The Day at a Glance | April 19 2022

The Top

*The World Bank revised its global growth estimates downwards for 2022 (3.2% vs 4.1% prev.).

*Mexico´s economy grew at a 0.4% annual rate in March, according to the INEGI´s Timely Indicator of Economic Activity.

*I wouldn’t discard a 75bp interest rate increase in May, even though that´s not the base scenario: James Bullard, St. Louis FED.

*Russia starts a new military offensive in eastern and southern Ukraine.

*Japanese Yen depreciates to its lowest level against the dollar in 20 years.

*Mexican deputies approve changes to the Law on Mining for lithium to be declared a national asset and can only be exploited by state companies; it will be passed onto the Senate.

Economic environment

The World Bank cut its growth estimates. In a report made public yesterday, the World Bank decided to cut its global growth estimates to 3.2% for 2022 – figure below the 4.1% forecasted in January. The figure was cut because of the conflict between Russia and Ukraine, with most of the downwards revisions being done in the European and Central Asia regions, the ones most affected by the conflict. The World Bank´s chief economist, Carmen Reinhart, assured that the world is going through a time of exceptional uncertainty and that further downwards revisions to global growth cannot be discarded. For Reinhart, the risks are still skewed downwards due to the conflict in Ukraine and the recent quarantine measures implemented in China. The World Bank also warned of possible debt crises in low and medium income countries, with close to 35 billion dollars in maturities this year. Additionally, the World Bank has called for efforts to restructure said debt as it calculates that close to 60% of low income countries are under financial stress, which increases the risks of non-payment. It also announced that it plans to discuss a new aid package worth 170 billion dollars to aid countries fighting the COVID-19 crisis, which has not passed. This morning, the IMF will make its own updated growth estimates known.