IMF raises global growth forecast but warns of lopsided recovery. The International Monetary Fund (IMF) on Tuesday raised the global growth forecast for next year, projecting growth to be driven largely by the expansion in the advanced economies, while emerging and developing economies are set to have modest gains. The global growth forecast for 2022 was raised to 4.9 percent from 4.4 percent, the IMF said in an update to its quarterly World Economic Forecast. More than a year after the coronavirus emerged, economic fortunes are closely tied to how successfully governments have been at providing fiscal support and acquiring and administering vaccines to their respective citizens. The global lender said that about 40 percent of the population in advanced economies had been fully vaccinated, while that figure is just 11 percent or less in emerging markets and low-income developing economies.
Fed leaves policy unchanged as economy remains on track. The Federal Reserve’s (Fed) policy-setting committee, the Federal Open Market Committee, concluded its two-day monetary policy meeting on Wednesday, leaving the target range for its federal funds rate unchanged at zero to 0.25 percent, and said it will continue with its $120 billion-a-month bond-buying program. The move was in line with expectations. The Fed still believes that the economy is on track to meet the tapering goals despite inflation rising above its target. Fed Chair Jerome Powell still has confidence that inflation will fall in the medium term and specifically stated that he felt there was no need to raise interest rates yet. However, the Fed still sees risks to the economic outlook.
Eurozone economic confidence hits record high, peak may be near. Eurozone economic sentiment rose to a record high in July, estimates from the European Commission showed on Thursday. However, a decline in optimism among consumers and the slower rate of increase may signal the peak is fast approaching. In its monthly survey, the EU executive showed that sentiment in the 19-country currency bloc rose to 119.0 points in July, a record since the data series began in 1985, from 117.9 in June, which was already a 21-year high. However, as the positive impact of the reopening of economic activities begins to wane and fears grow around the Delta coronavirus variant, sentiment grew at a slower pace. "Compared to the last months, the latest improvement was much weaker, suggesting that the indicator is approaching its peak," the European Commission said in a statement.
German consumer sentiment set to remain stable. German consumer sentiment held steady heading into August as shoppers became more eager to spend but took a cautious view on the economic outlook than a month earlier on worries about rising Covid-19 cases, a survey showed on Wednesday. The forward-looking GfK consumer sentiment index was unchanged at -0.3 in August. Economists had forecast the index to improve to +1.0. Rolf Bürkl, GfK consumer expert said the dynamism of vaccination has lately decreased significantly despite the availability of sufficient vaccines. This is currently preventing a further significant rise in consumer sentiment.
Malta Producer Prices Increase in June. Malta's producer prices increased in June, data from the National Statistics Office showed on Thursday. The producer price index, or PPI, rose by 2.16 percent year-on-year in June, on the heels a 1.73 percent increase in May. Prices for intermediate goods rose by 3.22 percent annually in June and capital goods rose by 0.31 percent. Prices for consumer goods increased by 2.69 percent. Domestic market prices increased 1.32 percent and non-domestic market prices rose 2.71 percent. On a monthly basis, producer prices rose by 0.36 percent in June, after a 0.56 percent increase in the previous month.