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World Bank fears risk of Global recession in 2023

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The world might be edging toward a global recession as central banks across the world simultaneously hike interest rates to combat persistent inflation, the World Bank said on Thursday.

The world’s three largest economies – the United States, China, and the euro area – have been slowing sharply, and even a “moderate hit to the global economy over the next year could tip it into recession,” the bank said in a new study.

The global economy is in its steepest slowdown following a post-recession recovery since 1970

The world’s three largest economies – the United States, China, and the euro area – have been slowing sharply

Consumer confidence dropped more sharply than in the run-up to previous global recessions

Synchronized interest rate hikes underway globally may not be enough to bring inflation back down to pre-pandemic levels

It said the global economy was now in its steepest slowdown following a post-recession recovery since 1970, and consumer confidence had already dropped more sharply than in the run-up to previous global recessions.

“Global growth is slowing sharply, with further slowing likely as more countries fall into recession,” World Bank President David Malpass said, adding his worry that these trends would persist, with devastating consequences for emerging market and developing economies.

Synchronized interest rate hikes underway globally and related policy actions were likely to continue well into next year, but might not be sufficient to bring inflation back down to levels seen before the COVID-19 pandemic, the bank said.

Unless supply disruptions and labor-market pressures subsided, the global core inflation rate, excluding energy, could stay at about 5.0pc in 2023, nearly double the five-year average before the pandemic.

To drive inflation lower, central banks may need to raise interest rates by an additional 2 percentage points, on top of the 2-percentage point increase already seen over the 2021 average, it said.

IMF sees further global economic slowdown

But an increase of that size, along with financial-market stress, would slow global gross domestic product growth to 0.5pc in 2023, or a 0.4pc contraction in per–capita terms, which would meet the technical definition of a global recession, it added.

Malpass said policymakers should shift their focus from reducing consumption to boosting production, including efforts to generate additional investment and productivity gains.

Previous recessions showed the risk of allowing inflation to stay elevated for long while growth is weak, the bank said, noting that the 1982 recession triggered more than 40 debt crises and ushered in a decade of lost growth in many developing economies.

World Bank Vice President Ayhan Kose said a recent tightening of monetary and fiscal policies would help cut inflation, but the highly synchronous nature of the measures could compound the situation and steepen the global growth slowdown.

The study suggested that central banks could combat inflation without touching off a global recession by communicating their policy decisions clearly, while policymakers should put in place credible medium-term fiscal plans and continue to provide targeted relief to vulnerable households.

 

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‘Mass casualty event’ as bridge hit by ship collapses into river in Baltimore, US

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Baltimore’s 1.6-mile (2.57 km) Francis Scott Key Bridge collapsed and vehicles plunged into the river early on Tuesday (March 26) after a ship collided into a support pylon, officials said, and rescuers were searching the water for survivors.

A live video posted on YouTube showed the ship ploughing into the bridge in darkness. The headlights of vehicles could be seen on the bridge as huge spans collapsed into the Patapsco River and the ship caught fire. Reuters could not immediately verify the videos. Up to 20 people were in the water, AFP said, citing the fire department. The Baltimore City Fire Department could not be reached immediately to confirm the number.

The department described the collapse as a mass-casualty incident and said workers were searching for seven people. “We received several 911 calls at around 1:30 am, that a vessel struck the Key Bridge in Baltimore, causing the collapse. This is currently a mass casualty incident and we are searching for seven people who are in the river,” Kevin Cartwright, director of communications for the Baltimore Fire Department told Reuters.

Baltimore police said they had been notified of the incident at 1:35 a.m. ET (535 GMT) on Tuesday.

The Associated Press reported that multiple vehicles had fallen into the water. Ship tracking data from LSEG shows a Singapore-flagged container ship, the Dali, at the location along the Key Bridge where the accident occurred. The registered owner of the ship is Grace Ocean Pte Ltd and the manager is Synergy Marine Group, LSEG data show.

Synergy Marine Corp said that the Dali collided with one of the pillars of the bridge and that all its crew members, including the two pilots, had been accounted for and there were no reports of any injuries. Reuters could not immediately reach Grace Ocean for comment. “All lanes closed both directions for incident on I-695 Key Bridge. Traffic is being detoured,” Maryland Transportation Authority said in a post on X.

It was not immediately clear if the Baltimore port operations were impacted due to the bridge collapse. The port’s private and public terminals handled 847,158 autos and light trucks in 2023, the most of any U.S. port. The port also handles farm and construction machinery, sugar, gypsum and coal, according to a Maryland government website. The Baltimore port did not immediately respond to Reuters’ request for comment. “I’m aware of and en route to the incident at the Key Bridge… Emergency personnel are on scene, and efforts are underway,” Baltimore Mayor Brandon Scott on X. The bridge, named after Francis Scott Key, opened in 1977.

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Gunmen kill at least 93 in concert attack near Moscow, Islamic State claims responsibility

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Camouflage-clad gunmen opened fire with automatic weapons at concertgoers near Moscow on Friday, killing at least 93 people and injuring 145 in an attack claimed by Islamic State militants.

In the deadliest attack in Russia since the 2004 Beslan school siege, gunmen sprayed civilians with bullets just before Soviet-era rock group “Picnic” was to perform to a full house at the 6,200-seat the Crocus City Hall just west of the capital.

Verified video showed people taking their seats in the hall, then rushing for the exits as repeated gunfire echoed above screams. Other video showed men shooting at groups of people. Some victims lay motionless in pools of blood.

“Suddenly there were bangs behind us – shots. A burst of firing – I do not know what,” one witness, who asked not to be identified by name, told Reuters.

“A stampede began. Everyone ran to the escalator,” the witness said. “Everyone was screaming; everyone was running.”

Russian investigators said the death toll was more than 60. Health officials said about 145 people were wounded, of which about 60 were in critical condition.

In the 2004 Beslan school siege, Islamist militants took more than 1,000 people, including hundreds of children, hostage.

Russian President Vladimir Putin was being updated by security chiefs about the situation, including from Alexander Bortnikov, the head of the Federal Security Service (FSB), the Kremlin said.

Russian investigators published pictures of a Kalashnikov automatic weapon, vests with multiple spare magazines and bags of spent bullet casings.

ISLAMIC STATE

Islamic State, the militant group that once sought control over swathes of Iraq and Syria, claimed responsibility for the attack, the group’s Amaq agency said on Telegram.

A grainy picture was published by some Russian media of two of the alleged attackers in a white car.

The fate of the attackers was unclear as firefighters battled a massive blaze and emergency services evacuated hundreds of people while parts of the venue’s roof collapsed.

Islamic State said its fighters attacked on the outskirts of Moscow, “killing and wounding hundreds and causing great destruction to the place before they withdrew to their bases safely.” The statement gave no further detail.

The United States has intelligence confirming Islamic State’s claim of responsibility for the shooting, a U.S. official said on Friday. The official said Washington had warned Moscow in recent weeks of the possibility of an attack.

“We did warn the Russians appropriately,” said the official, speaking on condition of anonymity, without providing any additional details.

Russia has yet to say who it thinks is responsible.

Item 1 of 15 Ambulances and vehicles of Russian emergency services are parked outside the burning Crocus City Hall concert venue following a shooting incident, outside Moscow, Russia, March 22, 2024. REUTERS/Yulia Morozova [1/15]Ambulances and vehicles of Russian emergency services are parked outside the burning Crocus City Hall concert venue following a shooting incident, outside Moscow, Russia, March 22, 2024. REUTERS/Yulia Morozova Purchase Licensing Rights, opens new tab

The attack on Crocus City Hall, about 20 km (12 miles) from the Kremlin, comes just two weeks after the U.S. embassy in Russia warned that “extremists” had imminent plans for an attack in Moscow.

Hours before the embassy warning, the FSB said it had foiled an attack on a Moscow synagogue by Islamic State’s affiliate in Afghanistan, known as ISIS-Khorasan or ISIS-K, and seeks a caliphate across Afghanistan, Pakistan, Turkmenistan, Tajikistan, Uzbekistan and Iran.

Putin changed the course of the Syrian civil war by intervening in 2015, supporting President Bashar al-Assad against the opposition and Islamic State.

“ISIS-K has been fixated on Russia for the past two years, frequently criticizing Putin in its propaganda,” said Colin Clarke of the Soufan Center.

The broader Islamic State group has claimed deadly attacks across the Middle East, Afghanistan, Pakistan, Iran, Europe, the Philippines and Sri Lanka.

Russian Foreign Ministry spokeswoman Maria Zakharova said it was a “bloody terrorist attack” that the entire world should condemn.

The United States, European and Arab powers and many former Soviet republics expressed shock and sent their condolences. Ukrainian presidential adviser Mykhailo Podolyak denied any Ukrainian involvement.

The United Nations Security Council condemned what it called a “heinous and cowardly terrorist attack.”

SECURITY TIGHTENED

Russia tightened security at airports, transport hubs and across the capital – a vast urban area of over 21 million people. All large-scale public events were cancelled across the country.

Putin, who was on Sunday re-elected for a new six-year term, sent thousands of troops into Ukraine in 2022 and has repeatedly warned that various powers – including countries in the West – are seeking to sow chaos inside Russia.

Putin was informed in the first minutes of the attack and is regularly being updated, the Kremlin said.

“The president constantly receives information about what is happening and about the measures being taken through all relevant services. The head of state gave all the necessary instructions,” Kremlin spokesperson Dmitry Peskov said.

At Crocus City Hall, flames leapt into the sky, and plumes of black smoke rose above the venue as hundreds of blue lights from emergency vehicles flashed in the night.

Helicopters sought to douse flames that engulfed the large building. The roof of the venue was collapsing, state news agency RIA said.

“A terrible tragedy occurred in the shopping centre Crocus City today,” Moscow Mayor Sergei Sobyanin said. “I am sorry for the loved ones of the victims

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PM Sheikh Hasina Congratulates Putin on Election Win

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Prime Minister Sheikh Hasina extended her congratulations to Russian President Vladimir Putin for his reelection today (21 March), as confirmed by Deputy Press Secretary Hasan Jahid Tushar.

Putin secured his fifth term in office after a record post-Soviet landslide victory in Russia’s election on Sunday (17 March), solidifying his already firm grip on power. He emphasized the significance of the result, stating that it sends a message to the West about Russia’s assertiveness in global affairs, whether in war or in peace, for years to come.

The outcome positions Putin, aged 71, to embark on a new six-year term, surpassing Josef Stalin to become Russia’s longest-serving leader in over 200 years if he completes it.

With an 87.8% vote share, Putin achieved the highest-ever result in Russia’s post-Soviet history, according to an exit poll by pollster the Public Opinion Foundation (FOM). The Russian Public Opinion Research Centre (VCIOM) also put Putin’s support at 87%. Initial official results validated the accuracy of the polls.

However, several nations, including the United States, Germany, and the United Kingdom, criticized the election, citing concerns over political repression and censorship.

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