LIVE Global Economy Updates: Recession, Cost of living crisis, Inflation, Market developments

European Central Bank has increased its benchmark deposit rate from O% to 0.5%

The Asian Development Bank on Thursday slashed its 2022 growth forecast for developing Asia and warned economic conditions could worsen, as the war in Ukraine and supply chain disruptions drive up prices.

While the impact of Covid-19 had eased, the region was now grappling with the fallout from Russia's invasion of Ukraine, lockdowns in China and aggressive interest rate hikes, the Philippines-based bank said.

To reflect the deterioration across developing Asia -- which stretches from the Cook Islands in the Pacific to Kazakhstan in Central Asia -- the bank cut its 2022 growth forecast to 4.6 percent.

That compares with its previous prediction in April of 5.2 percent and the 6.9 percent growth chalked up last year.

Oilfield services group Baker Hughes experienced a fall in revenue by almost two per cent from 2021 and they pointed out the suspension of their operations in Russia in the aftermath of the Ukraine crisis as the major reason

South Africa inflation hits 13-year high of 7.4% in June: data

The rate of UK inflation rose to a fresh 40-year high of 9.4% in June as a sharp rise in petrol prices drove the rate towards double digits for the first time since 1982

After the pandemic started in 2020, millions of workers began working from home. However, when more individuals start going back to work, they are met with considerably higher expenses for almost everything, including food, transportation, and daycare. Going back to work now costs more due to rising petrol prices and growing inflation. And if their wage increases aren't keeping up, this is reducing workers' salaries.

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On Tuesday, the euro increased by more than 1% against the dollar as traders debated whether the European Central Bank could raise interest rates more than anticipated to combat spiralling inflation. The euro appreciated 1.1% to $1.0253 ahead of the ECB meeting on Thursday after falling to parity with the US dollar the previous week.

While the value of wages is declining at a historic rate due to decades-high inflation, Britain's unemployment rate is still close to a 50-year low. The Office for National Statistics released a statement stating that the unemployment rate was unchanged from the prior quarter at 3.8% in the three months ending in May. The number of open positions is still very near record highs.

Tuesday saw a small increase in oil prices, reversing earlier losses after prices had jumped by more than $5 a barrel the previous day due to supply fears. The conflict in Ukraine has caused Western sanctions on Russian crude and fuel supplies, which have disrupted trade flows to refiners and end-users. At the same time, there are growing concerns that central bank efforts to tame surging inflation may lead to a recession, which would reduce future fuel demand.

Amid the Russia-Ukraine war, there has been collateral damage, shared not only by the two countries involved but others too. One such country is Greece and its dying fur trade industry. 

Reportedly, the fur trade industry of Greece, especially in the Kastoria region is staring at a bleak future, Ever since the war broke out, Russia and its tourists, which used to be the biggest market of fur have disappeared entirely. Trying to open new markets is an uphill task and time is not by the side of fur traders.

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In a world which is still feeling the after-effects of a deadly global pandemic and simultaneously witnessing a geopolitical modern war unfold; investors everywhere are assessing the long-term consequences of these events. The concoction of the aforementioned circumstances has led experts to cast a warning that we stand at the cusp of a global recession, primarily due to rising inflation and the destruction of supply chains. 

Three Wall Street leaders have laid down three warning signs that could be the precursor to an economic downturn. One, that is expected to dwarf 'The Great Recession' of 2008. A deadlier future pandemic, labour shortage and deglobalisation of the world order. 

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As per to official data released on Monday, inflation in New Zealand climbed to a 32-year high of 7.3 percent on-year in the second quarter.

According to Stats NZ, rising fuel, food, and housing expenses were the key causes of the inflation, which have reached levels last seen in 1990.

Earlier this month, the central bank of New Zealand hiked its benchmark interest rate to the highest level in six years and also issued a warning that additional increases might be forthcoming.

According to a UK Active poll, up to 79 per cent of swimming pools in the UK may have to close their doors over the next six months if they can't get further financial assistance. Pools have already closed in Tamworth, Suffolk, and Scotland because of the scarcity.

Starting on July 15, the cost of fuel for personal vehicles will drop to $3.95 per gallon, a 24 percent decrease from the cost at the end of June. Since May, the cheaper price has already helped public transportation. In the second week of protests against fuel price increases—which have increased by 47% since January—hundreds demonstrated in Panama on Monday.

A record number of developing countries are now in difficulty, according to traditional debt crisis indicators like collapsing currencies, 1,000 basis point bond spreads, and burnt foreign exchange reserves. Rising borrowing prices, inflation, and debt all fuel concerns of an economic collapse, with the result that Lebanon, Sri Lanka, Russia, Suriname, and Zambia are already in default, Belarus is on the verge of default, and at least another dozen countries are in danger of default.

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A growing number of Europeans fear that this winter they may have to choose between paying their bills and putting food on the table due to the recent spike in energy prices. According to data from Eurostat quoted by the European Commission in its 2021 State of the Energy Union report, some 31 million Europeans struggled to heat their houses adequately and lived in energy poverty.

Thousands of people demonstrated against Viktor Orbán's administration in Budapest on Saturday for a fifth day as resentment over tax measures that detractors claim would harm small businesses grows. Since the parliament adopted a legislation amendment on Tuesday that will affect hundreds of thousands of small company owners, Hungarians have taken to the streets in protest.
 

G20 finance chiefs pledged to address global food insecurity issues and the rising debt in various countries but there were few major developments when it comes to the ongoing Russian invasion of Ukraine, according to AFP.

The Reuters report calculated the rough estimate of debts incurred by the countries who are on the verge of default – Argentina leads the pack with Ecuador and Egypt not far behind.

A number of countries are projected to default on their loans, according to a report by Reuters. Lebanon, Sri Lanka, Russia, Suriname and Zambia have already defaulted while around 10-12 countries are currently in danger of faltering amid fuel shortages and rising inflations.

Chile's central bank announced a $25 billion intervention in the foreign exchange market to support the peso after it fell to a record low, giving the currency a boost on Friday.

In a statement released Thursday night, the bank said the peso had depreciated with unusually high intensity and volatility over the last few days.

On Thursday, the peso hit a record low of 1,045.80 to the dollar, dropping 3.7% on the day. The bank said it decided to intervene due to the U.S. dollar's strong global advance since June, the drop in the price of copper, Chile's main export, and "local uncertainty."

Global equities climbed on Friday, while the dollar dipped and oil rose as investors reduced their expectations of an aggressive interest rate hike by the Federal Reserve this month and as US spending data beat forecasts, reports Reuters.

Investors still face concerns that the world economy is headed for recession as central banks rush to get on top of galloping inflation, with steep interest rate rises seen this week in Canada, New Zealand, Chile, South Korea and the Philippines. Many are also still digesting an easing of Italy's political crisis.

Fears of an economic downturn were fanned on Friday by Chinese data showing annualized 0.4% growth in the second quarter, the worst since at least 1992, excluding early 2020 when the COVID pandemic erupted.

International Monetary Managing Director Fund Kristalina Georgieva has said that global interest rates will likely keep rising until 2023 when heated prices will begin to cool in response to the actions from central banks,

She said that commodity prices, such as oil, may have leveled out and started sliding in recent months, but they will do so in response to recession risks and not necessarily because inflation has been tamed.

A two-day meeting of finance ministers and central bankers from the Group of 20 major economies is expected to conclude without a formal communique, as Russia's war in Ukraine continued to divide the group, two sources familiar with the matter said.

Instead, Indonesian Finance Minister Sri Mulyani Indrawati is expected to issue a chair's statement summarizing the events of the meeting, the sources said.

Oil gained 2.5% on Friday after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.

"Part of the support is that everybody and their brother who digs down into the Saudi situation see that they don't have a lot of capacity left," said John Kilduff, partner at Again Capital LLC in New York.

Brent crude futures settled at $101.16 a barrel, rising $2.06, or 2.1%, while West Texas Intermediate crude settled at $97.59 a barrel, gaining $1.81, or 1.9%.

Wall Street stocks closed sharply higher on Friday (July 15), ending several days of sell-offs with a rebound fueled by upbeat earnings, strong economic data and waning fears of a larger-than-expected interest rate hike by the Federal Reserve.

All three major U.S. indexes posted solid gains, with financials leading the charge in the wake of Citigroup Inc's earnings beat.

This reversed Thursday's sell-off driven by downbeat guidance from rivals JPMorgan Chase and Morgan Stanley.

Even so, all three indexes ended below last Friday's close, as markets were spooked by hot inflation data out on Wednesday (July 13).

According to preliminary data, the S&P 500 gained 71.18 points, or 1.88%, to end at 3,861.56 points, while the Nasdaq Composite gained 202.60 points, or 1.80%, to 11,453.78.

The Dow Jones Industrial Average rose 655.83 points, or 2.14%, to 31,286.00.

Also read | The red-metal and its price has dropped below $7,000 a tonne. Goldman Sachs predicts it may go below the $6,700 mark in the coming months amid uncertainty in the Chinese market, while the US struggles with inflation.

Because of calls for a mortgage strike and the disappointing GDP result, China's stock market experienced its largest decline in eight weeks.The CSI 300 dropped 1.7 percent at the closing, the most since May 24.A growing number of homebuyers have threatened to cease making mortgage payments on unfinished flats, which has hurt real estate developers and financial institutions.

Analysts have cautioned that mounting demonstrations over postponed building projects might jeopardise any flimsy recovery in China's capital-starved real estate market and force banks to take significant losses on bad debts.

Group of 20 finance ministers and central bank chiefs met in Indonesia Friday for talks on the fallout from Russia's invasion of Ukraine, with the host warning them failure to tackle energy and food crises would be catastrophic.

The European Commission has warned that Europe’s economy is most likely to face the twin blows of slower growth and higher inflation even as it struggles to deal with the fallout from Russia’s invasion of Ukraine

Global stock markets reacted sharply amidst expectations that central banks might hike interest rates aggressively even as disappointing earnings revived recession fears.

According to Wall Street Journal, Amazon has started reducing the number of items it sells under its own brands amid weak sales.

The company has also reportedly discussed the possibility of exiting the private-label business entirely to mitigate regulatory pressure, the report added.

JPMorgan Chase and Morgan Stanley reported smaller profits for the second quarter on Thursday than for the same period last year, reports The New York Times. 

Amid slowing demand and sinking markets, experts believe that there is no recession as of yet.

Compared with a year earlier quarter's 4.8 perc cent, China's growth slid to a weak 0.4 per cent.

 Asian stocks hit a two-year low on Friday and were heading for a weekly loss, while the dollar was set for its third week of gains as a fresh slew of rate hikes around the world deepened concerns about the outlook for global economic growth, reports Reuters news agency. 

China's economy nosedived sharply in the second quarter, according to data released on Friday, while annual growth also slowed significantly, as a result of widespread COVID lockdowns

According to Bank of America economists, US will fall into a recession over the next year. 

The Indian rupee has fallen for four consecutive sessions, reaching a new record low of 79.90 while recovering by seven paise during the day on Thursday. 

On Thursday, the rupee plunged 9 paise to close at a new all-time low of 79.90 against the US dollar, according to news agency PTI. 

Bloomberg showed on Wednesday that the rupee was last changing hands at 79.8788 per dollar, edging closer to the 80 mark.

The 5-Star Movement, one of the Italian ruling government coalition's members, announced on Thursday that it will not participate in a parliamentary confidence vote. This puts Prime Minister Mario Draghi's coalition government in danger of collapsing. Reuters reported that Draghi himself has also announced that he would not lead an administration without 5-Star's participation. 

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US Treasury Secretary Janet Yellen said Thursday that Russia's war in Ukraine posed the "greatest challenge" to the global economy, as G20 ministers prepare to start talks in Indonesia.

"Our greatest challenge today comes from Russia," she told a news conference on the resort island of Bali ahead of a meeting between finance ministers from the world's top economies and central bank governors on Friday and Saturday.

"The international community must be clear-eyed about the economic and humanitarian consequences of his (President Vladimir Putin's) war."

The conflict caused rapid inflation at a time when the world was struggling to recover from the Covid-19 pandemic, endangering the gains of the past two years and threatening widespread hunger and poverty.