The IMF Spring Meeting

Written by Citadel Global Director, Bianca Botes

Snippets from the International Monetary Fund (IMF) Spring Meeting have been used across various discussion platforms and think tanks by industry role players as part of their strategies and attempts to anticipate and plan for the future. This week we unpack the meeting, and some of the key topics covered by the event.

Key themes for this week include:

  • IMF meeting highlights uncertain global outlook
  • United States (US) labour market shows signs of softening
  • Equities earnings subdued as further rate decisions loom
  • Global growth concerns weigh on oil prices
  • The euro remains near one-year highs


The IMF Spring Meeting is an annual gathering of the IMF and the World Bank Group. At this meeting, representatives from member countries, international financial institutions, and civil society come together to discuss the state of the global economy and its challenges.

The Spring Meeting is important because it provides a platform for key players in the global economy to discuss and develop solutions to the most pressing economic issues facing the world. In addition to the meetings of the IMF’s Board of Governors, the Spring Meeting also features various seminars, forums, and other events that address topics such as the reduction of poverty, financial stability, and sustainable economic growth.

The meeting also serves as an opportunity for member countries to meet with each other and with the IMF and World Bank staff to discuss economic policy, share experiences, and coordinate economic efforts. This can help to promote cooperation and coordination among countries and international organisations, which is critical for addressing global economic challenges. Overall, the IMF Spring Meeting is an important event for promoting international economic cooperation, addressing global economic challenges, and advancing economic development and growth around the world.

This year, the meeting focused on issues like the uncertainty facing the global economy given the instability in financial sectors, high inflation, the ongoing conflict between Russia and Ukraine, as well as how to deal with any lingering fallout from the pandemic. In addition, eradicating poverty and empowering women in the economic environment were also discussed. The overarching key themes that emerged were:

• Global growth outlooks

While inflation remains elevated, global growth is declining, and labour markets are tight in key economies. As such, interest rates are likely to remain elevated, which further adds pressure to global growth prospects. The risk of a hard landing and recessions in many countries has risen significantly. It is currently expected that global growth will fall from 3.4% in 2022 to 2.8% in 2023, before stabilising at 3% in 2024.

• Interest rate outlooks

The natural interest rate across countries, which is defined as the real interest rate that neither stimulates nor contracts the economy, sets the stage for monetary policy and public debt outlooks. Currently, it is expected that interest rates will likely settle near pre-pandemic levels once price pressures ease, however, elevated rates are expected to persist throughout 2023 as inflation proves to be stickier than initially anticipated.

• Increasingly high public debt

Economic growth and inflation can play a role in reducing public debt. Countries should take action and deploy strategies to restructure and consolidate debt to lower debt-to-GDP (gross domestic product) ratios.

• Fragmentation and geopolitical tension

Tension and fragmentation lead to the loss of foreign direct investment (FDI). Global integration and cooperation remain crucial to avoid the fragmentation of FDI. In addition, the economic fallout due to a redirection of FDI resulting from the misalignment between countries, caused by policy and trade disputes should be avoided.


The number of Americans filing for unemployment benefits rose by 5,000 to 245,000 in the week ending 15 April, the most in one month and above market expectations of 240,000. The result was in line with a batch of data for March that suggested a break in the long streak of data pointing to a tight labour market despite aggressive rate hikes by the US Federal Reserve (Fed).

The unemployment rate in the United Kingdom (UK) increased by 0.1% for the period December 2022 to February 2023, to 3.8%, its highest level since the first quarter of 2022, marginally beating market consensus of 3.7%. The UK Consumer Price Index (CPI) rate eased to 10.1% year-on-year in March, down from 10.4% in February but remained above market expectations of 9.8%. The rate is above the 10% mark for a seventh consecutive period and has been well above the Bank of England’s (BoE’s) 2% target for almost two years, suggesting policymakers might continue to raise interest rates.

The Chinese economy gained 4.5% year-on-year in the first quarter of 2023, accelerating from 2.9% in the fourth quarter of 2022 and topping market expectations of 4%, marking the strongest pace of growth since the first quarter of 2022, as Beijing works to spur the post-pandemic recovery. Chinese retail sales growth was at a near two-year high in March, while industrial output rose at its highest rate in five months. However, it is worth noting that a complex global environment and insufficient domestic demand indicates that the country’s recovery is not where it needs to be to meet targets just yet.

The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index fell to a four-month low of 111.3 in March from 111.9 in February, dragged down by loadshedding, rising interest rates and lower share prices. South Africa’s annual inflation rate rose for the second month to 7.1% in March, from 7% in the previous month, against market expectations of 6.9% and remains above the upper limit of the South African Reserve Bank’s (SARB’s) target range of 3% to 6%. The annual core inflation, which excludes prices of food, non-alcoholic beverages, fuel, and energy, stood at a six-year high of 5.2% in March, unchanged from February and slightly above market expectations of 5.1%.


Stock futures contracts tied to the Dow Jones fell 0.5% on Thursday, while those linked to the S&P 500 and Nasdaq were down 0.8% and 1.1%, respectively. Investors are analysing corporate earnings results while mulling the future path of interest rates. Tesla slumped over 7% in premarket trading after the electric carmaker announced more price cuts and reported its lowest quarterly gross margin in two years. AT&T fell almost 5% after the US wireless carrier missed revenue estimates for its first quarter. Financial services company, American Express, declined roughly 1% after it also missed earnings estimates. On the positive side of the ledger, IBM rose 1% after the technology company said margins were expanding. Meanwhile, the Fed’s Beige Book survey showed the US economy stalled in recent weeks as hiring and inflation slowed and access to credit narrowed.

Equities in London struggled to find traction on Thursday, with the benchmark FTSE 100 hovering below the 7,900 mark, as losses in the heavyweight materials sector offset gains in consumer staples. Wednesday’s data showed that sharper-than-expected UK consumer price increases also weighed on sentiment by dashing hopes that the Bank of Enhland (BoE) will soon end its aggressive tightening campaign. On the corporate side, manufacturing company, Melrose Industries, came into the spotlight when trading more than doubled in value from the previous session because of the reverse stock split. Miner, Antofagasta, was among the top losers, down almost 4%.

European shares were slightly down for a second straight session on Thursday, with the pan-European STOXX 600 edging 0.1% lower but remaining close to a recent 14-month peak. Investors remained cautious ahead of key earnings trickling out of Europe today and as they prepare for several major central bank meetings in the next few weeks. On the earnings front, French car manufacturer, Renault, reported a 29.9% increase in revenues for the first quarter and reaffirmed its 2023 outlook and Sweden’s Volvo also posted higher adjusted operating income and raised its outlook for the European and North American heavy-duty truck markets amid easing supply chain disruptions in Europe. Swiss elevator and escalator manufacturer, Schindler, also reported a 47% jump in first quarter profit.

South Africa’s JSE FTSE All Share index traded slightly softer around 78,520 points on Thursday, extending losses for the second day, mainly pushed down by resource-linked sectors. Market sentiment remained fragile amid ongoing concerns about persistently high inflation and consequent tighter monetary policies for longer. Meanwhile, traders continued monitoring the earnings season to gauge the global economy’s health. On the domestic front, South Africa’s Reserve Bank Governor, Lesetja Kganyago, said that despite the surprise acceleration in March’s inflation due to sticky food prices, he still believes that inflation will ease over the course of this year and eventually settle within the central bank’s target range. Meanwhile, two Social Research Foundation polls showed South African President Cyril Ramaphosa’s approval rating plunged more than eight percentage points in the nine months through March amid the government’s failed attempts to tackle the critical power crisis in the country.


West Texas Intermediate Crude futures fell toward $78/barrel on Thursday, extending losses from the previous session, weighed down by concerns that higher interest rates could dampen global economic growth and future energy demand. The Fed is expected to deliver another 25 basis point rate hike in May, and the European Central Bank is expected to raise borrowing costs three times in the next few months. Meanwhile, the latest International Energy Agency report showed crude oil stocks in the US fell by 4.581 million barrels last week, far exceeding forecasts of a 1.088 million barrel drop and offering a somewhat bullish outlook for short-term demand. Also, bets increased that demand from China would remain strong after the first quarter GDP figures pointed to a sharper recovery.

Gold recovered from Wednesday’s losses to trade around $2,000/ounce on Thursday, as the dollar eased during intraday trade and Treasury yields eased. Investors continue to assess the monetary policy outlook along with the impact of high borrowing costs on already strained economies. Markets continue to price in a 25 basis point increase in the fed funds rate next month while a cut is now mostly expected by the end of the year. Comments from several Fed officials will be in the spotlight for further hints on what the Fed will do.

Copper futures in the US declined, to trade near the $4.00/pound mark, retreating from the seven-week high of $4.12 touched on 13 April as the dollar recovered from the recent lows and investors weighed near-term demand concerns against evidence of tight supply. The stability of US banks has also given the Fed leeway to hike rates further and destroy demand, while lower-than-expected industrial production in China heightened doubts over the manufacturing recovery of the world’s top copper consumer. Data from the London Metal Exchange showed inventories fell to 56,000 tonnes, their lowest level since 2005. In addition, Chile’s state-owned Codelco mine said the output in 2023 is estimated to sink as much as 7% after the 10.6% decline in 2022. Depleting stocks worldwide drove Trafigura to forecast copper prices at a record high this year, while Goldman Sachs projected a global shortage of visible copper inventories by September


The US Dollar Index dipped to 102 on Thursday after gaining some ground in the previous session, as more data pointed to a weakening economy while the Fed is expected to hike rates again. New York Fed Bank President, John Williams, said on Wednesday that inflation is still at problematic levels and the Central Bank will act to lower it. St. Louis Fed President, James Bullard, also said earlier this week that he favours a higher terminal rate of between 5.50% to 5.75%, while Atlanta Fed President, Raphael Bostic, said he sees one more 25 basis point increase before pausing.

The euro held above the $1.09 mark, close to an over-12-month high of $1.1075 touched on 14 April, as European Central Bank (ECB) policymakers called for a tighter policy. ECB chief economist, Philip Lane, on Tuesday joined a chorus of eurozone central bankers supporting an interest rate increase at the May meeting but said the size would depend on incoming data. Earlier this month, ECB’s Klaas Knot had already stated it was unclear whether a 50 basis point or 25 basis point hike would be needed. At the same time, Robert Holzmann backed another 50 basis point move, while Peter Kazimir considered a slowdown in the pace of tightening. Markets are now pricing in a 25 basis point rate hike next month, with around a 20% chance of a larger 50 basis point hike. Last week, ECB President, Christine Lagarde, said the Central Bank stood ready to respond as necessary to combat inflation, with inflation projected to remain high for a long period.

The pound sterling extended gains above $1.24, moving closer towards an over-10-month high of $1.2546 touched on 14 April, after recent data pointed to sticky inflation and a tight labour market in the UK. The latest CPI report showed Britain’s inflation rate remained above the 10% mark for a seventh straight month in March, with food inflation hitting a 45-year record high and supporting expectations of a 25 basis point rate hike in May from the BoE.

The South African rand traded rangebound for most of the week, consolidating near the 18.30/$ mark, remaining in sight of the one-month low of R18.50 hit on 10 April, as the dollar gained throughout this week. However, during overnight trade on Thursday, the rand managed to gain momentum against the greenback, as higher-than-expected inflation increased bets that the SARB will move to hike interest rates again by 25 basis points in May, following the recent 50 basis point hike, while the Fed is expected to pause its rate hiking cycle soon.