1. IMF Upgrades China’s Growth Forecasts
The International Monetary Fund (IMF) has increased its growth projections for China’s economy, now predicting a 5.4% expansion for 2023, up from a previous estimate of 5%. For 2024, the forecast is raised to 4.6%, an improvement from the earlier 4.2% estimate. This revision reflects stronger-than-expected third-quarter growth and new economic support measures, including a 1 trillion yuan ($137 billion) sovereign bond issuance. Despite these positive adjustments, China continues to face deflationary pressures, with the consumer price index dropping 0.2% in October and exports contracting by 6.4%.
2. Eurozone Faces Rising Recession Concerns
Economic anxiety is mounting in the Eurozone as recent data reveals a downturn in business activity. The composite purchasing managers’ index fell to 46.5 in October, indicating ongoing contraction across sectors. Services and manufacturing sectors are both struggling, with Germany, France, and Italy experiencing declines in services activity. Retail sales in the Eurozone fell by 0.3% month-on-month and 2.9% year-on-year in September, exacerbating fears of a potential recession. The Eurozone economy contracted by 0.1% in the third quarter.
3. Global Economic Snapshots
- UK: The UK’s GDP remained flat in Q3, avoiding a recession but reflecting weak economic growth. British house prices rose for the first time in six months in October.
- Japan: Real wages in Japan fell by 2.4% in September, marking the 18th consecutive month of decline.
- Mexico: Inflation eased to 4.26% in October, the lowest in over two years but still above the central bank’s target.
- Philippines: Government spending spurred a 5.9% year-on-year growth in the third quarter, with inflation slowing for the first time in three months.
- Germany: Industrial production dropped by 1.4% in September, reflecting decreased incoming orders.
- Peru: The central bank cut its benchmark interest rate by 25 basis points to 7%, the third consecutive reduction aimed at easing the country out of recession.
4. Insights on Central Bank Digital Currencies (CBDCs)
Sandra Waliczek from the World Economic Forum explores how central bank digital currencies (CBDCs) differ from cryptocurrencies and stablecoins. Unlike the latter, CBDCs are issued and backed by central banks, providing guaranteed consumer protection. Discussions around CBDCs focus on ensuring data privacy and protection through advanced cryptography and legal frameworks. For more information, check out the Forum’s Digital Currency Governance Consortium White Paper Series.
