Global Markets: IMF forecast shows diverging trends

WINNIPEG – The following is a glance at the news moving markets in Canada and globally.

– The International Monetary Fund (IMF) maintained its forecast for six per cent global growth for 2021 on Tuesday, upgrading its forecast for wealthy economies and downgrading it for developing nations. The IMF projected the United States to increase its GDP by seven per cent in 2021 and 4.9 per cent in 2022, up 0.6 and 1.4 percentage points since April. However, the IMF lowered its projections for India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, all of whom had struggled with COVID-19 outbreaks.

– Arabica coffee prices spiked 10 per cent on Monday to their highest levels in seven years, following a 20 per cent surge last week, due to unusual cold threatening the Brazilian coffee harvest. Frosts have damaged cocoa bean fields and a third strong frost will hit later this week. The Brazilian government’s food agency CONAB said that 370,000 to 500,000 acres, at least 11 per cent of the country’s beans have been affected.

– Both North and South Korea have exchanged messages through liaison officials for the first time in over a year on Tuesday, agreeing to improve ties between the two nations but falling short of any progress to denuclearize the North. Some experts believe North Korea is contacting the South to put itself in a better position to persuade the U.S. to relax sanctions. It was also announced that North Korean leader Kim Jong Un and South Korean leader Moon Jae-in have communicated through letters since April.

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