The world could be edging towards recession, so says the IMF.
It's World Business Express from the BBC World Service.
I'm Leanna Byrne.
Africa's fuel crunch is deepening and China's property giant Evergrande faces a defining moment, as its founder pleads guilty to fraud.
The global economy could be pushed towards recession if conflict in the Middle East continues to drive up energy prices.
That's the latest warning from the International Monetary Fund.
In its latest world economic outlook, the IMF says, in a worst case scenario, with oil, gas and food prices staying elevated, global growth could slip below 2 by next year.
Its chief economist, Pierre-Olivier Gornika, spoke at a press conference just a short time ago.
Our severe scenario assumes that energy supply disruptions extend into next year, with greater macro instability.
Global growth falls to 2% this year and next, while inflation exceeds 6%.
Now the impact of the war will be uneven.
Low-income energy importers are highly exposed, especially those with pre-existing vulnerabilities and limited buffers.
But the damage is most severe for countries in the Gulf.
With me now is Fiona Sincada, Senior Market Analyst at Citi Index.
Fiona, what do you make of this?
It's quite a stark warning.
Yeah, it is.
And I think what's interesting though is very much the focus on the duration of the war.
So it does consider that the actual global growth could remain relatively resilient if the war ends in the next few weeks.
And in that case, global growth could just be downgraded to around 3.1%, down from 3.3% previously.
But if we see oil prices average over 110 a barrel for a long period of time, then that could spur the global recession.
And Fiona, the IMF singled out the UK is not doing very well out of this.
Why is that?
Yeah, so the UK will be hit hardest by an energy shock.
And that's basically because it's heavily reliant on imported energy and particularly gas.
So high prices, lift inflation and also slow growth.
And let's not forget, growth in the UK was already very slow.
So they'd expect growth to be downgraded to 0.8% this year, down from 1.3%.
All right, Fiona Sincotta, you stay right there.
Meanwhile, oil leaders from across Africa are meeting in Cape Town in South Africa as the global fuel crisis deepens.
Members of the African Refiners and Distributors Association, or ARDA, are coming together, as parts of the continent face huge rises in petrol costs and concerns about the supply of key chemicals for fertilisers.
Here's Anibor Kraga, ARDA's executive secretary.
I think the bigger impact has been on the eastern side, everywhere from Egypt, around the Horn of Africa down to southern Africa, especially the eastern coast, Kenya and the like.
They shut down refining and were importing the majority of their petroleum products from the Middle East and India.
What has happened now is you're seeing different types of impacts.
For example, a couple of weeks ago, I was in Egypt.
They've had to start rationing and shutting down businesses at 9 p.m. at night.
And the reality is that a lot of African countries don't have more than 20 days of strategic stocks.
So ultimately, it's shown us that we need to build resilient supply chains across Africa.
In some ways, there might be new opportunities for African ports and supply chains because alternative routes around the Cape of Good Hope are boosting demand for refueling services in parts of southern Africa, for example.
There's an American saying, never waste a good crisis, right?
And I think it has shown that, given where we're going and I think it's important to look at the backdrop of where we're going, irrespective of the shocks that are happening now
One in two people born globally for the next two decades to 2040 is going to be African.
Energy demand here is projected to grow significantly.
So ultimately, we need to have a coordinated approach to meeting that energy demand going forward.
And that's the opportunity.
I guess as optimistic and forward thinking, but then at the same time, right now we've got a crisis.
We've got fuel prices in Somalia surged up by 150%.
Is there anything that can be done right now for them?
How do I put this?
Unfortunately...
It's now refineries don't show up overnight, infrastructure doesn't show up overnight.
I think what can happen is the governments can start to look at how they can hopefully bridge some of this.
But longer term, there has to be a more robust solution in place.
That was Anibor Kraga, Executive Secretary of the African Refiners and Distributors Association.
Authorities in the United States have charged a man with attempted murder after he allegedly threw a Molotov cocktail at the San Francisco home of the CEO of OpenAI, Sam Altman.
20-year-old Daniel Moreno Gamma from Texas is also facing charges including possession of an unregistered firearm and attempted destruction of property using explosives.
Police say they found documents in his possession expressing opposition to artificial intelligence, along with the names and addresses of executives and investors linked to major AI companies.
Now, Fiona Sincotta is still with us.
And let's look at these bank earnings, Fiona.
JP Morgan profit surge.
Why are they making so much money?
Yes, a 13% rise in profits, a 10% jump in revenue, record revenue.
And this was on the back of as the bank cashed in on financial market volatility earlier across the period of the Iran war, and that's lifted trading revenue.
But whilst the bank has actually enjoyed that boost from trading activity, CEO Jamie Dimon did actually warn over the outlook amid sort of complex risks and riding commodity prices.
Wells Fargo also reported, but they were slightly disappointing.
They beat on earnings, but disappointed on their revenue.
All right, Fiona Sincotta, always a pleasure.
Now, you might remember this story.
Evergrande was once China's biggest real estate firm, before its debt crisis sent shockwaves through the wider economy.
Today, the founder of the collapsed property giant pleaded guilty to a series of fraud charges.
A statement from the court in the southern Chinese city of Shenzhen says he expressed remorse during proceedings.
It's a case that marks a major moment in the fallout from the company's collapse.
The BBC's Nick Marsh in Singapore is covering this one.
Well, Evergrande was the biggest Chinese property developer, one of the biggest in the world.
It was founded by Hui Kai Yan, who really was born into poverty in rural China, worked his way up.
But in the early 2020s, it ran into serious financial trouble.
Like a lot of Chinese property companies.
Companies were basically building property like there was no tomorrow.
So they were borrowing vast sums of money to build new housing projects, which people were pouring their money into.
People were making a lot of money.
There was a real boom in construction.
The Chinese government saw what was happening and it thought it smelt the ingredients of a property bubble.
So, to try and nip this in the bud, it brought in these new rules about how much and in what ways Chinese property companies could borrow.
It really cut off a lot of credit lines to companies like Evergrande, and all of a sudden...
They found themselves in enormous amounts of debt that they couldn't pay back.
At one point, Evergrande owed $300 billion.
And in 2021 it started defaulting on some debts and And in the end, it collapsed and was liquidated in 2024.
Shortly before that liquidation, Hui Ka Yan, the founder, was placed under police control.
He was charged with a series of fraud offences, so things like embezzlement, bribery.
He already admitted to and was fined for inflating the company's assets.
And now in a court in Shenzhen, in Guangdong province, where it all began.
He has pleaded guilty to these offences.
And the verdict will be made public a bit later this week, we think.
And you would assume that he would spend quite a lot of time behind bars.
Nick Marsh there.
And finally, a gold pocket watch owned by a hero of the sinking of the Titanic could fetch up to 135000 at auction.
At least that's what sellers are hoping.
The watch which is going under the hammer in England later this month was awarded to an engineer on a passing steamship that helped rescue more than 700 passengers.
The disaster itself claimed around 1,500 lives.
And that's it from World Business Express from the BBC World Service.
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I'm Leanna Byrne.
Have a great day and thanks so much for listening.
