## A World in Flux: Global Data Points to Watch This Month
Every month, we bring you a snapshot of critical global data, unraveling the major developments shaping our world. We dissect these events, analyzing their impact on the global stage, predicting future trends, and exploring their potential implications for India. This month, we delve into the US presidential race, China’s economic recovery efforts, the ongoing war in Ukraine, the looming threat of global debt, and the urgency of the climate crisis.
### 1. The US Presidential Race: A Tight Contest with Global Implications
The high-stakes US presidential campaign is reaching its climax with the two candidates, Kamala Harris and Donald Trump, locked in a nail-biting battle. The uncertainty has sent ripples through global markets, leaving investors on edge. The polls have shown a tight race since Harris joined the contest in late July, but key swing states like Arizona and Georgia, where Trump currently holds a lead, could significantly impact the outcome of the election on November 5th.
According to FiveThirtyEight’s daily election poll tracker, which aggregates several surveys, the race has tightened in recent days. Market analysts, however, predict a greater likelihood of a Trump victory. A Harris victory might offer some relief to Indians on immigration policy, but Trump’s aggressive trade tariffs on China could open up economic opportunities for India while also disrupting global trade dynamics.
### 2. China’s Stimulus Bazooka: A Boost to the Stock Market, but Uncertain Economic Recovery
In a bid to revitalize its slowing economy, China announced a substantial stimulus package in late September. The announcement triggered an immediate surge in the Chinese stock market, with the benchmark CSI 300 index rising 27% between September 25th and October 8th. Although a correction followed, the index remains 17% higher since the announcement.
The effectiveness of China’s attempt to stimulate the economy through increased funding and interest rate cuts remains a subject of debate among experts. Nevertheless, the stock market has reacted exuberantly, with investors shifting capital from other emerging market economies, including India. The lack of detailed implementation plans for the stimulus and the slower GDP growth of 4.6% in July-September have kept investors cautious. However, further stimulus announcements and signs of improving earnings growth could potentially drive the stock market higher.
According to Reuters, China is considering issuing an additional $1.4 trillion in debt over the next few years, which could further fuel the stock market’s upward trajectory.
### 3. The War in Ukraine: A Devastating Impact on Russia’s Economy
Russia’s full-scale invasion of Ukraine, which began in February 2022, has had a devastating impact on its economy. The country is grappling with high inflation, primarily driven by massive spending on military operations. Efforts to control inflation have led to a sharp increase in Russia’s key interest rate, which jumped another 200 basis points to 21% earlier this month. This marks the highest interest rate since the war began.
The war’s demand for mass production of goods and services has driven up workers’ wages, further contributing to inflationary pressures. The country’s central bank has acknowledged that inflation is significantly higher than projected, and inflation expectations continue to rise, indicating more rate increases in the coming months. With the war showing no signs of ending soon and Russia occupying approximately 20% of Ukraine’s internationally recognized territory, the Russian economy is likely to face further deterioration.
### 4. Global Public Debt: A Growing Headache
While the pandemic may be fading into the past, its financial repercussions continue to linger. Global public debt levels have significantly surpassed pre-pandemic levels and are projected to exceed $100 trillion by the year’s end, according to the Fiscal Monitor released by the International Monetary Fund earlier this month.
The global public-debt-to-GDP ratio is projected to reach 100% by 2030, exceeding the pandemic peak of 99% in 2021. While debt levels are particularly concerning in one-third of the world’s economies covered by the IMF, the situation in the US and China is especially problematic. Excluding these two economic giants, the ratio is 20 percentage points lower. The IMF has issued a warning that a combination of mediocre medium-term growth and rising debt could pose substantial risks to the global economy. It has called for a less restrictive monetary policy and a renewed focus on fiscal consolidation.
### 5. Climate Crisis: A Mounting Challenge at COP29
As the world prepares for COP29 in Azerbaijan, scheduled from November 11th to 22nd, a report by the United Nations Environment Programme paints a stark picture of the inadequate progress in tackling greenhouse gas emissions. The Emissions Gap Report 2024 highlights that global greenhouse gas emissions reached a record high of 57.1 gigatons of CO2 equivalent (GtCO2e) in 2023, representing a 1.3% increase year-on-year. This rate of increase is significantly higher than the 0.8% average rise between 2010 and 2019.
More concerning is the report’s revelation that current climate commitments from countries are insufficient and may put the world on track for a best-case global warming scenario of 2.6 degrees Celsius this century. Despite COP’s repeated calls for strengthening the 2030 target for emissions to 42% of 2019 levels to limit global warming to 1.5 degrees Celsius, there has been no substantial progress.
