IMF upgrades global economy outlook

Ankur Desai (0:00)

This is the Global News Podcast from the BBC World Service. Hi, I'm Uncle Desai, and at 14 Hours GMT on Tuesday the 13th of October, these are our main stories. The International Monetary Fund says the global economy has weathered the wars in the Middle East better than was feared. A leading Iraqi human rights organization says the government must do more to protect women who speak out about sexual violence. Pope Leo has been admitted to hospital to have surgery after a lump was found on his lung.

Also in this podcast, US emergency call records reveal confusion after the failed execution of Christa Pike in Tennessee.

SPEAKER_2 (0:38)

We are trying to find out if that is an actual thing that is happening and we need to send an ambulance and or if you need police assistance or if this is someone that is just basically prank calling.

Ankur Desai (0:49)

And Rwanda has signed a deal to host Africa's first Formula One race in more than three decades.

The energy crisis caused by the war in the Middle East has pushed prices up and put pressure on governments, businesses and consumers around the globe. But the International Monetary Fund now says that the world's biggest economies have shown surprising resilience despite the ongoing conflicts. The IMF has reversed its downgrades of economic growth at the start of the Iran War. It's now forecasting a slight improvement in the global economy. At the same time, it warned hazards do remain. Silvana Tenreyro is the IMF's chief economist.

Silvana Tenreyro (1:29)

The economy has been resilient, but that resilience is reaching its limits. The task ahead is to move from coping to rebuilding, restoring fiscal space and supply side resilience, and in that way strengthen countries' ability to grow sustainably.

Ankur Desai (1:47)

From Bangkok, where the IMF is meeting, here's our economics editor, Faisal Islam.

Faisal Islam (1:51)

This is a report for fans of nuance and balance. There's a lot of understandable doom mongery about the world economy, given the fact we had a massive trade shock, a massive energy shock at the same time.

But I think the backdrop here is you had those two negative shocks at the same time as a significant positive shock, which is massive investment in AI.

And to some degree, they have balanced each other off more than expected. So both the negative shocks, the world has been more flexible in coping with them. The energy has found other routes, not completely making up for the blockade in the Strait of Hormuz, but somewhat more than you would have expected. The trade has found other routes. So the US and China has seen a fall in the mutual trade, but both of the world's top two economies have increased substantially their trade with third countries. So that has been a diversion of sorts. And then despite the negative of both of those two factors, you're seeing this AI boom, frankly, staggering amounts of investment help support the world economy in patches. So this mainly centered around, of course, the USA, where I am right now in Asia, the UK has benefited too. So it's a kind of sort of global seesaw balancing act, which has meant that the global economy, the downgrades, some of the downgrades penciled in quite understandably six months ago, some of those have been reversed, albeit that resilience is still quite cautious. You know, we don't exactly know how long the energy shock will last. We don't know exactly if the AI boom will turn to bust, as some people suspect. So that is sort of where we are now. I'd say net-net less pessimism, perhaps even more optimism than you would have expected given the shocks.

Ankur Desai (3:38)

It's one of the busiest airports in the Middle East, but the King Khalid International Airport in the Saudi capital Riyadh will remain closed for at least another four days due to the continuing threat from the Iranian-backed Houthis in Yemen.

The airport has seen three deadly attacks in recent days. That's reportedly prompted the Saudi authorities to launch an investigation to find out how its air defenses failed to intercept missiles and drones. In the last few hours, three missiles are reported to have been shot down north of Riyadh. I asked our correspondent in the region, Hugo Bishaga, about the fallout from the airport closure.

Hugo Bishaga (4:13)

We're seeing that hundreds of flights have been suspended. This airport, which is the main airport in Riyadh, in the capital of Saudi Arabia, has now suspended operations until at least Saturday. So a lot of disruption there. But we're also seeing disruption in other parts of the country because some airlines have also suspended flights to other cities, including Jeddah. So a very uncertain situation, volatile situation in the country. I think a lot of people want to know how the Houthis have been able to strike this airport repeatedly, penetrate the country's air defences and carry out these attacks. So we understand now that there have been reports that an investigation has been open to see how these attacks took place. And I think, you know, the attacks on the airports in particular have now become a symbol of how vulnerable parts of Saudi Arabia are.