FirstFT: War and stagflation threaten global economy as Covid recovery slows


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The twin jeopardy of slowing growth and high inflation, or stagflation, will hit the global economy this year as Russia’s war on Ukraine exacerbates a slowing recovery from the coronavirus pandemic, according to research by the Financial Times.

According to the latest Brookings-FT tracking index, mounting price pressures, slowing production expansion and weakening confidence will act as a drag for most countries.

As a result, policymakers will be left with “grim dilemmas,” said Eswar Prasad, senior fellow at the Brookings Institution.

The IMF is expected to lower its forecasts for most countries this week as finance ministers and central bankers meet at the fund’s and World Bank’s spring meetings to discuss how to respond to the crisis. darkening economic outlook.

Policymakers must determine how to deal with rapidly rising prices and the dangers of rising interest rates when debt levels are already high.

Kristalina Georgieva, managing director of the IMF, on Thursday called the war in Ukraine a “massive setback” for the global economy.

Thanks for reading FirstFT Asia. Here is the rest of the news of the day — Sophia

The latest news from the war in Ukraine

  • Military briefing: The Russian Defense Ministry demanded the surrender of Ukrainian troops remaining in Mariupol, who used the city’s network of tunnels to their advantage.

  • NATO: Lithuanian President Gitanas Nauseda is urging Sweden and Finland to join NATO, arguing it would strengthen the security of the Baltic states and strengthen the Western military alliance.

  • Shipping and logistics: Russian trucks are stuck in long queues at the EU’s eastern borders following a ban on their vehicles which came into force on Saturday.

  • Wall Street: The number of failed trades in the US corporate bond market rose after Russia invaded Ukraine, as investors linked settlement problems to sanctions imposed after the war began.

  • Finance: Last week, US banks detailed billions of dollars in potential war losses while warning they saw no end in sight for the market turmoil.

  • Punishments: The United States has a “long playbook” of planned new sanctions against Russia, a senior State Department official said.

  • Heritage: Ukraine is fighting to protect its churches, historic sites and national monuments from the ravages of war.

  • Opinion: Vladimir Putin once presided over a period of rapid economic growth, but as Russia’s economy stagnated, his regime has now reverted to a 20th century dictatorship based on fear.

Summary of coronavirus

  • South Korea lifts restrictions: Starting today, the midnight curfew as well as restrictions on private gatherings and large-scale events will be lifted in South Korea. The country has downgraded Covid-19 to a “Class 2” disease.

  • Explanation: With lockdown in Shanghai and more Asian central banks struggling with inflation, policymakers in the region are nervously watching slowing economic growth in China.

  • The impact of Omicron: The way China reports infections and deaths masks the true impact of the Omicron wave and complicates its public health response.

1. How Journalists Funded Their Coverage of the War Crowdfunding platform Patreon is home to over 3,000 backers in Ukraine. Now the company, which was founded with artists and musicians in mind, could play an instrumental role in supporting independent journalism.

Under editor Olga Rudenko, The Kyiv Independent earns over £50,000 a month from almost 7,000 customers, making it one of the largest Patreon sites in Ukraine.

Led by editor Olga Rudenko, the kyiv-based independent English-language publication earns over £50,000 a month from almost 7,000 customers, making it one of the largest Patreon sites in Ukraine.

2. China sees the Russian invasion as a “strategic utility” The country hopes to exploit a distracted West to focus on its competition with the United States, and will welcome a protracted war in Ukraine as a “continuing strategic diversion” of its own assertion, according to former Australian Prime Minister Kevin Rudd.

3. Soaring Inflation Reduces $11 Billion in Negative-Yielding Global Debt Bond prices have fallen this year as central banks decide to end large-scale asset purchases and raise interest rates in their fight against soaring inflation. The shift is set to end the era of negative yielding debt – and the complete elimination of negative yields would mark a return to normalcy for a wide range of mainstream investors.

4. Shanghai residents clash with police Small protests have erupted in Shanghai as residents grow increasingly frustrated with Covid lockdown restrictions. Videos of desperate residents physically restrained by police in white personal protective equipment following a street confrontation were quickly deleted from Chinese social media.

5. TikTok under US government investigation The US Department of Homeland Security is investigating how TikTok handles child sexual abuse material, according to two sources familiar with the matter. The Justice Department is also investigating how a specific privacy feature on the Chinese-owned social media app is being exploited by predators.

The day ahead

Chinese economy The country’s National Bureau of Statistics releases its estimates for first-quarter gross domestic product growth.

Bank of America The global financial services company will also release its first quarter results today.

Boston Marathon The oldest annual marathon in the world takes place in Boston, Massachusetts, for the 126th time.

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What else we read

Is the world really united against Russia? Initial euphoria over the West’s response to the war in Ukraine has faded, as even optimists are aware that unity could be fragile. Add to that the indifference of the countries of the South – such as India, South Africa and Brazil – and Moscow’s narrative of Western hypocrisy, and the initial impression that the whole world had united in the outrage against Russia was clearly misleading.

Rude awakening for Elon Musk The world’s richest man has cast himself as the savior of Twitter, saying he will bring free speech back to the social media platform with his hostile $43 billion takeover bid. But his speech fell largely on deaf ears, as skeptics doubted the seriousness of Musk’s follow-up.

The ‘grey resignation’ is a problem Nearly 70% of the 5 million people who left their jobs in the United States during the pandemic were over the age of 55. It may be a welcome development for young people, but it has left an already tight job market with an even lower supply of experienced workers. .

Japan’s “new capitalism” is fashionable thought without bite According to leaks, the government is discussing changes to relieve listed companies of the burden of quarterly reporting. The true extent of any change, however, is hazy – the real purpose of the leaks was to position new Prime Minister Fumio Kishida against villainous “short-termism”, writes Leo Lewis.

The best business books for April If you’re looking for a bit of reading this Easter weekend, our Work & Careers team has picked out their favorite business books published this month. They include advice from entrepreneurs and a study on how flexible working can improve our lives and our cities.


Feeling inspired by the changing seasons to try your hand at growing vegetables? Two new books, by Cinead McTernan and Mark Ridsdill Smith, aim to guide city dwellers through the unique challenges presented by growing crops amidst concrete in small yards or on balconies.

Mark Ridsdill Smith in the balcony garden of his London apartment

Mark Ridsdill Smith in the balcony garden of his London apartment © Sarah Cuttle

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