Tag Archives: financial risk

Finance

International Monetary Fund- World Economy Still Recovering

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The IMF announced today (Tuesday, April 11, 2023) in the World Economic Outlook’s press briefing that the baseline forecast for global output growth is 0.1 percentage point lower than predicted in the January 2023 WEO Update, before rising to 3.0 percent in 2024.

“The world economy is still recovering from the unprecedented upheavals of the last three years, and the recent banking turmoil has increased uncertainties.”

“We expect global output growth to fall from 3.4% last year to 2.8% in 2023, before rising to 3% in 2024, mostly unchanged from our January projections. Advanced economies are expected to see an especially pronounced growth slowdown from 2.7% in 2022 to 1.3% in 2023. Global headline inflation is set to fall from 8.7% in 2022 to 7% in 2023 on the back of lower commodity prices but underlying core inflation is proving to be stickier. Importantly, this outlook assumes that recent financial stresses remain contained,” said Pierre-Olivier Gourinchas, the IMF’s Chief Economist.

Much uncertainty clouds the short- and medium-term outlook as the global economy adjusts to the shocks of 2020–22 and the recent financial sector turmoil. Recession concerns have gained prominence, while worries about stubbornly high inflation persist.

Chart- world economic outlook projections including Canada.

“Once again, risks are heavily tilted to the downside, they have risen with the recent financial turmoil. Most prominently, recent banking system turbulence could result in a sharper and more persistent tightening of global financial conditions. The simultaneous rate hikes across countries could have more contractionary effects than expected, especially as debt levels are at historical highs. There might be a need for more monetary tightening if inflation remains stickier than expected. These risks and more could all materialize at a time when policymakers face much more limited policy space to offset negative shocks, especially in low-income countries,” added Gourinchas.

With the fog around current and prospective economic conditions thickening, policymakers have a narrow path to walk towards restoring price stability while avoiding a recession and maintaining financial stability. Achieving strong, sustainable, and inclusive growth will require policymakers to stay agile and be ready to adjust as information becomes available.

“First, as long as financial stress is not systemic as it is now, the fight against inflation should remain the priority for central banks. Second, to safeguard financial stability, central banks should use separate tools and communicate their objectives clearly to avoid unwarranted volatility. Financial policies should remain laser focused on preserving financial stability and watch for any buildup of risks in banks, non-banks, and the real estate sectors. Third, in many countries fiscal policy should tighten to ease inflation pressures, restore debt sustainability, and rebuild fiscal buffers. Finally, in the event of capital outflows that raise financial stability risks, emerging market and developing economies should use the integrated Policy framework, combining temporary targeted foreign exchange interventions and capital flow measures where appropriate,” said Gourinchas.

Culture

Award Winner Explains Women’s Money Emotions

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Everyone has a relationship with money, but for women, it’s much more fraught with emotion, says Meriflor Toneatto.

When we avoid and ignore those emotions, we allow them to quietly guide our decision-making – which inevitably holds us back.

“Understanding our emotions, fears and doubts about money and how they affect our behavior can help us heal them so we can experience financial and personal freedom,” says Toneatto, an entrepreneur,  certified business and life coach, and author of  “Money, Manifestation & Miracles: 8 Principles for Transforming Women’s Relationship with Money.”  For women, money is an emotional currency. It’s tied to our sense of self-worth and self-confidence, and our feelings of safety and security. These feelings often translate into self-limiting decisions.

The effect can be profound. Consider female entrepreneurs:

“The number of women-owned U.S and Canada. businesses is growing 1.5 times faster than the national U.S. average, but a report from 2013 found that they’re still contributing less than 4 percent of overall business revenues, about the same as they were in 2007,” Toneatto says.

“Our businesses are smaller because we’re less likely than men to borrow in order to expand. We’re afraid to take financial risks,” she says citing a U.S. Department of Commerce report..

And in the corporate world:

Women comprise half the workforce, yet hold the majority of lower-wage jobs in the United States, according to the 2014 State of the Union address.

What are the emotions shaping so many of our decisions? Toneatto cites five:

Fear: The most common emotion among women is fear. With money, we fear not having enough of it; that we’ll lose it all and never get it back. Nearly including those according to the 2013 Women, Money and Power Study.

And we fear an abundance of money. We may fail to negotiate a higher salary because we fear we can’t live up to it. Successful women may be reluctant to reach higher because we fear failure — and losing it all.

These fears often have roots in situations we were exposed worth. They send a strong signal that we need to root out their source and heal it.

Guilt: People who say things like, “I feel guilty when I spend instead of save” or “I never buy anything unless it’s on sale” have guilt feelings associated with money. These, too, are often rooted in the fears and messages we saw and heard in childhood about not having enough money. Many of us are natural nurturers who’ve gotten the message that “good” women are selfless, and so we may freely, even recklessly, spend on others while withholding from ourselves.

Shame: This painful emotion cuts whether worthy and deserving. We avoid talking about shame, and so it exerts control over us. With money, shame is commonly connected to amassing a lot of debt and hiding it because we fear being judged, humiliated, and disliked.

Anger: This emotion repels money, opportunities and people because it can leave us closed off emotionally and physically from others. It’s based in a belief in the unfairness of life and/or the unfairness of money. A person who becomes angry about money may be angry at herself for missing an opportunity or for mishandling money in the past. Anger can lead to trust issues and to over-protecting every cent – even hoarding money.

Blame: Anger and blame often go hand in hand. hand in hand. It stems from feeling disappointed or wronged because you believe your life would have been easier and/or better if someone – maybe parents or a spouse — had been able to provide you with more money. Blame can sabotage relationships with both people and money for years.

“At some point in our lives, we all have felt one or more of these emotions,” Toneatto says. “The good thing is, once you begin to recognize them, they’re like a flashing yellow ‘caution!’ light.”

About Meriflor Toneatto

Meriflor Toneatto is the founder and CEO of Power With Soul, a company dedicated to empowering female entrepreneurs and professionals by helping them transform their relationship with money. The author of “Money, Manifestation & Miracles: 8 Principles for Transforming Women’s Relationship with Money.” Toneatto holds a bachelor’s degree in public administration and management and graduate certifications in personal, professional and financial coaching. A former corporate executive, she is a recipient of the Amethyst Award for Excellence and Outstanding Achievement from the government of Ontario, Canada.

Supplemental- http://www.canadiangovernmentexecutive.ca/category/item/1283-and-the-amethyst-goes-to.html