The guardians of the world economy head to Washington this week under the cloud of a slowing world economy.
The annual meetings of the International Monetary Fund and World Bank kick off with the new leaders of both expressing concern over the outlook. IMF Managing Director Kristalina Georgieva is already hinting her economists will on Tuesday cut their projections for global growth from 3.2% this year and 3.5% next year.
That will be the fourth downgrade since last October and reflects what Georgieva last week called a “synchronized slowdown” in which 90% of the world is experiencing weakening demand.
The question for central bankers and finance ministers is what can they do to prop up their economies. Much will depend on the path of the trade talks between the U.S. and China, which on Friday ended in a partial agreement. That doesn’t mean, though, that a curtain is being drawn on the uncertainty President Donald Trump’s trade wars have brought to the global economy.
Here’s what happened last week and below is our weekly wrap of what’s going on in the world economy this week.
U.S.
Federal Reserve Chair Jerome Powell is not scheduled to appear in public this week, meaning investors will have to wait for any signs from the very top of the central banks as to whether it’s will cut interest rates this month for a third time this year. Several regional Fed presidents will though take to the microphone. Atlanta’s Raphael Bostic, Kansas City’s Esther George, James Bullard of St. Louis and Mary Daly of San Francisco all talk Tuesday. Chicago’s Charlie Evans and John Williams of New York follow Wednesday. Robert Kaplan of Dallas, Vice Chairman Rich Clarida and Neel Kashkari of Minneapolis speak Friday.
The Fed’s Beige Book comes out on Wednesday giving a snapshot of economic conditions across the nation. That is published hours after retail sales data for September with economists predicting another month of modest growth. Industrial production may have contracted the same month, underscoring recession fears, a report is forecast to show on Thursday.
Europe, Middle East and Africa
Industrial production for the euro area will be released on Monday, giving another indication of how the German slowdown has marred overall growth. Meanwhile, multiple European Central Bank officials may use the IMF meetings to extend the recent spat over stimulus. In the U.K., labor market, inflation and retail sales data will illustrate the economic backdrop during a crunch political week as another Brexit deadline looms and an extension or deal remains clouded in doubt.