Everything you need to know about the IMF’s latest World Economic Outlook update

IMF holds global growth forecast steady: The International Monetary Fund maintained its 2024 global growth outlook at 3.2% in its updated World Economic Outlook (pdf) and slightly upgraded its 2025 outlook to 3.3% — even as it downgraded its outlook for Saudi Arabia, as we note in this morning’s news well, above.

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Where do major economies stand? Both the US and Japan saw their outlook slashed — the US saw its 2024 forecast trimmed 0.1 percentage points to 2.6% thanks to “a sharper-than-expected slowdown in growth reflected moderating consumption and a negative contribution from net trade.” The Fund sees the Japanese economy growing at a 0.7% clip this year, down 0.2 percentage points from April’s forecast due to “temporary supply disruptions linked to the shutdown of a major automobile plant in the first quarter.”

It’s a different story for the Eurozone, which saw its 2024 growth revised upwards 0.1 percentage points to 0.9%, mainly driven by a more optimistic growth outlook for France and Spain.

Also revised upwards, was growth in India and China — which accounted for close to half of global growth. The Fund sees the Chinese economy growing 5.0% in 2024 — a 0.4 percentage points upgrade from its April forecast — and India growing 7.0% after a 0.2 percentage points upwards revision,

Words of wisdom for EMs: “In emerging markets and developing economies, recent policy divergences highlight the need to manage the risks of currency and capital flow volatility. Given that economic fundamentals remain the main factor in USD appreciation, the appropriate response is to allow the exchange rate to adjust, while using monetary policy to keep inflation close to target.”

The inflation outlook: “We project global inflation will slow to 5.9% this year from 6.7% last year, broadly on track for a soft landing. But in some advanced economies, especially the United States, progress on disinflation has slowed, and risks are to the upside,” IMF chief economist Pierre-Olivier Gourinchas said in a blogpost.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning, with the ASX 200 up, the Nikkei and Hang Seng flat, and both the Kospi and Shanghai Composite in the red. Futures for major US and European equities benchmarks were largely unchanged overnight.

THE CLOSING BELL: TADAWUL-

The TASI rose 1.1% yesterday on turnover of SAR 7.3 bn. The index is up 0.9% YTD.

In the green: Ayyan (+10.0%), AlSagr Ins. (+10.0%) and Miahona (+7.7%).

In the red: Al Baha (-7.7%), East Pipes (-2.8%) and AlKhaleej Trng (-1.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 30.3 mn. The index is up 5.7% YTD.

In the green: Mayar (+19.7%), Armah (+7.9%) and Naba AlSaha (+6.6%).

In the red: NBM (-9.2%), Edarat (-3,5%) and Molan (-3.4%)

CORPORATE ACTIONS-

Rump shares from Al Sagr Cooperative Ins.’s rights issue will be offered to institutional investors at the minimum price set for the offering, the company said in a filing to Tadawul. The allocation period starts today and is set to run until tomorrow. This comes after the company’s rights issue for a capital hike wrapped up on Sunday and was 89.8% subscribed.

BACKGROUND- Shareholders of Al Sagr Cooperative Ins. approved last month the board’s recommendation to more than double its capital to SAR 300 mn through a rights issuance. Proceeds will allow Al Sagr to meet minimum capital requirements for ins. Companies.