Global ETF News Older than One Year
Geoeconomic Fragmentation Threatens Food Security and Clean Energy Transition
October 3, 2023--Providing corridors for food staples and critical minerals could avert food crises and help keep the green transition on track.
Russia's invasion of Ukraine in 2022 fragmented major commodity markets. Countries have since restricted trade in commodities, with a more than twofold increase in new policy measures relative to 2021.
Commodities, particularly minerals critical for the green transition and some highly traded agricultural goods, are especially vulnerable in the event of more severe geoeconomic fragmentation, as we show in a chapter of our latest World Economic Outlook.
Source: imf.org
IMF Working Paper-Geoeconomic Fragmentation and Commodity Markets
October 3, 2023--Summary:
This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities.
We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose.
We find that commodity trade fragmentation- which has accelerated since Russia's invasion of Ukraine-could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
Source: imf.org
WEF-Costing the earth: What will it take to make the green transition work?
September 29, 2023--Achieving net zero by 2050 requires a complete overhaul of the world's energy, transport and industry, as well as agriculture and forestry.
The green transition will also require a lot more investment than the world is currently providing, but reaching the levels needed is not impossible.
The green transition will also require a lot more investment than the world is currently providing, but reaching the levels needed is not impossible.
Here are three aspects key to understanding the investment needed and how the world can help fund and facilitate a successful green transition.
Here are three aspects key to understanding the investment needed and how the world can help fund and facilitate a successful green transition.
For the green transition to achieve net zero by 2050 requires a complete overhaul of the world's energy, transport and industrial systems, as well as the transformation of agricultural and forestry practices.
It will also require a lot of investment-much more than the world is currently providing- but it is not impossible.
Source: WEF (World Economic Forum)
IMF Working Paper-New Evidence on Spillovers Between Crypto Assets and Financial Markets
September 29, 2023--Summary:
We analyze returns and volatility spillovers among a representative set of crypto and financial assets. The magnitude of spillovers increases during periods of heightened turbulence due to negative economic-financial news, crypto market events, or exogenous shocks.
There is evidence of increasing spillovers over time, with a peak during the COVID-19 pandemic, implying growing interdependence. Crypto assets predominantly transmit spillovers to financial markets, though reversals occur during periods of financial stress. The increased correlation during risk-off episodes suggests that crypto assets could serve as important conduits for financial market shocks, generating financial stability risks.
Source: imf.org
IMF Working Paper-Assessing Macrofinancial Risks from Crypto Assets
September 29, 2023--Summary:
Failures in the crypto space-including the fall of Terra USD and the FTX debacle-have sparked calls for strengthening countries' policy frameworks for crypto assets, including by enhanced regulation and supervision. How have these heightened concerns about crypto assets been picked up in systemic risk assessment, and what can be done going forward?
In this paper, we introduce a conceptual macrofinancial framework to understand and track systemic risks stemming from crypto assets. Specifically, we propose a country-level Crypto-Risk Assessment Matrix (C-RAM) to summarize the main vulnerabilities, useful indicators, potential triggers and potential policy responses related to the crypto sector. We also discuss how experts and officials can weave in specific vulnerabilities stemming from crypto asset activity into their assessment of systemic risk, and how they can provide policy advice and take action to help contain systemic risks when needed.
Source: imf.org
World Bank Trade Watch-Goods Trade Weakened Further
September 25, 2023--Global goods trade contracted further in the second quarter of 2023 as demand weakened in all regions amid tight monetary conditions, lingering inflationary pressures, and elevated geopolitical tensions.
Services trade continued to recover, with travel on track to exceed 2019 pre-pandemic levels in 2023, particularly in China and the rest of East Asia.
Containerized shipping activity eased somewhat from May through August 2023, suggesting continued weakness in trade volumes.
Source: worldbank.org
OECD-Interim Economic Outlook, September 2023 Confronting inflation and low growth
September 19, 2023--The global economy proved more resilient than expected in the first half of 2023, but global growth is projected to be lower in 2024. Headline inflation is coming down but core inflation remains persistent.
The global economy proved more resilient than expected in the first half of 2023, but the growth outlook remains weak.
With monetary policy becoming increasingly visible and a weaker-than-expected recovery in China, global growth in 2024 is projected to be lower than in 2023. While headline inflation has been declining, core inflation remains persistent, driven by the services sector and still relatively tight labour markets. Risks continue to be tilted to the downside. Inflation could continue to prove more persistent than anticipated, with further disruptions to energy and food markets still possible. A sharper slowdown in China would drag on growth around the world even further. Public debt remains elevated in many countries.
Source: OECD
Global debt hits record $307 trillion, debt ratios climb-IIF
September 19, 2023-- Global debt hit a record $307 trillion in the second quarter of the year despite rising interest rates curbing bank credit, with markets such as the United States and Japan driving the rise, the Institute of International Finance (IIF) said on Tuesday.
The financial services trade group said in a report that global debt in dollar terms had risen by $10 trillion in the first half of 2023 and by $100 trillion over the past decade.
It said the latest increase has lifted the global debt-to-GDP ratio for a second straight quarter to 336%. Prior to 2023, the debt ratio had been declining for seven quarters.
Source: reuters.com
Where is the global economy heading in 2024? This is what chief economists think
September 15, 2023--The global economy is likely to weaken in the coming year, according to 61% of respondents in the World Economic Forum’s latest Chief Economists Outlook.
A majority (86%) of chief economists are optimistic that the global inflationary surge will ease.
Economists warn that the economic outlook could undermine progress towards development goals, with 74% saying geopolitical tensions will have the same effect.
If you're looking for a one-word summary of what lies ahead for the world economy in the coming year, it could well be "volatility".
One of the biggest sources of this volatility will be geopolitics, according to the chief economists surveyed for the World Economic Forum's latest Chief Economists Outlook.
But the situation is also nuanced, the report suggests. More positive shifts appear likely, including drops in inflation and a slowdown in interest rate rises.
Source: weforum.org
Global Debt Is Returning to its Rising Trend
September 13, 2023--Although global debt recorded another significant decline in 2022, it is still high, with debt sustainability remaining a concern
The global debt burden retreated for the second year in a row, even though it remains above its already-high pre-pandemic level, according to the latest update of our Global Debt Database.
The total debt stood at 238 percent of global gross domestic product last year, 9 percentage points higher than in 2019. In US dollar terms, debt amounted to $235 trillion, or $200 billion above its level in 2021.
Policymakers will need to be unwavering over the next few years in their commitment to preserving debt sustainability.
Source: imf.org
