The guardians of the world economy will come together this week to survey a global picture that’s been turned on its head in the space of a few months.
The International Monetary Fund’s spring meeting — held virtually as a result of the coronavirus pandemic — will give officials a chance to update their outlooko reflect the new reality of shuttered economies, collapsing trade and mounting unemployment.
Officials have already said they see the world economysuffering its worst recession since the Great Depression this year, while the crisis, and the large-scale response from global governments means that the IMF’s October meeting — which saw concerns over an escalating trade war and calls for more fiscal stimulus — look like a relic from a bygone era.
What Bloomberg’s Economists Say…
“Investors are likely to focus on the latest forecasts from the International Monetary Fund for the global economy next week. They will show a dramatic downward revision as the world struggles to contain the spread of the coronavirus. We fear even this latest round of revisions may indicate the depth of recession is too optimistic.”
–For full note,click here
Harder data on the impact of restrictions in the world’s largest economy are also starting to trickle through, with the U.S. reporting retail sales and industrial production figures for March. Meanwhile a flurry of speakers from the Federal Reserve will give their latest view of the outlook, and the Bank of Canada announces its latest policy decision.
Here’swhat happened last week and below is our wrap of what else is coming up in the world economy.
U.S. and Canada
The pandemic shutdown’s economic ripples are going to appear in a wider variety of U.S. data, led by what’s forecast to be the biggest drop in retail sales in at least three decades, plus one of the largest post-WWII declines in factory production. Initialjobless claims could be in the millions for a fourth straight week as more Americans break through to jammed websites and phone lines.
St. Louis Fed President James Bullard, Chicago Fed President Charles Evans and Atlanta Fed President Raphael Bostic are scheduled to speak, while the Fed’s Beige Book on Wednesday will likely point to a significant change in the outlook.
Bank of Canada policy makers meet Wednesday to decide on rates and present new quarterly forecasts. The central bank may announce another series of measures to provide support to the nation’s reeling economy. These may include plans to acquire more long-term debt and assets from regional governments.
- For more, read Bloomberg Economics’ full Week Ahead for the U.S.
Indonesia’s central bank is set to take further action to cushion the blow from the coronavirus, with economists expecting another interest rate reduction on Tuesday. The big show will come at the end of the week when China reports its GDP report for the first quarter, with an historic contraction expected by economists. March data on retail sales, industrial production, joblessness and investment will be also be scrutinized on Friday for any signs the world’s number 2 economy is on the path to recovery.
- For more, read Bloomberg Economics’ full Week Ahead for Asia
Europe, Middle East and Africa
European Union finance ministers managed to paper over differences last week by agreeing a 540 billion-euro ($590 billion) package, but EU leaders won’t take it up for debate until April 23, when then will either reopen the accord or approve it as it stands. In the meanwhile, planned gradual easings of lockdowns in Austria and Denmark may offer the rest of the continent an early glimpse into the path to recovery.
In the U.K., Bank of England policy makers Silvana Tenreyro, Ben Broadbent and Andy Haldane are scheduled to speak Thursday and Friday.
Turkey on Wednesday will announce its budget balance for March, when the government gradually began to restrict mobility in response to the coronavirus pandemic. The measures slowed the economy considerably and will likely result in lower tax collection and a wider deficit. A 100-billion-lira ($14.9 billion) stimulus package largely consisting of tax deferrals will also hit government revenue, along with drops in tax revenues on tourism and corporate income.
In Ukraine, the parliament will hold an emergency meeting Monday to approve the law on bankrupt lenders to unlock an IMF loan. Lawmakers will also debate revised budget that might include some help for business.
- For more, read Bloomberg Economics’ full Week Ahead for EMEA
Data on Argentina’s March inflation out Wednesday will be its first major economic report reflecting the nationwide lockdown imposed amid the coronavirus pandemic. The government has already reported that supermarkets aren’t abiding by its freeze on prices.
Meanwhile in Chile, the central bank posts the minutes of its March 31 meeting where it cut the key rate to 0.50% — matching a record low — and expanded a bank-bond purchase program to compliment government stimulus measures equivalent to 4.7% of GDP.
- For more, read Bloomberg Economics’ full Week Ahead for Latin America
— With assistance by Theophilos Argitis, Robert Jameson, Scott Lanman, Malcolm Scott, and Alaa Shahine
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