Aurelia Butler

DAVOS, Switzerland (Reuters) -Two-thirds of private and public sector chief economists surveyed by the World Economic Forum (WEF) expect a global recession in 2023, the Davos-organiser said on Monday as business and government leaders gathered for its annual meeting.Some 18% considered a world recession “extremely likely” – more than twice as many as in the previous survey conducted in September 2022. Only one-third of respondents to the survey viewed it as unlikely this year.”The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in a statement accompanying the survey results.The organisation’s survey was based on 22 responses from a group of senior economists drawn from international agencies including the International Monetary Fund, investment banks, multinationals and reinsurance groups.The survey comes after the World Bank last week slashed its 2023 growth forecasts to levels close to recession for many countries as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues, and the world’s major economic engines sputter. Definitions of what constitutes recession differ around the world but generally include the prospect of shrinking economies, possibly with high inflation in a “stagflation” scenario.On inflation, the WEF survey saw large regional variations: the proportion expecting high inflation in 2023 ranged from just 5% for China to 57% for Europe, where the impact of last year’s rise in energy prices has spread to the wider economy.A majority of the economists see further monetary policy tightening in Europe and the United States (59% and 55%, respectively), with policy-makers caught between the risks of tightening too much or too little.’NOT KEEPING PACE’While a global slowdown would risk hitting investment in areas from education and health to tackling poverty and climate, some see it driving inflation down and forcing the U.S. Federal Reserve and others to hold back from further rate hikes.”I want the outlook to become a little weaker so that the Fed rates start going down and that whole sucking-out of liquidity by global central banks eases,” Sumant Sinha, chairman and CEO of Indian clean energy group ReNew Power, told Reuters on the sidelines of the Davos meeting.”That will benefit not just India but globally,” he said, adding the current round of rate hikes was making it dearer for clean energy companies to fund their capital-intensive projects.Others said that while more affluent people would likely escape the worst effects of recession on the back of high inflation levels, it would hit lower middle income groups hard.”If you only have your time and your energy which is creating your income, you’re getting ravaged right now because your wages are just not keeping pace,” said Anthony Scaramucci, founder of U.S.-based investment firm SkyBridge Capital.Other main findings of the WEF survey included:- Nine out of 10 respondents expect both weak demand and high borrowing costs to weigh on firms, with more than 60% also pointing to higher input costs. – these challenges are expected to lead multinational businesses to cut costs, from reducing operational expenses to laying off workers- however, supply chain disruptions are not expected to cause a significant drag on business activity in 2023- the cost-of-living crisis may also be nearing its peak, with a majority (68%) expecting it to have become less severe by the end of 2023. More

Investing.com — House Speaker Kevin McCarthy calls for spending cuts at the start of a week when the U.S. is set to bump against the federal debt ceiling. The World Economic Forum begins at Davos but there are big China- and Russia-shaped holes in the delegate lists. U.S. stocks are closed for the MLKD holiday but China and Europe advance as natural gas prices plummet and regulators cut more slack to China’s beleaguered tech sector. Here’s what you need to know in financial markets on Monday, 16th January. 1. U.S. braces for debt ceiling battle The U.S. House of Representatives is bracing for a bitter struggle over the federal debt ceiling. While the issue is usually one of political theater that tends to be resolved before the country shoots itself in the foot with a voluntary default, things may turn out a little differently this time.Toughness on spending plans and debt levels was one of the conditions extracted from new House Speaker, Kevin McCarthy, in return for the support of Republican hard-liners.  The government will hit the Congressionally-approved ceiling on Thursday, Treasury Secretary Janet Yellen told both parties in a formal letter last week. After that, it will implement emergency measures to continue operating, but these will be exhausted by June. That timeline suggests nearly five months of effective paralysis on Capitol Hill as the two parties indulge in their usual game of trying to shift the blame.McCarthy said at the weekend the GOP, which took back control of the House in November’s mid-term elections, will require spending cuts in return for agreeing to raise the ceiling.2. A depopulated Davos The World Economic Forum begins in Davos, with a line-up that reflects the setbacks suffered by globalization in the last couple of years.The glitzy gabfest for business and political leaders will feature no delegations from either China or Russia, a result of the U.S.’s increasing estrangement from the former and the breaking of most diplomatic bridges with the West by the latter with its invasion of Ukraine.A resolution to the Ukraine conflict seems as far away as ever after a Russian missile strike on a residential building in Dnipro at the weekend killed 35 civilians.There were also signs that Ukraine’s western allies were moving closer to sending it main battle tanks, a step that they have so far shied away from for fear of escalating the conflict further. The U.K. announced it will send 12 Challenger 2 tanks, while Germany’s Defense Minister Christine Lambrecht – who has resisted approving the dispatch of Leopard 2 tanks to Ukraine – resigned.3. Stocks in Europe and China advance; U.S. shut for MLK dayGlobal stocks were mixed in the absence of a clear lead from the U.S., something likely to last all day due to the Martin Luther King Day holiday there.By 06:25 ET (11:25 GMT), the Euro Stoxx 50 index was up less than 0.1% while the broader Stoxx 600 index was up 0.2%.Hopes that Europe will avoid an economic contraction this year have risen in recent days as natural gas prices have collapsed and the euro and pound have strengthened, two factors that will greatly reduce the pressure from imported inflation and reduce the need for more aggressive interest rate hikes from the Bank of England and European Central Bank.4. Didi back in Beijing’s good gracesChinese stock indices rose strongly again overnight, with most of the main boards gaining around another 1.5% after ride-hailing business Didi (OTC:DIDIY) said it had received permission from Beijing to start registering new customers again. The Hang Seng Technology index, which has gained over 60% in the last three months, nonetheless paused for breath, losing 1.1%.The ban on new customers, imposed by the Cyberspace Administration of China 18 months ago, had been a key moment in China’s clampdown on the wealth and power of China’s Internet moguls, forcing Didi into an ignominious delisting from the New York Stock Exchange only a few months after its IPO there.The reversal of the ban is the latest evidence of Beijing easing the pressure on the Tech sector in recent weeks, and follows such steps as the granting of permission for financial services Ant Group to proceed with capital raising measures.5. Oil edges down as European gas prices slump againCrude oil prices fell on signs that the expected pickup in Chinese demand may take a little longer to materialize than thought, although the trigger related to a slightly different market.Reports suggested that Chinese gas traders are diverting cargoes of liquefied natural gas to Europe amid high levels of storage that point to subdued industrial demand at home.The same reports drove benchmark European gas prices sharply lower again. The Dutch TTF contract fell 11.2% to a new 16-month low of €57.61 a megawatt-hour (€1=$1.0827), as German Vice-Chancellor and Energy Minister ruled out a repeat of last year’s spike. More

The world’s second-largest economy has seen a surge in COVID infections after Beijing abruptly removed stringent anti-virus curbs last month. Authorities said on Saturday nearly 60,000 people with COVID have died in hospitals between Dec. 8 and Jan. 12.The funding should be mainly used for treatment, temporary work allowance for medical staff, vaccinations and improving medical treatment capabilities, said the statement. China will also support the use of local government bonds and the issuance of special local government bonds for building qualified health care projects, in a bid to meet the needs of public medical treatment, it said. Resource coordination of first-aid in the countryside should be done well, and medical treatment of patients with severe conditions must also be prepared, the statement added. The country will set up “green channels” for the government, which will facilitate the purchase of medical supplies, vowing “COVID prevention and control must not be affected by funding issues,” said the statement. In 2022, declining state land sales revenue amid an ongoing crackdown on debt in the sector severely eroded local governments’ financial power – a situation exacerbated also by China’s feeble growth, weak tax income and crippling COVID restrictions.Gross domestic product (GDP) likely grew just 2.8% in 2022 as lockdowns weighed on activity and confidence, according to a Reuters poll, slower than a 3.2% rise seen in October’s forecast and braking sharply from 8.4% growth in 2021.The government is due to release the GDP data, along with December activity data, on Tuesday at 0200 GMT. More

TOKYO (Reuters) – The Japanese government’s top economic policy panel on Monday held its first round of special sessions that will discuss the medium-to-long term direction of fiscal and monetary policies, including the pros and cons of “Abenomics”.Japan pursued a reflationary policy led by monetary stimulus under former premier Shinzo Abe which has helped pull the world’s No. 3 economy out of 15 years of deflation.Financial markets are, however, now more focused on if and when the central bank will pull back on monetary stimulus, given sharp rises in inflation.”There’s a global economic trend of shifting towards new policy as seen in (U.S. Treasury Secretary Janet) Yellen’s calls for modern economic policy, which would mark a shift away from conventional supply-side economics,” Economy Minister Shigeyuki Goto told reporters after the special sessions.The sessions will be held several more times to reflect the debates on the government’s annual economic policy blueprint, due out in June.Goto said he would attend the Davos meeting this week to reaffirm Japan’s stance of prioritising economic recovery near term before reining in medium- to long-term fiscal reform.Eight economists, including an expert on the country’s inflation trends, were invited to the session.The sessions do not intend to discuss the Bank of Japan’s exit strategy or draft new policy objectives to review a 2013 written mission statement between the government and the central bank, Cabinet Office officials said.The statement in question was issued in January 2013 shortly after Abe swept to power pledging to reflate the economy, in which the BOJ vowed to achieve a 2% inflation target at the earliest possible time, while the government aimed to undertake structural reform, or the third arrow of Abenomics and tackle fiscal reform in the long run. Monday’s session comes just one day before the BOJ kicks off its first two-day rate-review of 2023.Financial markets have bet that a weak yen, rising consumer prices and more political pressure from the government will force the central bank to finally drop its ultra-loose policy at or after the end of Kuroda’s 10-year tenure this April.Prime Minister Fumio Kishida last month announced the plan for the special CEFP sessions, saying they would stimulate discussion on how to achieve a “virtuous cycle” of growth that could be reflected in the government’s annual mid-year policy blueprint. More

Good morning and as business leaders and policymakers gather for the first day of the World Economic Forum in the Swiss ski resort of Davos there is a warning that the world’s biggest companies are facing multibillion-dollar writedowns on recent acquisitions.US media and healthcare companies are among those to have slashed the value of business units in the past few months, and accountants at valuation service Stout are warning that more cuts could be imminent as the annual reporting season gets under way.An era of high interest rates, rising inflation, geopolitical uncertainty and climate chaos is undermining business confidence around the globe. In a recent column, the academic Adam Tooze said the world was facing a “polycrisis”. Gideon Rachman, the FT’s foreign affairs commentator, wrote yesterday that “the fear haunting the WEF is that a long period of peace, prosperity and global economic integration could be coming to a close — just as it did in 1914”.FT Live: The FT will be at Davos covering the news but also hosting a series of in-person and digital events with leaders in policymaking, business and finance. View the events and register for free. Five more stories in the news1. US companies turn to convertible bonds December was the busiest month of 2022 for convertible issuance by deal count, according to Refinitiv data, after an otherwise “dead” year. Extreme volatility and rising interest rates made last year the worst year for traditional stock market listings in the US since 1990. But debt that includes an equity component has seen a pickup in activity.2. US cracks down on private equity securitisation vehicles Regulators are cracking down on a type of investment vehicle used by the private equity industry over fears that rating agencies are downplaying the dangers of the products and exposing insurers to under-appreciated risks. The vehicle, known as “collateralised fund obligations”, echo the “collateralised debt obligations” that played a central role in the 2008 financial crisis. Private capital correspondent Kaye Wiggins explains.3. Taiwan presidential contender sparks US concerns over China tensions Taiwan’s ruling Democratic Progressive party yesterday elected Lai Ching-te, a man virtually unknown outside his country, to be its chair and likely next leader ahead of an election in 2024. Lai, described as a “deep green” or someone with radical pro-independence leanings, is expected to face Hou Yu-ih, the popular mayor of the country’s largest municipality and a member of the more China-friendly opposition party.4. Bayer shuns ‘innovation unfriendly’ Europe The German pharmaceutical company has said it is shifting the focus of its drugs business to the US and away from Europe, where governments are making “big mistakes” in how they manage health budgets. Stefan Oelrich, head of Bayer’s drugs business, told the Financial Times that policies such as a medicines levy in the UK and similar schemes in Germany were dissuading investment.5. Ford to rely less on Volkswagen The US automaker is poised to cut its dependence on Volkswagen technology for its next generation of electric cars in Europe, unravelling a core part of the alliance formed by the rivals two years ago. Ford is preparing to launch vehicles this year and next using VW-sourced batteries, but expects to use an in-house system from 2025.The day ahead N Ireland trade talks UK foreign secretary James Cleverly holds talks with European Commission vice-president Maroš Šefčovič on the Northern Ireland protocol after a tentative breakthrough last week.Military drills in Belarus Belarus and Russia begin joint aviation drills of air divisions as part of the countries’ regional grouping of troops.Martin Luther King Day Banks, stock markets and Congress will be closed in the US today as the country observes a national holiday to honour civil rights activist Martin Luther King Jr.China’s GDP China’s National Bureau of Statistics will tomorrow release what is expected to be another set of disappointing economic growth figures. Here are five things to look out for.What else we’re reading What the end of the US shale revolution would mean for the world Fracking catapulted the US to the top of the energy hierarchy, especially after Russia cut natural gas shipments to Europe and western sanctions targeted Moscow’s oil. But higher costs, labour shortages, low yields and a lack of reinvestment threaten that position.

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The Xi nobody saw coming When Xi Jinping consolidated his hold on China’s communist party at its five-yearly congress in October, the last thing anyone expected from the strongman president entering his 11th year in power was a sudden about face. Yet within weeks, Xi’s government had reversed its efforts to control Covid-19, Big Tech companies, the property market and more. The 180-degree turn raises doubts about everything the world thought it knew about Xi, argues Ruchir Sharma.Enron, Madoff and FTX: New York’s Belfer family The wealthy American oil dynasty was a client of fraudster Bernard Madoff and lost billions in the demise of Enron. Now, it has been embroiled in the collapse of FTX, according to court documents, showing just how far the crypto exchange founder Sam Bankman-Fried penetrated the US elite in his drive to attract investment.The Henry Mance Interview Tyler Cowen has become a cult figure among a hyper-intellectual elite bent on self-improvement. The eclectic economist champions markets and big business and his latest venture is an online university. “My personal ambition is to be the individual who has done the most to teach the world economics, broadly construed,” he tells Henry. The lure of Singapore, ‘Asia’s Switzerland’ Chinese wealth is moving into Singapore as individuals and companies view it as an attractive vessel to navigate through US-China tensions, skittish financial markets and a possible global recession. But can the city-state maintain its neutrality?Take a break from the newsBeaches, baths, spinning and spas — here are five feel-good destinations for 2023.

The Well Spa, outside Oslo, has quietly added a 104-room hotel to its expanse of hydrotherapy-steam-sauna facilities More