THE GRAPHIC TRUTH: A WORLD GROWING APART

THE GRAPHIC TRUTH: A WORLD GROWING APART

The International Monetary Fund has released its latest World Economic Outlook and… it’s not so great. While the world economy continues to expand steadily at an annual clip of 3.7 percent, the combined effect of rising protectionism, geopolitical tensions, and political upheaval in key economies could soon throw a spanner into the works.


The graph above provides a look at a handful of the biggest countries where growth is picking up or slowing down the fastest.

And here are a few highlights where domestic politics are playing directly into the economic outlook:

Saudi Arabia – Crown Prince Mohammed bin Salman’s bid to liberalize certain aspects of his country’s deeply conservative society and the natural process of recovery from the previous year’s recession have nudged up economic growth (+3.1 points) fast. But his ruthless power grab – which includes crackdowns on activists and businessmen, and may now involve the murder of an opposition journalist – could undermine growth if investors fear he’s overplayed his hand.

United States – American politics and society may be extremely polarized, but the economy is humming along as President Trump’s tax cuts and deregulation measures have lent further momentum to a long-running recovery (+0.7 points). But his protectionist impulses could yet throw a damper on growth as businesses begin to reduce trade with China and other markets and consumers cut back on purchases.

Brazil  After a harrowing few years of economic crisis, Brazil is set to grow faster in 2018 (+0.4 points). And while presidential frontrunner Jair Bolsonaro’s nostalgia for dictatorship raises alarm bells about the durability of Brazilian democracy, his commitment to neo-liberal economic policies has placated investors for now. Still, progress on economic challenges that could catalyze long-term growth – such as reforming a bloated pension system – will require coalition building that the controversial and inexperienced Bolsonaro may not be able to muster.

Turkey  President Erdogan’s economic mismanagement and geopolitical missteps have plunged Turkey into a deep currency crisis that threatens the country’s broader financial and economic stability (-2.6 points). But his strongman approach leaves little room to make critical compromises on fiscal and financial policy – meaning that the outlook is as uncertain as ever for the Middle East’s second-largest economy.

People working at computers in a room labeled Malware Lab

Microsoft observed destructive malware in systems belonging to several Ukrainian government agencies and organizations that work closely with the Ukrainian government. The Microsoft Threat Intelligence Center (MSTIC) published a technical blog post detailing Microsoft’s ongoing investigation and how the security community can detect and defend against this malware. Microsoft shared this information over the weekend to help others in the cybersecurity community look out for and defend against these attacks. To read more visit Microsoft On the Issues.

Ian Bremmer's Quick Take: Hi everybody. Happy Tuesday after the long weekend for those of us that had a long weekend. I thought I would kick us off with the first major foreign policy crisis of the Biden administration. And that is of course, Russia-Ukraine. Afghanistan, of course, was a debacle, but not exactly a global crisis. This of course has the potential to really change the way we think about European security and about US relations with the other major nuclear power in the world. So, I would say that the level of concern is even higher and there are a lot of things we can say.
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The looming pandemic debt cliff

Right on the buzzer, Sri Lanka on Tuesday narrowly avoided its first-ever default on its sovereign debt. But the cash-strapped country is still on the hook for a lot more cash this year, which is shaping up to be a very painful one for low-income countries deep in the red due to COVID.

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The Graphic Truth: Deep in the red with China

The pandemic has thrown many already-indebted countries further into the red. The problem is two-pronged for many Asian, African, and Latin American countries. They have taken on huge amounts of debt from the IMF to weather pandemic-related economic uncertainty, while also being caught up in a debt trap set by China, which funds large infrastructure projects in developing states but often with complex or misleading fine print. We take a look at which countries out of a group of 24 surveyed states owe China the most compared to their respective IMF debts.

Ukrainian former President Petro Poroshenko gestures as he walks to address supporters upon arrival at Zhulyany airport in Kyiv, Ukraine January 17, 2022.

Ukraine’s political woes. While Russia maintains tens of thousands of troops on the Ukrainian border, domestic politics in Kyiv are becoming increasingly contentious. This week, former President Petro Poroshenko – who was elected in 2014 after the Maidan Revolution ousted a longtime Putin ally and then defeated for re-election in 2019 – has now returned to Ukraine after a month abroad to face a host of criminal charges. Those charges include treason, an alleged crime related to his decision to sign government contracts to buy coal from mines held by Russian separatists in eastern Ukraine in 2014. Poronshenko, a businessman worth $1.6 billion, says the deal was necessary to keep Ukraine from economic collapse and that the charges are an attempt by current President Volodomyr Zelensky to distract from unfavorable perceptions of the country’s (currently lousy) economic outlook. He also calls it a manufactured crisis and a “gift” to the Kremlin, because it distracts from Russia’s ongoing aggression.

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The Taliban’s never-ending crisis

Afghanistan has now become what the UN is labeling the planet’s worst humanitarian disaster. Indeed, last week the world body issued its largest-ever donor appeal for a single country to battle the worsening crisis there, caused by freezing temperatures, frozen assets, and the cold reception the Taliban have received from the international community since they took over last summer.

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A newborn baby is seen being cared for in the ward of the hospital neonatal care center. The results of the seventh national census of China will be released soon, and some institutions predict that the birth rate will be lower than the death rate for the first time.

7.52: Birth rates in China dropped to a record low 7.52 per 1,000 people in 2021, down from 10.41 in 2019. This comes as the Chinese Communist Party is trying very hard to boost birth rates to revive a slowing economy.

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China’s homegrown COVID vaccines were once crucial — but they're not as effective against omicron as mRNA jabs.

What's more, with with local cases near zero for the better part of the pandemic, most Chinese have no natural immunity. That could spell disaster for Beijing as omicron surges.

Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, warns that the highly transmissible new variant will make zero COVID harder and harder to sustain.

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