(Bloomberg) — Global central banks are pausing or nearing the end of their interest-rate hiking cycles as inflation shows signs of slowing and recession concerns mount.
Policymakers in Canada and Kazakhstan signaled they may soon hold steady, while central bankers in Brazil and Poland left their key rates unchanged for a third-straight meeting. Next week, the Federal Reserve is expected to step down its pace of rate increases but will likely determine it’s too soon to discuss a pause.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
World
A US-China trade war, a global pandemic, Brexit and Russia’s war in Ukraine have rattled the once-entrenched ways that the world’s largest economies trade with each other. The shifting contours of the global trading system mark a kind of “reglobalization” where multinational companies are adapting their trade networks to accommodate the new economic and geopolitical challenges.
Australia’s central bank raised its key interest rate to a 10-year high and said it expects to tighten policy further as it seeks to cool the hottest inflation in three decades. Canada and Kazakhstan both raised rates but signaled a pause may be coming, while Brazil and Poland held steady.
A backlog of oil tankers at the Turkish straits continues to build up as negotiations failed to produce a solution to an insurance glitch caused by sanctions on Russian crude. Twenty-six tankers holding more than 23 million barrels of oil from Kazakhstan were unable to pass the Bosphorus and Dardanelles straits as of Wednesday, shipping data compiled by Bloomberg showed.
Asia
China’s exports and imports both contracted at steeper paces in November as external demand continued to weaken and a worsening Covid outbreak disrupted production and cut demand at home. Exports in dollar terms fell almost 9% in November from a year earlier, the biggest slide since February 2020.
Japan’s economy took a smaller hit than first thought during a summer marked by a renewed Covid surge and a plunge in the yen, with a return to growth expected this quarter. Still, consumption was weaker than first thought, raising concerns about the economy’s resilience.
Australia’s economic expansion decelerated in the three months through September as imports jumped, reflecting strong consumption and households’ resilience to the Reserve Bank’s interest-rate increases.
Europe
German factory orders rose in October, a sign of hope for manufacturers in Europe’s largest economy as they struggle with inflation and elevated energy costs due to Russia’s war in Ukraine.
Hungarian inflation accelerated toward one of the European Union’s highest levels as a deepening rift between Prime Minister Viktor Orban and the central bank raised questions about economic policy. Consumer prices rose 22.5% in November from a year ago.
US
Producer prices rose in November by more than forecast, driven by services and underscoring the stickiness of inflationary pressures that supports Fed interest-rate increases into 2023. The producer price index for final demand climbed 0.3% for a third month and was up 7.4% from a year earlier. The monthly gains for October and September were revised higher.
Recurring applications for US unemployment benefits rose to the highest since early February, suggesting that Americans who are losing their job are having more trouble finding a new one as the labor market shows tentative signs of cooling. Continuing claims have now strung together the three largest increases since May 2020.
Emerging Markets
South African consumer confidence recovered to its strongest level in two years in the fourth quarter as households anticipated better employment prospects and an improvement in their finances.
Turkish inflation slowed for the first time in over a year and a half, though measures to revive the economy ahead of elections in 2023 may keep it elevated for some time. Consumer prices rose an annual 84.4% in November, down from 85.5% the previous month.
At least 15 of the 72 emerging markets in a Bloomberg index now have dollar debt trading at distressed levels, after Russia’s invasion of Ukraine fueled global energy and food price inflation. Although there has been a small rally in the bond market in recent weeks, distressed debt in emerging markets remains a serious weak spot in a global economy preparing for recession.
–With assistance from Beril Akman, Baris Balci, Bryce Baschuk, Christopher Condon, Ekow Dontoh, Selcuk Gokoluk, John Liu, Alex Longley, Ana Monteiro, Neil Munshi, Yoshiaki Nohara, Swati Pandey, Reade Pickert, Augusta Saraiva, Zoe Schneeweiss, Zoltan Simon, Sherry Su, Monique Vanek, Alexander Weber, Erica Yokoyama and Lin Zhu.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
