Shocks in G20 Emerging Economies Hit Rich-World Growth, IMF Says

A view of an advertising billboard for the upcoming annual meetings of the International Monetary Fund and the World Bank, in Marrakech, following last month's deadly earthquake, Morocco October 1, 2023. REUTERS
A view of an advertising billboard for the upcoming annual meetings of the International Monetary Fund and the World Bank, in Marrakech, following last month's deadly earthquake, Morocco October 1, 2023. REUTERS
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Shocks in G20 Emerging Economies Hit Rich-World Growth, IMF Says

A view of an advertising billboard for the upcoming annual meetings of the International Monetary Fund and the World Bank, in Marrakech, following last month's deadly earthquake, Morocco October 1, 2023. REUTERS
A view of an advertising billboard for the upcoming annual meetings of the International Monetary Fund and the World Bank, in Marrakech, following last month's deadly earthquake, Morocco October 1, 2023. REUTERS

Domestic shocks in emerging economies in the Group of Twenty (G20) are increasingly impacting growth in the rich world, said a report released by the International Monetary Fund ahead of its next week's Spring Meetings in Washington.
The Spring Meetings, to convene from April 17 to 19, DC, bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.
IMF Managing Director Kristalina Georgieva will kickstart the meetings, presenting the outlook for the global economy and policy priorities.
Saudi Arabia's minister of finance, Mohammed Al-Jadaan, will chair the International Monetary and Financial Committee meeting. Al-Jadaan was chosen as Chair of the Committee for a term of three years, effective January 4, 2024.
The Committee deliberates on the principal policy issues facing the IMF. It normally meets twice a year—in the spring and during the IMF/World Bank Annual Meetings in the fall.
“Since 2000, spillovers from domestic shocks in G20 emerging markets — particularly China — have increased and are now comparable in size to those from shocks in advanced economies,” the IMF wrote in a chapter of its World Economic Outlook report.
Those countries -- ranging from China, the world's second-largest economy, to default-prone Argentina -- have become so embedded in the global economy, particularly via trade and commodity value chains, that they are “no longer simply on the receiving end of global shocks,” it added.
The IMF also showed that since China’s accession to the World Trade Organization in December 2001, emerging markets of the G20 now account for about 30 percent of global economic activity and about one quarter of global trade.
At the same time, these economies have become increasingly systemic through their integration into global value chains (GVCs), with the potential to move global markets, it showed.
“This implies that spillovers to growth from shocks originating in these economies—as well as from their structural slowdown over the past decade—can have far greater ramifications for global activity,” the report added.
It said the intertwined nature of economies underscores the risks to the rich world of shocks in faraway nations but also the boost they could get if the economies strengthen again.
The ten emerging economies in the G20 - Argentina, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Türkiye- have more than doubled their combined share of global GDP since 2000.
“Not only has this helped provide global momentum for growth and trade, it has also been a force for lower output volatility—thanks to cross-country diversification,” the IMF report said.
Earlier, the Fund’s data showed Saudi Arabia's GDP grew from $189.5 billion in 2000 to $1.1 trillion in 2023.
However, fading growth prospects for G20 EMs have driven more than half of the 1.9 percentage point slowdown in medium-term global growth since the global financial crisis, with China accounting for about 40 percent.
The medium-term growth outlook for G20 EMs has weakened by 0.8 percentage point to 3.7 percent as a result of scars from the pandemic and the price shocks that followed the Russian invasion of Ukraine.
Overall, spillovers have increased almost threefold since the early 2000s, led by China, while spillover risks from Brazil, India and Mexico have also grown moderately.
China is struggling to overcome prolonged economic headwinds, with high levels of local government debt limiting infrastructure investment and the property market entering its fourth year of free fall. Consumer and investor confidence are also under pressure.
The IMF said the Russian economy's pivot toward Asia will likely shift the direction of spillover effects.
Across the G20 emerging markets, the IMF warned that average growth of 6% per year over the past 20 years would slow and lowered the medium-term growth outlook to 3.7%.
Global Economic Growth
The IMF said global economic growth will reach just 2.8% by 2030, a full percentage point below the historical average, unless major reforms are made to boost productivity and leverage technologies such as artificial intelligence.
“Without ambitious steps to enhance productivity, global growth is set to fall far below its historical average,” the IMF said in a chapter of its forthcoming World Economic Outlook, warning that expectations of weak growth could discourage investment, possibly deepening the slowdown.
The global lender said the persistent low-growth scenario, combined with high interest rates, could also restrict governments' ability to counter economic slowdowns and invest in social welfare or environmental initiatives.
“All this is exacerbated by strong headwinds from geoeconomic fragmentation, and harmful unilateral trade and industrial policies,” it said in a blog accompanying Chapter 3 of the WEO, to be released in full next Tuesday.
A year ago, the IMF said it expected medium-term growth to hover around 3%. The new forecast reflects downward revisions for medium-term growth across all income groups and regions, most significantly in emerging market economies.
The IMF urged countries to take urgent action to counter the weakening growth outlook, warning that it worsened prospects for living standards and global poverty reduction.
“An entrenched low-growth environment, coupled with high interest rates, would threaten debt sustainability and could fuel social tension and hinder the green transition,” it said.



Saudi's flynas Strikes Deal for Additional Airbus A320neos, 15 A330s

Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
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Saudi's flynas Strikes Deal for Additional Airbus A320neos, 15 A330s

Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)

flynas, Saudi Arabia’s leading low-cost carrier, has signed a Memorandum of Understanding (MoU) with Airbus for 75 A320neo family aircraft and 15 A330-900. This strategic agreement will expand the airline's capacity, range and enhance its overall fleet capabilities.
Signed during Farnborough International Airshow in the presence of President of the General Authority of Civil Aviation (GACA) of Saudi Arabia, Abdulaziz bin Abdullah Al-Duailej, Chairman of the Board of NAS Holding Ayed Al Jeaid, flynas Chief Executive Officer & Managing Director Bandar Almohanna, and Airbus Chief Executive Officer, Commercial Aircraft, Christian Scherer, Airbus said on its website.
The new aircraft will join the carrier’s all Airbus fleet serving international, domestic and regional routes. The new A330-900 aircraft will boast a two-class configuration, accommodating up to 400 passengers.
"We are excited to further strengthen our long-standing partnership with Airbus," said Bander Almohanna, CEO and Managing Director of flynas. "The A320neo Family provides exceptional operational performance and environmental benefits, allowing us to offer unique, low-cost travel experiences. Additionally, the A330neowill enhance our long-haul capabilities with its advanced technology and efficiency while supporting our growth plans and Saudi Arabia’s pilgrim program."
Airbus Chief Executive Officer, Commercial Aircraft, Christian Scherer said, "We are delighted to expand our partnership with flynas through this significant milestone for both A320neo and A330-900 aircraft. The A330neo will allow flynas to further grow into widebody markets by building on the A320, benefiting from Airbus’ unique commonality. Both aircraft types offer flynas the perfect versatility and economics to expand into new markets while offering their passengers the latest cabin experience and comfort. We look forward to continuing our successful collaboration with flynas as they embark on this exciting new chapter."
The addition of the A330-900 aircraft will support flynas' ambitious growth plans. The airline anticipates significant operational efficiency gains by combining the new widebody aircraft with its existing A320neo fleet. The A330-900 offers increased capacity and range at unrivaled seat costs, ensuring flynas can compete effectively in the growing regional market, a key focus area for the airline.
The A330neo delivers unbeatable operating economics, powered by the latest-generation Rolls-Royce Trent 7000 engines, featuring new wings and a range of aerodynamic innovations resulting in a 25 percent reduction in fuel consumption and CO₂ emissions compared to previous generation competitor aircraft. The A330neo is capable of flying 8,150 nm / 15,094 km non-stop, providing ultimate comfort with more passenger space, a new lighting system, latest in-flight entertainment systems and full connectivity throughout the cabin.
As with all Airbus aircraft, the A330 family is already able to operate with up to 50% Sustainable Aviation Fuel (SAF). The manufacturer is targeting to have its aircraft up to 100% SAF capable by 2030.