and skills, and supporting the green transition can help ensure strong, sustainable, balanced, and inclusive growth
For most Group of Twenty economies, growth is poised to weaken over the next five years and remain well below what was typical in the two decades before the pandemic.
That's one of the biggest shared challenges for the group, which accounts for about 85 percent of global gross domestic product.
Growth is more robust across the African Union, which joined the G20 last year, but booming populations mean those economies also must create jobs for millions of young people entering the labor market.
For both groups, as well as the European Union, lifting growth is essential to improving outcomes for people, and there's a common solution: implementing priority reforms can significantly boost prospects for growth over the next five years, or medium term, as our new report to the G20 outlines. Our analysis also indicates that payoffs from structural reforms are greatest when they are carefully sequenced and reflect social consensus.
Source: imf.org
Report shows surge in G20 trade-restrictive measures amid increased unilateral policies
November 13, 2024--Trade restrictive measures introduced by G20 economies significantly increased in coverage over the past year, according to the 31st WTO Trade Monitoring Report on G20 trade measures issued on 13 November. Although G20 economies also continued to introduce wide-ranging trade facilitating measures, the report points to increasing evidence of inward-looking and unilateral trade policy decisions.
Warning that these measures are creating uncertainty for the world economy, WTO Director-General Ngozi Okonjo-Iweala called on G20 governments to refrain from adopting new restrictions that could worsen the global economic outlook.
Source: World Trade Organization (WTO)
IMF-Fiscal Monitor October 2024: Putting a Lid on Public Debt
October 23, 2024--Global public debt is elevated. It is projected to exceed US$100 trillion in 2024 and will rise over the medium term. This chapter shows that risks to the debt outlook are heavily tilted to the upside. In a severely adverse scenario, global debt is estimated to be nearly 20 percentage points of GDP higher three years ahead than the baseline projection, reaching 115 percent of GDP.
Much larger fiscal adjustments than currently planned are required to stabilize (or reduce) debt with high probability. Now is an opportune time for rebuilding fiscal buffers and delaying is costly. Rebuilding fiscal buffers in a growth-friendly manner and strengthening fiscal governance is essential to ensure sustainable public finances and financial stability.
Source: imf.org
Global Financial Fragilities Mount Despite Rate Cuts and Buoyant Markets
October 22, 2024-- Increased investor risk-taking could fuel vulnerabilities
When it comes to financial stability, the world is facing a split screen of short-term and medium-term factors. The good news is that near-term financial stability risks remain contained.
Why? Because the likelihood of a soft landing for the global economy has significantly increased.
As inflation continues to decline, major central banks have started cutting interest rates. This is boosting already buoyant asset prices and keeping financial market volatility subdued.
At the same time, our latest Global Financial Stability Report calls on policymakers to remain vigilant about the medium-term prospects. We want to highlight two areas of concern.
Source: imf.org
IMF-As Inflation Recedes, Global Economy Needs Policy Triple Pivot
October 22, 2024--Let’s start with the good news: it looks like the global battle against inflation has largely been won, even if price pressures persist in some countries. After peaking at 9.4 percent year-on-year in the third quarter of 2022, we now project headline inflation will fall to 3.5 percent by the end of next year, slightly below the average during the two decades before the pandemic.
In most countries, inflation is now hovering close to central bank targets, paving the way for monetary easing across major central banks.
The global economy remained unusually resilient throughout the disinflationary process. Growth is projected to hold steady at 3.2 percent in 2024 and 2025, but some low-income and developing economies have seen sizable downside growth revisions, often tied to intensifying conflicts.
Source: imf.org
China stimulus unleashes ETF buying spree in US and Europe
October 10, 2024-A scramble for Chinese equities united the global investment industry last month, just as attitudes towards European and Japanese stock markets became heavily bifurcated along geographical lines.
Despite strong domestic enthusiasm, foreign exchange traded fund investors turned their backs on European and Japanese stock markets in September.
Yet global investors were unified in their enthusiasm for Chinese stocks after the People's Bank of China unveiled a series of stimulus measures that included monetary easing, steps to support the country's crisis-hit property market and a Rmb800bn fund to boost the stock market, by lending to asset managers, insurers and brokers to buy equities and to listed companies to buy back their stock.
Source: msn.com
Global goods trade on track for gradual recovery despite lingering downside risks
October 10, 2024--Global goods trade is projected to post a 2.7% increase in 2024, up slightly from the previous estimate of 2.6%, WTO economists said in an updated forecast on 10 October.
The volume of world merchandise trade is likely to increase by 3.0% in 2025; however, rising geopolitical tensions and increased economic policy uncertainty continue to pose substantial downside risks to the forecast.
Services trade has a more favourable outlook compared to goods according to leading indicators.
In the October 2024 update of "Global Trade Outlook and Statistics," WTO economists note that global merchandise trade turned upwards in the first half of 2024 with a 2.3% year-on-year increase, which should be followed by further moderate expansion in the rest of the year and in 2025. The rebound comes on the heels of a -1.1% slump in 2023 driven by high inflation and rising interest rates. World real GDP growth at market exchange rates is expected to remain steady at 2.7% in 2024 and 2025.
Source: World Trade Organization (WTO)
OECD headline inflation drops to 4.7% in August 2024 as energy inflation declines
October 3, 2024--"Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) fell to 4.7% in August 2024 from 5.4% in July.".
Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) fell to 4.7% in August 2024 from 5.4% in July. The fall was driven to a large extent by a decline of about 10 percentage points in Turkey inflation, which nevertheless still remained above 50%.
Declines were also observed in 24 of 38 of OECD countries. Excluding Turkey, inflation in the OECD area is estimated to have decreased more moderately, to 2.7% in August from 3.0% in July.
Inflation rose in nine OECD countries and was stable or broadly stable in five. Headline inflation stood at or below 2% in 16 countries in August, while only 9 countries had reached that mark in July.
Year-on-year OECD energy inflation fell significantly to minus 0.1% in August from 3.3% in July, with declines in 31 OECD countries. Year-on-year food inflation and core inflation (inflation less food and energy) declined in the OECD area, mainly due to sharp falls in Türkiye. Core inflation only fell in 9 countries while it rose in 10 and was stable or broadly stable in 19.
In the G7, year-on-year headline inflation eased to 2.4% in August from 2.7% in July, driven by energy prices. Headline inflation fell in all G7 countries except in Japan where it increased, and in the United Kingdom where headline inflation remained stable. Year-on-year headline inflation reached low levels last seen in 2021 in Canada and the United States (lowest level since February 2021), in Germany (since March 2021), and in France (since July 2021). Energy prices fell markedly, while G7 food and core inflation rates were stable.
Source: oecd.org
BIS-Monetary policy in an era of supply headwinds-do the old principles still stand?
October 2, 2024--Adverse supply shocks have played a significant role in the post-pandemic inflation surge, when inflation rates in advanced economies reached levels not seen since the 1970s. The future is likely to bring more volatile inflation due to less elastic supply capacities and more frequent adverse supply shocks, necessitating a re-evaluation of monetary policy principles and frameworks
The traditional approach of "looking through" supply-driven inflation has been based on the transitory nature of such shocks and anchored inflation expectations. However, the recent inflation surge has revealed that risks of inflation de-anchoring can emerge suddenly, and forceful monetary tightening may be required to re-anchor expectations and stabilise inflation. Going forward, more frequent adverse supply shocks mean that central banks must exercise care when assessing if they can look through their inflationary effects.
Source: BiS
