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Have the US and Canada managed a soft landing?
While that’s a lot of “ifs,” it’s better news than expected last year when many were predicting a rougher go of things and a decent chance of recession.
Stateside, economists are tilting more and more toward the US avoiding a recession of its own, which is also good news for Canada. Inflation is increasingly under control and the labor market is holding up. Plus the Fed is expected to cut interest rates this year, maybe even three times.
Annualized GDP growth estimates for the first quarter in the US are now up to 2.8% while estimates in Canada for growth are hovering around an unexpectedly robust 3.5%. Canadian inflation was 2.8% in February and 3.2% in the US.
Consumers and businesses are hoping for a cut in Canada, too, perhaps as soon as April 10, when the Bank releases its next rate decision. But if it doesn’t lower rates next week, it’s expected to get around to it before too long, perhaps by summer.
Could this be good news for President Joe Biden and Prime Minister Justin Trudeau? As Evan Solomon explained, reality and perception are often far apart when it comes to such matters, so it depends on whether the politicians can convince voters to give them credit for the turnarounds.Specialists tend to the body of a victim outside a damaged shopping center hit by a missile strike in Belgorod, Russia, on Feb. 15, 2024.
Hard Numbers: Missiles hit Russian border city, ex-FBI informant in Biden bribe case faces charges, Gaza needs new ‘Marshall Plan,’ UK slips into recession, Bangkok’s air becomes unbreathable
7: At least seven people, including a one-year-old girl, were reportedly killed on Thursday by an apparent Ukrainian missile strike in Belgorod, the closest major Russian city to Ukraine. This is not the first time Belgorod has been targeted amid the Russia-Ukraine war – dozens were killed in a strike there last December, as Ukraine seeks to show that it can still strike Russia, even as Moscow’s forces slowly push forward the front lines in the Donbas. Meanwhile, the US warned that the eastern Ukrainian town of Avdiivka, which has seen some of the worst fighting recently, is at risk of falling into Russian control.
25: Alexander Smirnov, a former FBI informant, has been charged with lying about President Joe Biden and his son Hunter Biden accepting payments from Ukrainian energy firm Burisma Holdings. The US Justice Department said Smirnov gave the false statements because he disliked Biden. If convicted, Smirnov faces up to 25 years in jail.
20 billion: The damage from the war in Gaza so far is estimated to be roughly $20 billion, according to a UN trade body official. The estimate is based on satellite images, but for an exact number, there will need to be an on-the-ground investigation. The official said that the Las Vegas-sized Gaza strip will need a “Marshall Plan” of its own after the Israel-Hamas war, in reference to the US-led effort to rebuild Europe after World War II.
0.3: The UK economy fell into a recession at the end of 2023, dealing yet another blow to Prime Minister Rishi Sunak as he hopes for reelection in a vote widely expected later this year. Data released Thursday showed GDP fell 0.3% in the final three months of last year, after shrinking 0.1% in the previous quarter.
156: The air in Bangkok was so polluted on Thursday that city employees were ordered to work from home for two days, and private sector workers were strongly encouraged to do the same. How bad was it? The Thai capital’s Air Quality Index hit 156. When levels go above 100, it’s considered to be unhealthy for sensitive groups, while levels above 150 are dangerous for everyone.
Security forces keeping watch after mosque explosion
Hard Numbers: ISIS-K strikes, ripple effects of Canadian wildfires, eurozone recession, Aussies rescue humpback in distress
11: At least 11 people, including two Taliban officials, were killed and dozens more injured in an explosion in a mosque in northeastern Afghanistan. The Islamic State offshoot has since taken responsibility for the blast. For more on ISIS-K and its ongoing beef with the Taliban, see our explainer here.
5,804: Smoke plumes from wildfires in Canada caused at least 5,804 delays on flights in and out of the US on Wednesday, as the Northeast in particular struggles with off-the-charts smoke pollution levels that have closed schools and public events. Meanwhile, experts say smoke plumes are expected to reach as far away as Norway after having recently passed over Greenland and Iceland.
0.1: The eurozone is technically in recession territory after recording two consecutive quarter contractions of 0.1% – in the last quarter of 2022 and the first quarter of this year. Still, the bloc’s economy is doing better than many initially anticipated at the outset of Russia’s war in Ukraine, and should grow by 0.9% this year.
40,000: Mesmerizing footage captured Australian marine workers rescuing a humpback whale that got tangled in a shark net off the coast of New South Wales. As more humpbacks — around 40,000 — head towards that coastline amid the northern migration season (May-November), Aussies have a special disentanglement crew ready to aid mammals that get stuck.Episode 3: Inflation Nations: What to know about inflation and interest rates
Listen: "During the course of this year, the Fed will not be concerned only with inflation as the months go by; increasingly the pendulum will shift, and they'll be concerned about the employment part of their mandate as well," says Charlie Reinhard, Head of Investment Strategy for North America at Citi Global Wealth Investments.
In the latest episode of Living Beyond Borders, a podcast produced in partnership between GZERO and Citi Global Wealth Investments, Reinhard joins Eurasia Group’s Rob Kahn for a check-in on the lasting, sticky rates of inflation, how the Fed will continue to adjust interest rates, and what kind of recession - if any - investors should prepare themselves for.
Shari Friedman
Managing Director of Climate and Sustainability, Eurasia Group
Charlie Reinhard
Head of Investment Strategy, North America, Citi Global Wealth Investments
Robert Kahn
Director of Geoeconomics at Eurasia Group
- Episode 1: Should I STILL be worried? ›
- S3 Episode 8: How closing the gender gap drives economic growth - GZERO Media ›
- S3 Episode 9: US/China power struggle, the global political balance, and your finances - GZERO Media ›
- Episode 6: Can the US and China find common ground? - GZERO Media ›
- Episode 7: How AI is changing our economy - GZERO Media ›
Podcast: China's economic head start & a world accelerating into recession
Listen: What's in store for the global economy in 2023? Well, it's not going to be pretty. A raging war in Europe, sky-high inflation, and an unstable China will create strong economic headwinds in the year to come. But it’s not all doom and gloom. Globalization has brought prosperity to billions worldwide. And in the United States, the economy has made it out of the pandemic remarkably well.
On the GZERO World podcast, Ian Bremmer speaks to renowned global economist, Dambisa Moyo, who says global inflation is not going anywhere, as the likelihood of a worldwide recession looms large. The US and China are moving into creating separate economic worlds, but are still closely linked. Although most of the world understands that they need to transition to cleaner energy, in the short term they still rely on “a hundred million barrels of oil every day.” Europe is creating what Moyo calls an “industrial Band-Aid solution,” rather than long term solutions to rely on energy from other countries. They discuss how these combined threats will affect the world economy this year.
- Podcast: Winter is coming. Global recession, too? ›
- Is the world on the brink of another global recession? ›
- What's the chance of a global recession in 2023? ›
- Podcast: Making sense of global inflation, looming recession, & economists who disagree ›
- China is open for business: Chinese Vice Premier at Davos - GZERO Media ›
- Global economy headed to a recession: Dambisa Moyo - GZERO Media ›
- Podcast: Larry Summers breaks down the banking crisis - GZERO Media ›
Emerging markets most vulnerable to recession and political discontent
Inflation shockwaves is Eurasia Group's top geopolitical risk No. 4 for 2023. But who is most vulnerable to the effects of rising interest rates and a looming global recession?
Emerging markets.
Why? For Rob Kahn, managing director for geo-economics at Eurasia Group, these countries are in deep trouble because they have higher debt and more subject to sudden stops of capital flows that'll make it harder for them to pay for stuff. Not to mention that the pandemic has killed any fiscal monetary policy space they had before COVID, Kahn noted in a GZERO Live conversation about Eurasia Group's Top Risks 2023 report.
Kahn also shares his thoughts on the implications of a global recession and the politics of central banks fighting it.
Read Eurasia Group's Top Risks 2023 report here.
Watch the full live conversation: Top Risks 2023: A rogue Russia and autocrats threatening the world
US House Minority Leader Rep. Kevin McCarthy (R-CA) attends a press conference in Washington, DC.
What We’re Watching: McCarthy in trouble, Lula 2.0, global recession fears
Dramatic US House speaker election
Who will replace Nancy Pelosi (D-CA) as the next speaker of the US House of Representatives? Good question. As members of the 118th Congress are scheduled to be sworn in on Tuesday, Rep. Kevin McCarthy (R-CA) is still short of the votes necessary to lead the chamber. Even after making a major concession to his GOP critics by allowing them to fire him at any time, a handful of far-right Republicans remain publicly opposed to his speakership. If McCarthy doesn't get at least 218 votes on the first ballot, the lawmakers will continue voting until someone gets a majority. Keep in mind that the speaker sets the legislative agenda and decides which bills make it to the floor, so whoever gets the gig will hold a lot of sway at a time when Republicans aim to use their slim House majority to investigate the Biden administration and stymie the White House on anything from funding the government to continuing US aid for Ukraine.
Lula takes over (again) in Brazil
Luiz Inácio "Lula" da Silva was sworn in on Sunday for a third term as Brazil’s president, a post he last held from 2003 to 2010. In his two inauguration speeches, the left-wing Lula vowed to unite Brazilians but also lashed out at his far-right predecessor, Jair Bolsonaro, promising to hold the previous administration to account for botching Brazil's pandemic response and to revoke Bolsonaro's loosening of gun restrictions. (The outgoing president skipped the ceremony to hang out with his buddy Donald Trump at the former US president's Mar-a-Lago estate in Florida.) So, what's next for Brazil under Lula 2.0? Although the new president begins his term in office with his approval rating in the high 50s, his honeymoon period will likely not last long. What's more, Brazilian politics remain deeply polarized, and high inflation + a weak economy means Lula will likely need to raise taxes in order to spend big on social programs for the poor.
IMF bearish on 2023 economic growth
The IMF has some bad news: A third of the world’s economies are heading into recession in 2023. This shouldn't come as a complete surprise. After all, when the IMF cut its economic outlook last fall, the war in Ukraine, inflation, rising interest rates, and zero-COVID in China were already peaking. Now, the message from IMF chief Kristalina Georgieva is clear: 2023 is going to be a “tough year.” While the world’s biggest economies will see a slowdown, even those economies not technically in recession will feel like they are. Why? The US, the EU, and China are slowing down — each in its unique way. While China rolls back its zero-COVID policies, it suffers through a surge of infections. Meanwhile, the EU remains most affected by the economic fallout of Russia’s war in Ukraine. What about America? According to the IMF, the US economy is teetering, but it’s still the most resilient and might just avoid recession.
Odds of a global recession? 50/50, says David Malpass
Global inflation is forecast to finish 2022 at 8.8%, settling in at around 6.5% in 2023. So is a global recession imminent? David Malpass, President of the World Bank, discusses the global economy with Ian Bremmer on the GZERO World.
Malpass places the odds of a global recession at 50/50. Efforts to combat inflation in the developed world could spur a debt crisis in the developing one, and optimism for a speedy post-pandemic recovery has faded as Putin’s war in Ukraine has strained the global supply chain. But the World Bank chief is most worried about the poorest countries going backwards on their development goals. He also discusses climate change and confirms that he is not a climate science denier.