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Global growth will slow down in 2023, bounce back next year: IMF chief

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Global growth will slow down in 2023, bounce back next year: IMF chief
GLOBALTIMESPAKISTAN

The International Monetary Fund’s Managing Director Kristalina Georgieva told CNBC Tuesday that the days of her institution giving regular global growth downgrades are nearly over.

“I don’t see a downgrade now, but growth in 2023 will slow down,” Georgieva said at the World Economic Forum in Davos, Switzerland.

“Our projection is that we will go by half a percentage point down vis-a-vis 2022. The good news though is that we expect growth to bottom out this year and 2024 to be a year in which we finally see the world economy on an upside,” Georgieva said.

The International Monetary Fund has downgraded its growth forecast three times since October 2021.

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On the issue of central banks potentially cutting interest rates, Georgieva said we are “not quite there yet,” as inflation is slowing down but remains “still quite high.”

“Central banks have to be careful not to pull their foot from the brake too early,” she added. Last week, the U.S. saw its inflation rate hit its lowest level since October 2021, while euro zone inflation dropped for a second consecutive month in December.

A ‘better place’ for China in 2023?
Turning to China, Georgieva repeated the IMF’s projections that the country will see GDP increase, but that it won’t make up as large a portion of global growth as it has in the past.

“The China growth rates are not going to return to the days when China delivered about 40% of global growth, this is not going to happen,” Georgieva said, with the country having experienced below-average growth for the first time in 40 years in 2022.

If China stays the course with its current Covid-19 reopening agenda, the country will reach the IMF’s growth projections of 4.4% by the end of the year, Georgieva said.

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“Not 7%, not 6%, but in a better place above average growth,” she added.

The managing director’s comments come the day after the IMF released a new report saying fragmentation could cost the global economy up to 7% of GDP.

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China wins WTO dispute with Australia over steel products

China wins WTO dispute with Australia over steel products

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China wins WTO dispute with Australia over steel products

China has won a nearly three-year-long dispute with Australia at the World Trade Organization over tariffs on steel products that began during a low point of bilateral relations between the countries, and Australia’s trade minister said Wednesday his government accepted the ruling.

Beijing took its complaint to the WTO in June 2021 over Australia’s extra duties on railway wheels, wind towers and stainless steel sinks imported from China. Trade in these products was worth 62 million Australian dollars ($40.4 million) in 2022.

On Tuesday, the WTO panel adjudicating the case in Geneva, Switzerland, found that Australia’s investigating authority, the Anti-Dumping Commission, had acted inconsistently with some articles of the anti-dumping agreement.

Australia’s Trade Minister Don Farrell said in a statement Wednesday that Canberra accepted the WTO’s ruling and supported a rules-based trading system.

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“Australia will engage with China and take steps to implement the panel’s findings,” Farrell said.

“Australia remains committed to a fully functioning WTO dispute settlement system so that the rights and obligations of all WTO members can be enforced,” he added.

They fled kibbutzim after Hamas attacked. Now, many Israelis must decide whether to go back.
Trade tariffs have been a hot topic between Beijing and Canberra in recent years after China imposed a raft of sanctions on Australian goods in 2020 during the most recent nadir in the bilateral relationship. It is estimated that the tariffs cost the Australian economy 20 billion Australian dollars ($13 billion).

Most of the tariffs have since been lifted as the relationship thawed, but tariffs on wine, rock lobster and some abattoirs still remain.

In April, Australia suspended a complaint to the WTO in a bid to reopen the Chinese market to Australian barley, which had been one of the products targeted by the tariffs and was widely seen as the new Australian government’s attempts to repair relations with Beijing.

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The Australian government has also halted another WTO dispute against China over sanctions on Australian wine worth about 1.1 billion Australian dollars ($720 million) in exchange for a review by China to be completed by the end of March. 

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GameStop shares fall as video game retailer faces competition, weak spending

GameStop shares fall as video game retailer faces competition, weak spending

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GameStop shares fall as video game retailer faces competition, weak spending

GameStop’s (GME.N), opens new tab shares fell more than 14% on Wednesday, as the brick-and-mortar video game retailer reported a decline in fourth-quarter revenue on the back of a spending slowdown and rising competition from e-commerce firms.

The Grapevine, Texas-based company also said late on Tuesday that it had cut an unspecified number of jobs, joining Japan’s Sony (6758.T), opens new tab and Electronic Arts (EA.O), opens new tab in a bid to reduce costs as economic uncertainty hits discretionary spending.

GameStop is set to lose more than $700 million in its market capitalization if the losses hold.

As of Tuesday, GameStop’s stock had fallen nearly 12% this year, as the retail and ecommerce environment remains intensely competitive for the company, which was once a mainstay of American malls.

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The company has a total of 4,169 stores as of Feb. 3, compared with 4,413 in January last year.

GameStop was hailed as the pioneer of Wall Street’s so-called meme stocks. The stock’s price rose as much as 100 times over several months in 2021, largely on the sentiment of individual buyers connected through the Reddit (RDDT.N), opens new tab community forum WallStreetBets.

“No sooner has the meme stock craze been resurrected by Donald Trump’s media company enjoying a big share price boost, it’s somewhat ironic that the grandfather of meme has fallen flat on its face,” AJ Bell investment director Russ Mould said.

Shares of Trump Media & Technology Group (DJT.O), opens new tab rose more than 12% on Wednesday, a day after its stellar Nasdaq debut.

GameStop’s first adjusted per share profit in four quarters also failed to lift investors’ spirits. The company’s earnings were 22 cents per share on an adjusted basis for the fourth quarter ended Feb. 3, after breaking-even in the third quarter.

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Exclusive: First Quantum execs discuss investment, disputed copper with Chinese officials

Exclusive: First Quantum execs discuss investment, disputed copper with Chinese officials

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Carnival Corp (CCL.N), opens new tab, (CCL.L), opens new tab raised its annual profit forecast on Wednesday, betting on a record year of bookings for its cruises as the industry has its “revenge travel” moment.

Cruise companies are experiencing all-time high booking rates as travelers switch to cheaper sea-borne experiences over expensive land-based alternatives such as booking hotels or flights, allowing operators to hike prices.

However, U.S.-listed shares of the company, which owns the Cunard and Holland America Line cruise lines, reversed course from premarket and were last down about 3%. They have risen about 94% in the last 12 months.

“This has been a fantastic start to the year,” CEO Josh Weinstein said in a statement.

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“We delivered another strong quarter that outperformed guidance on every measure, while concluding a monumental wave season that achieved all-time high booking volumes at considerably higher prices.”

The company’s first-quarter revenue rose to $5.41 billion, roughly in line with analysts’ expectations.

Bookings for the rest of 2024 remain the best year on record with total customer deposits reaching a first-quarter all-time high of $7 billion, the company said.

Carnival has estimated an impact of up to $10 million on both adjusted EBITDA and adjusted net income for the full year following the Baltimore’s Francis Scott Key Bridge collapse on Tuesday.

The company said in January that strong demand trends during the year were expected to offset the impact it was seeing due to the re-routing of ships in the Red Sea region.

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The cruise operator now expects adjusted profit per share of 98 cents in 2024, compared with its prior forecast of 93 cents. Analysts on average were expecting a profit of $1 per share, according to LSEG data.

Adjusted cruise costs, excluding fuel in constant currency, were up 7.3% in the first quarter, compared with the same period a year earlier. 

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