Global Economic Outlook

Access expert analyses and forecasts about the worldwide economic trajectory, helping you make informed decisions in a rapidly changing financial environment.

Is the US Dollar Losing Its Global Grip? Central Banks Are Gradually Moving Away
Global Economic Outlook

Is the US Dollar Losing Its Global Grip? Central Banks Are Gradually Moving Away

The US dollar has long been considered the cornerstone of global forex reserves, but recent trends indicate a subtle yet significant shift. According to the International Monetary Fund (IMF), the dollar's share in these reserves has fallen from over 70% in 2000 to about 55% by the last quarter of 2023. This reduction, described as "stealth erosion" by the IMF, marks a notable change in the global financial landscape. While the dollar remains the predominant currency in the reserves of the world's central banks, its dominance is gradually being challenged. Non-traditional reserve currencies, such as the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singaporean dollar, and various Nordic currencies, are gaining traction. According to the IMF data, this shift is ...
Golden Break: Why China’s Central Bank Stopped Buying Gold
Global Economic Outlook

Golden Break: Why China’s Central Bank Stopped Buying Gold

In an unexpected move, China's central bank has paused its gold buying spree, halting an 18-month purchasing streak. This decision comes after gold prices surged to record highs earlier this year, driven by global geopolitical tensions and economic uncertainties. For the first time in over a year and a half, China's gold holdings remained unchanged in May, signaling a break from their aggressive acquisition strategy. The People's Bank of China (PBOC) has been a major player in the gold market, significantly influencing prices. However, with gold reaching such high prices, even the PBOC has decided to take a step back. On Friday, official data confirmed that China's gold reserves did not increase in May, marking the end of their continuous purchasing period. This pause could put down...
Sberbank CEO Warns of Overheated Russian Economy as War Continues
Global Economic Outlook

Sberbank CEO Warns of Overheated Russian Economy as War Continues

Russia's economy is "definitely and strongly overheated," according to Herman Gref, the CEO of Sberbank, Russia's largest bank by assets value. According to TASS news report, Gref made these remarks while speaking in parliament, highlighting that the current production capacity has reached a historically high level of 84%. He emphasized that it is "impossible" to exceed this production capacity and produce more, signaling significant strain on the economy. Despite the West's sweeping sanctions, Russia's economy has shown a remarkable resilience, with a reported GDP growth of 3.6%. However, this apparent robustness is primarily driven by wartime activities, which generate demand for military goods and services, along with subsidies and sharp policy-making strategies. These factors creat...
China’s Push to Globalize the Yuan: A Shield Against Potential Sanctions
Global Economic Outlook

China’s Push to Globalize the Yuan: A Shield Against Potential Sanctions

In a rapidly changing geopolitical landscape, China is accelerating efforts to promote the use of the yuan globally. The driving force behind this initiative is not to challenge the dominance of the US dollar outright, but to safeguard against the potential impact of Western sanctions, particularly in the event of geopolitical conflicts such as those surrounding Taiwan. Zoe Liu, a fellow for China Studies at the Council on Foreign Relations, emphasized this perspective in a recent article published on the Official Monetary and Financial Institutions Forum (OMFIF) website. Liu contends that China's strategies to develop an alternative financial system are currently defensive rather than offensive. “China's strategies to develop an alternative financial system are defensive rather than o...
Gold Prices Surge as Central Banks Diversify Away from US Dollar
Global Economic Outlook

Gold Prices Surge as Central Banks Diversify Away from US Dollar

The prices of gold are heading toward their historical highest record, fuelled by huge purchases from central banks around the world. In fact, a lot of central banks are in a race to transfer their assets from the US dollar into gold, especially those countries which are already playing buddy-buddy with China. They see it as a politically neutral and secure asset — invulnerable to sanctions. Gold prices have rallied in the last couple of weeks on heightened buying by central banks, with the rise showing an expanding use of gold as a safeguard in global politics. The importance of the Gold at the moment, globally, was explained by Gita Gopinath, the deputy managing director of the International Monetary Fund, in her address last week. "After several shocks of a COVID-19 nature and no...
Russia’s War Economy: Putin Positions Economist as New Defense Minister
Global Economic Outlook

Russia’s War Economy: Putin Positions Economist as New Defense Minister

Russian President Vladimir Putin has caught everyone by surprise with the appointment of a civilian economist, Andrei Belousov, to the post of defense minister. It comes in the first week of Putin's next six years as president following his inauguration last Tuesday. Belousov, 65 years old, has also earlier taken the position of deputy prime minister and is being appointed to replace Sergei Shoigu, Putin's old ally. The Russian parliament remains yet to clear these appointments, but this is just a formality as the parliament will smoothly pass all the proposed amendments as Putin has a tight noose around the government. The spokesman for the Kremlin, Dmitry Peskov, spoke of innovation as a key part of modern military strategies and said that Belousov's education as an economist ...
New York City Has Become The Millionaires’ Hub
Global Economic Outlook

New York City Has Become The Millionaires’ Hub

New York City has reached a milestone as it now holds the title of having the higher number of millionaires, in the world. A recent report from Henley & Partners a firm specializing in immigration services reveals that the Big Apple is currently accommodating 349,500 millionaires making it a top global destination for individuals surpassing prominent cities. The notable increase in New Yorks millionaire population signifies a 48% surge over the decade. This growth is primarily attributed to the performance of markets as highlighted by Henley & Partners. Despite some individuals relocating elsewhere due to the pandemic many more have opted to make New York their residence contributing to its flourishing community of millionaires. New York City is home to a total of 8.2 millio...
Chinese Leader Xi Jinping Visits France Amid EU Tensions and Upcoming Elections
Global Economic Outlook

Chinese Leader Xi Jinping Visits France Amid EU Tensions and Upcoming Elections

NChinese President Xi Jinping has landed in France, marking the beginning of his European Union tour, a trip that comes at a critical time as the EU gears up for significant elections. Over the next few days, Xi is set to meet with French President Emmanuel Macron and other European leaders, aiming to smooth over some of the rough patches that have recently emerged in China-EU relations. During his two-day stay in France, Xi Jinping's agenda is packed. As reported by Bloomberg via French news outlet La Tribune Dimanche, Macron is eager to discuss several key issues, including trade imbalances and environmental concerns. Macron emphasized the need for an 'update' in the France-China relationship, highlighting that China's massive exports to Europe need addressing, especially in the gree...
Shift in U.S. Job Creation: A Move from Coastal Cities to Sunbelt and Midwest
Global Economic Outlook

Shift in U.S. Job Creation: A Move from Coastal Cities to Sunbelt and Midwest

In a significant shift in the American job market, new employment opportunities are increasingly found not in the traditional economic hubs of the coasts but in the Sunbelt and Midwest regions. This change, outlined in a recent analysis by the Economic Innovation Group (EIG), highlights how skyrocketing housing costs in cities like San Francisco, New York, and Boston are driving jobs to areas with more affordable living costs. According to the EIG report, cities such as Gainesville, Georgia, and Hilton Head Island, South Carolina, are now leading in job creation, overtaking the historically dominant coastal metropolises. This marks a stark departure from past trends where cities like Los Angeles and Seattle saw rapid job growth. Now, places in the Midwest and inland cities of the North...
Hard at Work or Hardly Working? Norges Bank CEO Weighs in on U.S. vs. Europe Hustle
Global Economic Outlook

Hard at Work or Hardly Working? Norges Bank CEO Weighs in on U.S. vs. Europe Hustle

Nicolai Tangen, the big boss at Norges Bank, spilled some tea to the Financial Times about how he thinks Americans hustle way more than Europeans. He's got a big say in where Norway’s gigantic $1.6 trillion oil fund throws its cash, and right now, half of it is riding on U.S. stocks. Tangen was straight-up about the differences in work vibes between the two continents. Over in the U.S., if you tank, you dust yourself off and dive back in. In Europe, not so much — one big flop and it feels like game over. He said this chill attitude might be why Europeans aren’t as driven. “We are not very ambitious,” he admitted, adding a cautious note on the whole work-life balance thing, hinting that maybe Americans are onto something with their all-out approach. The Norges Bank honcho was talking...