Aurelia Butler

The government had predicted growth of 0.4% for 2023 in its April forecast, but weakness in the industrial sector and the highest interest rates in a decade are spurring fears of recession in the euro zone’s largest economy.The German economy already suffered a recession in the last quarter of 2022 and the first quarter of 2023. A technical recession is defined as two consecutive quarters of contraction.According to the latest forecast, the German economy is expected to rebound in 2024 and 2025, growing by 1.3% and 1.5%, respectively.Inflation is expected to come in at 6.1% this year, slowing to 2.6% next year and 2.0% in 2025, the forecast shows.Earlier this month, the International Monetary Fund cut its forecast for the German economy to a 0.5% contraction this year, compared with a 0.3% decline projected previously. More

MARRAKECH, Morocco (Reuters) – U.S. Treasury Secretary Janet Yellen said the unprecedented attacks on Israel by Palestinian Islamist group Hamas posed additional risks to an already tepid global economic outlook, but the United States still appeared headed for a soft landing.Yellen condemned Saturday’s attacks on Israel and pledged Washington’s strong support for Israel “in any way that’s necessary,”She told a news conference on the sidelines of World Bank and International Monetary Fund annual meetings that funding for Ukraine and “resources” for Israel were an “absolute top priority” for the Biden administration.Crude oil prices jumped and safe-haven currencies like the yen rose following a massive incursion into Israel from Gaza launched by Hamas on Oct. 7 that has triggered ongoing retaliatory strikes by Israel on the Gaza Strip. Yellen said she had nothing to announce yet on whether the United States would impose new sanctions on Iran if evidence emerged that the country was involved in the attack, and said Washington also had sanctions in place on Hamas and Hezbollah.”This is something that we have been constantly looking at, and using information that becomes available to tighten sanctions,” she said. “We will continue to do that.”As Israeli warplanes bombed Gaza neighborhoods ahead of a potential ground offensive and a U.S. aircraft carrier strike group arrived in the eastern Mediterranean Sea, Yellen downplayed the potential for the conflict to batter the global economy. “Thus far, I don’t think we’ve seen anything suggesting it would be very significant,” she said.World Bank President Ajay Banga told a separate news conference that the conflict would complicate the global economy’s path, echoing comments in a Reuters interview on Tuesday.”I believe that wars are completely, extremely challenging for central banks who are trying to find their way through a very difficult situation, to a relatively soft landing,” Banga said. IRAN FUNDSAsked whether Washington could reverse its decision to unfreeze $6 billion in Iranian funds as part of a U.S.-Iran prisoner swap in September, Yellen said those funds had not been touched yet, but Washington was keeping its options open.”These are funds that are sitting in Qatar that were made available purely for humanitarian purposes, funds that have not been touched. I wouldn’t take anything off the table in terms of future possible actions.” U.S. Secretary of State Antony Blinken has said he had “not yet seen evidence that Iran directed or was behind this particular attack, but there’s certainly a long relationship.”SOFT LANDING ‘NOT … ABSOLUTELY SURE THING’She said she continued to expect a soft landing for the U.S. economy, but conceded that exogenous shocks – such as Russia’s invasion of Ukraine in February 2022 and the attacks on Israel – brought additional risks.”Of course the situation in Israel causes additional concerns. I’m not saying soft landing is an absolutely sure thing. But I continue to think it’s the most likely path,” due to the resilience in the labour market and moderating wage pressure, Yellen told a briefing. Yellen said Washington was monitoring the potential economic impact of the escalating conflict, though it was unlikely a major driver of the global outlook. More

The production, if it materializes, would be the first instance of Hyundai’s foray into manufacturing an outside brand on contract, the Korea Economic Daily reported citing automotive industry and local Chinese sources.The plan is for Beijing Hyundai Motor, a joint venture of Hyundai Motor and Beijing Automotive Group (BAIC), to produce the ARCFOX vehicles, and the companies are discussing the details, the report cited the sources as saying.Beijing Hyundai Motor will likely oversee the design, production and quality control and use its plant in Beijing, the report said.When asked to comment on the report, Hyundai Motor said it was “currently reviewing various measures for EV production, but nothing has been decided,” in a statement to Reuters. BAIC was not immediately available for comment outside normal business hours.The report comes amid a push by the world’s No. 3 automaker by sales together with its affiliate Kia to restructure its China business to focus on profitability. Hyundai, which had five plants in China at its peak, sold one in 2021. It plans eventually to run just two, optimising production for export to emerging markets.The decision to produce ARCFOX vehicles is “to put together a bridgehead in the renewed push into the Chinese market by setting up a EV production line,” the report cited a local Chinese source as saying. More

Banga also outlined a funding strategy that places equal emphasis on climate mitigation and climate adaptation. However, this stance has sparked climate action protests due to the bank’s ongoing support for fossil fuels.In addition to environmental concerns, the World Bank is shifting its focus from financing scale to output. Banga urged shareholders to expand the capital base for enhanced capacity. This move is expected to provide an additional $150 billion support over ten years. Alterations in the loan-to-equity ratio are projected to generate an extra $40 billion in lending over the same period.The strategy also includes leveraging hybrid capital and portfolio guarantees six-eight times without a capital increase. Special drawing rights (SDR) are being used to secure a $150 billion lending capacity over ten years, marking a rise of 15-20%. Despite these measures, Banga declared them as insufficient.The World Bank seeks to strengthen private sector ties and de-risk investments as part of its new approach. The Independent Expert Group has endorsed this plan, which broadens the bank’s mandate to include climate change and other public goods while maintaining a focus on poverty reduction.The US is currently seeking Congress approval for more capital, with Germany and the UK initiating similar steps. The International Finance Corporation (IFC), World Bank’s private sector lending arm, plays a central role in this new approach.Banga emphasized the need for reducing the existing 27-month approval process for development projects, stating “development delayed is development denied”. The World Bank plans to collaborate with other multilateral agencies for streamlined funding. Based on client feedback, the revamp includes providing a complete solution to countries and faster decision-making on lending. The need for a larger balance sheet was underscored, despite G20’s non-acceptance of some proposals.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More