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IMF expects weakest global economic growth since 1990

The International Monetary Fund (IMF) warned in its spring report that the global economy is entering a risky phase in which economic growth remains low by historical standards and financial risks have increased without inflation having yet taken a decisive turn. Today, investors are eagerly awaiting the latest data on US consumer prices, which have a weighty influence on the direction of the Federal Reserve’s monetary policy. 

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
International Monetary Fund
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In New York, the stock indices trended inconsistently on Tuesday. The Dow Jones Industrial exited the trading session 0.29% higher at 33’684.79 points, while the S&P 500 closed virtually unchanged at 4’108.94 points. On the Nasdaq, the technology-heavy indices lost about 0.6%. US government bonds turned slightly negative, and the yield of the ten-year Treasury rose in turn to 3.43%. The latest assessments of the International Monetary Fund attracted attention. According to the IMF's medium-term forecast, global growth is expected to be around 3% over the next five years. This corresponds to the lowest forecast value in over 30 years. In the current year, the IMF assumes average global GDP growth of 2.8% (2022: 3.4%). According to the IMF, the spring forecast presented yesterday assumes that the recent tensions in the financial sector will not escalate. 

In Asia, stock indices traded without a clear trend on Wednesday. In Tokyo, the Nikkei 225 rose 0.6%. Hong Kong's Hang Seng Index, meanwhile, slipped 0.8%, while in mainland China the Shanghai Composite gained 0.5% and the Shenzhen Component slipped 0.1%.  

Europe's stock markets started the new week with gains after the long Easter weekend, but these melted away during the day. The EuroStoxx 50 closed almost 0.5% higher and the DAX in Frankfurt was around 0.4% higher than before Easter. As the latest survey data from German financial market analysis company Sentix showed, the assessment of the roughly 1’300 analysts and investors surveyed regarding the outlook for the eurozone improved in April. The economic indicator rose by 2.4 points month-on-month to -8.7 points, thus clearly outperforming expectations (consensus -10.1). The assessment of the current economic situation even reached its best level in more than a year. By contrast, the economic expectations of the financial market professionals surveyed remained unchanged in April. 

Corporate news in focus: Swiss Re and Ahold Delhaize hold their AGM and LVMH delivers Q1 sales figures.

Economic data in focus: US consumer prices for March (2:30 p.m. CET), Canada's central bank announces interest rate decision (4:00 p.m.) and the US Federal Reserve releases its March 22 meeting minutes (8:00 p.m.).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi,
Source: LGT Bank (Switzerland) Ltd.