In a recent report, the International Monetary Fund’s World Economic Outlook said global growth was expected to remain stable yet underwhelming, and near-term policy priorities should be calibrated to ensure a smooth landing.
At 3.2% in 2024 and 2025, the IMF’s growth projection was nearly the same as those in the July and April updates. However, notable revisions have taken place beneath the surface, with upgrades to the forecast for the US offsetting downgrades to those for other advanced economies—in particular, the largest European countries.
Likewise, in emerging market and developing economies, disruptions to production and shipping of commodities (especially oil) conflicts, civil unrest and extreme weather events led to downward revisions to the outlooks for the Middle East and Central Asia and for sub-Saharan Africa.
Those were compensated for by upgrades to the forecast for emerging Asia, where surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence, has bolstered growth.
The latest forecast for global growth in five years, at 3.1%, remained mediocre compared with the pre-pandemic average.
Persistent structural headwinds like population aging and weak productivity were said to be restraining potential growth in many economies.
CYCLICAL IMBALANCES EASING
Cyclical imbalances eased since the beginning of the year, leading to a better alignment of economic activity with potential output in major economies. This adjustment was bringing international inflation rates closer together and contributed to lower global inflation.
Global inflation was expected to fall from an annual average of 6.7% in 2023 to 5.8% in 2024 and 4.3% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies.
Goods prices have stabilized, but services price inflation remains elevated in many regions.
RISKS AHEAD
Risks to the global outlook were thought tilted to the downside amid elevated policy uncertainty. Sudden eruptions in financial market volatility could weigh on investment and growth, especially in developing economies in which large near-term external financing needs may trigger capital outflows and debt distress.
Further disruptions to the disinflation process could prevent central banks from easing monetary policy, which would pose significant challenges to fiscal policy and financial stability. Deeper or longer-than-expected contraction in China’s property sector, especially if it leads to financial instability, could weaken consumer sentiment and generate negative global spillovers.
An intensification of protectionist policies would exacerbate trade tensions, reduce market efficiency and further disrupt supply chains. Rising social tensions could prompt social unrest, hurting consumer and investor confidence and potentially delay the passage and implementation of necessary structural reforms.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.95 per cwt to $188.82, compared with last week’s range of $187.00 to $189.35 per cwt. FOB dressed steers, and heifers went for $293.66 per cwt to $295.82, compared with $292.16 to $298.16.
The USDA choice cutout Tuesday was up $1.10 per cwt at $323.96 while select was down $1.41 at $294.80. The choice/select spread widened to $29.16 from $26.65 with 124 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $351.19 per cwt, and 50% beef was $63.10.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.40 a bushel over the Dec corn contract and in Kansas at $0.25 over Dec, which settled at $4.16 1/2 a bushel, up $0.07.
Six steer contracts were tendered for delivery Tuesday against the Oct contract.
The CME Feeder Cattle Index for the seven days ended Monday was $250.65 per cwt, up $0.39. This compares with Tuesday’s Oct contract settlement of $249.42, up $1.85.