IMF trims global growth forecast. In its quarterly World Economic Outlook, the International Monetary Fund (IMF) said on Tuesday that most countries would avoid a recession in 2023, but nonetheless forecast some of the slowest global growth in decades.  While downgrading its outlook for the global economy, the Fund now forecasts global growth to hit 2.8 percent this year, down from 3.4 percent in 2022 and from the 2.9 percent estimate for 2023 it made in its previous outlook in January. “The massive and synchronized tightening of monetary policy by most central banks is starting to bring inflation back towards its targets. At the same time, serious financial stability related downside risks have emerged in our latest forecast,” IMF’s Chief Economist Pierre-Olivier Gourinchas said.

US core inflation still high but shows signs of moderating. A key measure of US inflation remained elevated in March but showed hints of cooling, giving the Federal Reserve room to pause interest rate hikes. The much-anticipated Consumer Price Index (CPI) report by the US Labour Department showed that prices rose by 0.1 percent in March, less than the 0.2 percent increase expected by economists after February's 0.4 percent gain. On an annual basis, the index was up by five percent, down from 5.5 percent the month before and below estimates in the smallest 12-month gain since May 2021. Excluding volatile food and energy prices, the so-called core CPI notched up 0.4 percent in March and was up by 5.6 percent from a year earlier, accelerating slightly from 5.5 percent in February as housing costs rose. Another report showed that the Producer Price Index (PPI), a gauge of inflation at wholesale level, dipped 0.5 percent, the most since April 2020, after being unchanged in February. Evidence of cooling inflation could convince the Federal Reserve to halt its rate-hiking regime, even though CPI was still up by five percent year over year.

Eurozone investor confidence strengthens in April. Sentiment among investors in the countries that share the euro currency improved in April after an unexpected dip in March, continuing the positive trend of the recent months, a survey among 1300 investors showed on Tuesday. Investors’ assessment of current conditions rose to the highest level in more than a year, rising to -4.3 in April, from -9.3 previously. The fact that it remains in negative territory continues to paint a picture that the economy is still largely stagnating. However, there is no doubt that the eurozone economy has weathered the winter months better than many feared in last autumn. The mild winter and efforts to conserve energy helped prevent a dangerous energy crisis.

UK lenders to tighten credit standards. British lenders plan to change the standards they use to lend on a secured basis to households in the second quarter, in effect restricting the availability of secured credit to this segment of the population, survey results from the Bank of England showed on Thursday. However, the same survey shows that banks expect demand for secured lending to increase. Given higher Bank of England interest rates and the recent banking turmoil, lenders have become more risk-averse and raised their lending standards, making it harder for individuals who are perceived as risky borrowers to get loans. Higher interest rates also increase the cost of borrowing from their end, making it less attractive for banks to lend to certain groups of borrowers.

China recorded robust export growth in March, backing up the government’s pledge to shore up trade to support the economic recovery. In the first quarter of 2023, the value of China’s imports and exports climbed by 4.8 percent compared to the same period  last year as foreign trade gets back on track with the government rolling out a number of measures to boost the economy, according to latest data. In the meantime, analysts say the jump was more likely related to exporters rushing to fulfil a backlog of orders that had been disrupted by the pandemic in past months and warned the global demand outlook remained subdued.

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