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Macro Snapshot — France sees positive economic growth in 2022; Fed to steam ahead on rate hikes 

RIYADH: Despite the current instability due to war and rising inflation, France is expected to witness positive economic growth in 2022. 

France’s finance minister said on Sunday he expected positive growth for 2022, but would revise economic forecasts at the start of July.

“It is clear that with the war in Ukraine, inflation, all that will put into question the forecasts, but we will have positive growth in 2022,” Bruno Le Maire told Europe 1 radio.

The current forecast sees the economy growing by 4 percent in 2022.

Pakistan expects GDP growth to slow 

Pakistan’s gross domestic product growth will slow to 5 percent for the upcoming fiscal year beginning on July 1, from 5.9 percent in the outgoing year, following budgetary tightening aimed at winning International Monetary Fund support, the government said on Saturday.

The Planning Ministry made the estimates ahead of the annual budget to be presented on June 10.

“Keeping in view external and local uncertain economic environment, GDP growth will slightly taper off and is envisaged at 5 percent for 2022-23 on the back of agriculture (3.9 percent), manufacturing (7.1 percent) and services sector (5.1 percent),” said the ministry in a working paper seen by Reuters.

Fed to steam ahead on rate hikes 

The Federal Reserve is on track for half point interest rate increases in June, July, and perhaps even beyond as fresh job market data Friday showed no sign the US economy is buckling under the pressure of high inflation and rising borrowing costs.

A Labor Department report early Friday showed US employers have added an average of 400,000 jobs each month since March, down from the nearly 600,000-per-month average pace from January 2021 to February of this year.

It is a downshift the Fed has reason to welcome, as it tries to tighten monetary policy fast enough to bring inflation down, but not so fast it triggers anything super bad.

Cleveland Fed President Loretta Mester called May’s job gains “strong” but said the slowing trend was “a good thing.”

(With input from Reuters)

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