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Industry Updates 6
January: The global economy enters 2022 amidst a new Covid variant, Omicron, rising cases and lockdowns, increasing inflation and a worsening supply chain. Global growth expected in 2022 is 4.4% as compared to 5.9% in 2021.
March: Evergrande delays its results for FY’21 citing auditing issues. Approximate $2billion worth of their assets are seized by banks while Sunac, China’s 3rd biggest property developer, has its liquidity position revised to ‘weak’ by rating agencies. The exposure of Western Markets to Evergrande is significant through ownership of corporate bonds.
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The economic crisis worsened with power cuts up to 14 hours a day and severe medicine shortage.
July: Best month for Cryptocurrency as Bitcoin rose 25 percent and Ethereum rose close to 55 percent. This coincides with a less investigation from the Fed and interestingly, Tesla announcing that they will slash their Bitcoin holding by 75%. February: War increases uncertainty as the Russian occupation of Ukrainian cities causes a rise in food and fuel prices. Global wheat prices soar as exports from Russia and Ukraine, two of the world’s largest suppliers, are halted owing to the war.
April: Randstad, a global employment service provider, says the Great Resignation is likely to persist as fewer people in the job market give people more options and the chance to go where their needs are met. This is in direct response to economies making work from home more normal than ever.
The economic cri
May: The newly appointed PM Ranil Wickremesinghe says that Sri Lanka has run out of dollar reserves and even finding a million dollars will be difficult. June: Russia defaults on its foreign currency sovereign debt for the first time in a century, owing to tough Western sanctions that shut down payment routes to overseas creditors. They were unable to pay about
September: The Federal Reserve raises the Federal Funds Rate by 75 basis points to range from 3 – 3.25% to control inflation. This has happened for the third consecutive time in 2022 and the Fed’s monetary tightening stance is expected to continue into 2023.
“Several years of above average inflation and below average growth now seem likely’’ - David Malpass, World Bank Grp. President $100 million of interest payments despite a month-long grace period.
August: Recession fears in Europe worsen with Germany, France, Italy and Spain having their growth forecasts downgraded by IMF. Inflation above 10% in the UK only adds to these fears as energy crisis due to Russia-Ukraine war has drastic effects.
Inflation in Emerging Markets
Inflation in %
10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0
8.7
4.4 4.9 5.1 5.2 5.9 6.5
5.0
4.5 4.2 4.1