International News 02/02
It is predicted that China's economy will not surpass that of the United States until 2080.
According to an analysis by a leading investment bank, it is uncertain whether China will surpass the US to become the world's largest economy. Nathan Sheets, chief global economist at Citi and former US Treasury official, stated that China's economy has shrunk compared to the US economy. Currently, China's economy represents 65% of America's GDP, down from 75% in 2021. Several factors that contributed to China's economic rise are now fading. For example, the benefits of urbanization and debt-fuelled construction growth. Additionally, China is facing challenges posed by an ageing population, with nearly a third expected to be over 60 years old by 2040. These circumstances, along with an ongoing property crisis, suggest that China may not surpass the US as the world's largest economy.
Wall Street Dragged by the Fed's Statement: S&P 500, Nasdaq and Dow Compact Weaken.
The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all closed lower due to the Federal Reserve's decision to maintain interest rates, dashing hopes of a rate cut in March 2024. The Dow Jones fell by 0.82%, the S&P 500 by 1.61%, and the Nasdaq Composite by 2.23%. All sectors in the S&P 500 ended in the red, with the communication services sector and technology stocks experiencing the largest percentage decline. Alphabet's underperformance had a particularly strong impact on technology stocks and megacap stocks in the technology sector. Following the Fed's announcement and Jerome Powell's press conference, the stock market continued to decline, resulting in the S&P 500 experiencing its sharpest daily decline since September 2023. Despite these losses, the three major indices still recorded monthly gains in January 2024. The Federal Open Market Committee (FOMC) maintained its current policy rates, citing a gradually declining inflation rate and a resilient economy.
BRICS confirms five new member countries from South Africa.
Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have confirmed their acceptance to join the BRICS bloc after being invited in August 2023. Argentina, however, declined the invitation. During a press conference, South Africa's Foreign Minister, Naledi Pandor, announced this development. Pandor stated that Argentina has decided not to pursue its successful application to become a full member of BRICS, as indicated in a letter. South Africa has accepted this decision. It is worth noting that Saudi Arabia had already announced its intention to join the bloc earlier in 2024. The expansion of the BRICS bloc is viewed as an attempt to reform the current global order, which is considered outdated.