Emerging Markets Daily - April 15
IMF To Downgrade Global Growth, Singapore PM-In-Waiting, The West and "The Rest" on Russia, Stan Chart Exits 7 MEA Countries, Italy Eyes More Algeria Gas
The Top 5 Stories Shaping Emerging Markets from Global Media - April 15
More Than 140 Countries Could Face IMF Forecast Downgrade Next Week
“In a speech ahead of spring meetings of the IMF and World Bank next week, Georgieva also warned that inflation, for the first time in many years, has become ‘a clear and present danger’ for many countries, constituting ‘a massive setback for the global recovery.’
Kyodo News
“More than 140 economies face downgrades of their economic outlooks this year due to the impact of Russia's invasion of Ukraine, which is pushing up energy and food prices around the world, International Monetary Fund chief Kristalina Georgieva said Thursday.”
“In a speech ahead of spring meetings of the IMF and World Bank next week, Georgieva also warned that inflation, for the first time in many years, has become ‘a clear and present danger’ for many countries, constituting ‘a massive setback for the global recovery.’”
“While most countries can expect their economic growth to remain in positive territory, the impact of the war will contribute to downward revisions in 2022 for 143 economies accounting for 86 percent of global gross domestic product, she said.”
“The IMF is set to release its flagship World Economic Outlook report on Tuesday, in which it is expected to slash expected global growth for both 2022 and 2023, she said.”
“It will be a further downgrade from January, when the IMF cut its global growth forecast for 2022 by 0.5 percentage point from its October estimate to 4.4 percent as coronavirus pandemic-linked supply disruptions and inflation weighed on the United States and China.” Kyodo News reports.
Singapore Finance Minister Set to Become City-State’s Leader
Financial Times
“Singapore’s finance minister Lawrence Wong has been made prime ministerial heir apparent, as the ruling People’s Action party seeks to recover public support and bolster the city-state’s status as an international financial hub.”
“Lee Hsien Loong, prime minister since 2004, announced on social media late on Thursday that ministers had backed Wong to be the leader of the ruling PAP’s ‘fourth generation team’ with ‘overwhelming support’. The fourth generation team is a group of younger ministers lined up to take the reins of the governing party, putting its leader on course to be the next prime minister.”
“Wong, 49, would be only the fourth leader of the quasi-authoritarian state in its 56-year history…Increasing tensions between China and the US have also raised questions about whether Singapore can retain close ties with both. Following the invasion of Ukraine, ministers made a rare break from tradition and condemned Russia while calling on Beijing to assert its influence on Moscow.”
“At a speech to Singapore business leaders last month, Wong signalled his desire to counter pushback against the PAP and increase Singapore’s strength as a financial centre. ‘Strong connectivity will enable us to be a choice destination for business, finance, trade and even data flows,’ he said. ‘But all the connections that we have . . . will not be sufficient if we are not connected in our hearts and minds. That’s why it’s also very, very important that we always retain the ethos and mindset in Singapore. To stay open, to welcome entrepreneurs, talent and investment from around the world.’” Oliver Telling reports.
Anti-Russia Alliance is Missing a Big Bloc: The Developing World
Wall Street Journal
“Western leaders seeking to build a global coalition to isolate Russia over its war on Ukraine are facing pushback from the world’s largest developing nations, including the democracies of India, Brazil and South Africa.”
“The resistance, much of it from economic self-interest, limits the pressure on President Vladimir Putin and spotlights factions in the global community that recall the Cold War, when many countries tried to steer clear of the rivalry between the U.S. and Soviet Union.”
“The U.S. and its allies in Europe and elsewhere have imposed economic sanctions against Russia and provided billions of dollars in military aid to Ukraine since the Feb. 24 invasion. The united front was praised for rejuvenating a flagging Western alliance.”
“Yet even after the massacre of civilians in Bucha, Ukraine, 24 countries of the 141 United Nations member states voted last week against removing Russia from the United Nations Human Rights Council; 58 member states abstained, including India, Brazil, Mexico, Indonesia and South Africa.”
“While U.S. and European leaders have accused Mr. Putin of war crimes in Ukraine, leaders in the developing world, from Mexico’s Andrés Manuel López Obrador to India’s Narendra Modi, have refused to criticize the Russian leader.”
“The bulk of the economic sanctions on Russia are being shouldered by members of the North Atlantic Treaty Organization and other close U.S. allies such as Australia, Japan and South Korea.” WSJ reports.
Standard Chartered Plans to Exit Seven Markets in Africa and Middle East, Will Grow Presence in Saudi Arabia and Egypt
Bloomberg
“Standard Chartered Plc is planning to exit its operations in seven countries in Africa and the Middle East as the lender looks to focus attention on the region’s largest and fastest growing markets including Saudi Arabia and Egypt.”
“The lender said in a statement Thursday that it will no longer have a presence in Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe. It will also exit consumer, private and business banking businesses in Tanzania and the Ivory Coast to focus solely on corporate, commercial and institutional banking there.”
“The markets it plans to exit made up about 1% of total group income in 2021 and a similar proportion of profit before tax, according to the statement. The lender said it remained committed to the region and has recently opened its first branch in Saudi Arabia and obtained preliminary approval for a banking license in the Arab Republic of Egypt.” Bloomberg reports.
In Bid to Reduce Russian Supply, Italy Signs Up For More Gas from Algeria
Africa News
“Italian Premier Mario Draghi has secured a deal for more natural gas imports across a Mediterranean pipeline from Algeria. It's the latest push by a European Union nation to reduce dependence on Russian energy following its invasion of Ukraine.”
“Russia is Italy's biggest supplier of natural gas, representing 40 per cent of total imports, followed by Algeria, which provides some 21 billion cubic meters of gas via the Trans-Mediterranean pipeline.”
“…Italian energy giant ENI's chief executive Claudio Descalzi visited Algeria in February with Italy's foreign minister in a bid to increase supplies from the North African country.”
“Algerian state hydrocarbons firm Sonatrach said at the time it was ready to increase gas supplies to Europe, notably via the Transmed pipeline linking Algeria to Italy.” Its CEO Toufik Hakkar said Europe is the ‘natural market of choice’ for Algerian gas, which accounts for about 11 per cent of Europe's gas imports.”
“The new deal between ENI and Sonatrach would add up to 9 billion cubic meters of gas from Algeria, just eclipsing Russia's current 29 billion cubic meters a year. The increased flows will start in the fall, ENI said in a statement.” Africa News reports.
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