What We're Reading:

What We're Reading:

Why the dollar remains the world’s reserve currency, and will stay that way. Recent talk that China, India and Russia are settling purchases of oil in non-dollar denominations has generated speculation that the dollar’s days as the world’s reserve currency are ending. (The Real Economy Blog)

DOJ secures largest settlement payment yet for U.S. sanctions violations involving North Korea. U.K.-based company pays $629 million for using Chinese shell companies to conceal tobacco sales to North Korea. (Barnes & Thornburg)

Federal Reserve’s increasing interest rate hikes put Main Street economy ‘dangerously close’ to edge of lending cliff. Small business owners have not faced lending costs reaching into the double-digit percentages in decades. (CNBC)

European Central Bank slows the pace of monetary tightening. The European Central Bank (ECB) offered its latest monetary policy assessment today, delivering a smaller rate increase than at previous meetings. (Wells Fargo)

US Exports are highest on record. U.S. exports of goods and services climbed to $3.0 trillion in 2022—the highest on record. Goods exports grew 17.59% to $2.1 trillion and services exports reached $924.2 billion, both records. (World Trade Month)

There’s a big problem with China’s economic recovery that has nothing to do with shopping. China’s economic recovery remains patchy, with latest indicators pointing to a contraction in manufacturing, while consumers splurge over the holidays and the housing market continues to rebound. (Fortune)

Lula backs BRICS currency to replace dollar in foreign trade. Brazil’s Luiz Inacio Lula da Silva called on BRICS nations to come up with an alternative to replace the dollar in foreign trade, supporting China’s crusade against US global dominance just as he prepares to meet with President Xi Jinping in Beijing. (Bloomberg)

WHO says COVID emergency is over. So what does that mean? The World Health Organization downgraded its assessment of the coronavirus pandemic on Friday, saying it no longer qualifies as a global emergency. (AP)

Singapore's central bank imposes additional capital requirement on DBS Bank. The Monetary Authority of Singapore on Friday imposed additional capital requirement on DBS Bank, the banking arm of the country's largest lender DBS Group (DBSM.SI), following the disruption of its banking services in recent months. (Reuters)

US launches $4 billion effort to electrify US ports, cut emissions. The Biden administration on Friday launched a $4 billion effort to electrify U.S. ports and cut heavy duty truck emissions. (US & World News)

HSBC faces shareholder vote on splitting bank. Chinese shareholder Ping An argues split necessary as bank lags behind international peers. (Aljazeera)

Global food prices rise for first time in a year. Global food prices rose in April for the first time in a year, according to new figures released Friday by the United Nations' food agency. (Axios)

Asia and the Pacific is a relative bright spot amid the more somber context of the global economy's rocky recovery.

As the Chart of the Week shows, the region will contribute about 70% of global growth this year—a much greater share than in recent years.

Our latest Regional Economic Outlook describes the resilience of the world’s most dynamic region and important challenges facing its policymakers. Growth in Asia and the Pacific is forecast to accelerate to 4.6% this year from 3.8% last year.

The main development has been the reopening of China, where surging consumption is boosting growth across the region despite weaker demand from the rest of the world. Risks to the outlook include spillovers from greater-than-expected US monetary policy tightening and supply chain disruptions associated with geoeconomic fragmentation.

But the region also faces important challenges. In the short term, monetary and fiscal policies will need to remain tight to bring inflation durably back to central bank targets and stabilize public debt. An integrated policy response using all available tools will be needed to manage global shocks. While Asia’s financial systems haven’t seen major impacts following recent banking turmoil in the United States and Europe, they need to be carefully monitored given high leverage among households and corporates.

In the longer term, the Chinese economy that has been the primary engine of regional and global growth for decades is expected to slow considerably in the face of unfavorable demographics and a productivity slowdown. The region should prioritize structural reforms to boost long-term growth, including through innovation and digitalization, while accelerating the green energy transition.

This article originally appeared on IMF Blog.

Global commodity prices are expected to decline this year at the fastest clip since the onset of the COVID-19 pandemic, clouding the growth prospects of almost two-thirds of developing economies that depend on commodity exports, according to the World Bank’s latest Commodity Markets Outlook report.

The drop in prices, however, is expected to bring little relief to the nearly 350 million people across the world who face food insecurity. Although food prices are expected to fall by 8% in 2023, they will be at the second-highest level since 1975. Moreover, as of February this year, annual food price inflation is at 20% globally, the highest level over the past two decades.

“The surge in food and energy prices after Russia’s invasion of Ukraine has largely passed due to slowing economic growth, a moderate winter, and reallocations in the commodity trade,” said Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “But this is of little comfort to consumers in many countries. In real terms, food prices will remain at one of the highest levels of the past five decades. Governments should avoid trade restrictions and protect their poorest citizens using targeted income-support programs rather than price controls.”

Overall, commodity prices are expected to fall by 21% in 2023 relative to last year. Energy prices are projected to decline by 26% this year. The price of Brent crude oil in U.S. dollars is expected to average $84 a barrel this year—down 16% from the 2022 average. European and U.S. natural-gas prices are forecast to halve between 2022 and 2023, while coal prices are expected to decrease 42% in 2023. Fertilizer prices are also projected to fall by 37% in 2023, which would mark the largest annual drop since 1976. However, fertilizer prices are still near their recent high last seen during the 2008-09 food crisis.

Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of Prospects Group, said: “The decline in commodity prices over the past year has helped reduce global headline inflation. However, central bankers need to remain vigilant as a wide range of factors, including weaker-than-expected oil supply, a more commodity-intensive recovery in China, an intensification of geopolitical tensions, or unfavorable weather conditions, could push prices higher and reignite inflationary pressures.”

Despite the large declines expected this year, prices of all major commodity groups will remain well above their 2015-2019 average levels. European natural gas prices will hover at almost three times the average in 2015-19. Energy and coal prices will also remain above the pre-pandemic average.

“Metal prices, which increased slightly early in the year, are expected to fall by 8% relative to last year, primarily because of weak global demand and improved supplies,” said Valerie Mercer-Blackman, Lead Economist in the World Bank’s Prospects Group. “In the longer term, however, the energy transition could significantly lift the demand for some metals, notably lithium, copper and nickel.”

A Special Focus section of the report evaluates the performance of a wide range of approaches used to forecast prices of seven industrial commodities (oil and six industrial metals). A key finding of the study is that futures prices, which are widely used for price forecasts, often lead to large forecast errors. Econometric models based on multiple independent variables tend to outperform other approaches as well as futures prices. The analysis suggests that augmenting model-based forecasting approaches—by incorporating the dynamics of commodity prices over time and controlling for other economic factors—enhances forecast accuracy.

You are constantly judged by how effectively you express your ideas in both verbal and written communication.

Golden Rule: Make your written messages as long as necessary and as short as possible. Make every word count. Only provide what’s relevant. Thinking and writing are interrelated. Writing helps you clarify your thoughts and clear thinking helps you improve your writing. 

The following actions will help you organize and focus your writing. 

1. Know your objective

You can’t write clearly until you determine what you want the reader to do and why they should do it. Think before you write.

2. Organize your message so it’s easy to follow

There are two basic approaches.

• Start with the conclusion or action requested. You need to do XYZ by June 8th. Then make your case to justify your request. 
• Start with the issue or problem. Make the case for what needs to be done. End with your request. 

3. Explain and support your ideas

Decide which examples, stories, facts, statistics, testimonials and quotes will be most helpful in explaining and supporting your message.

4. Use bullets or numbers

This makes your message easy to read and digest.

5. Use short sentences

According to the American Press Institute, sentences with eight or fewer words are understood 100% of the time. Advertising executive David Ogilvy once gave the following advice: “Use short words, short sentences and short paragraphs.”

6. Use precise words and phrases

Words like these—as soon as possible, they and teamwork are vague and imprecise. Ambiguous words often lead to communication breakdowns. Be specific when it comes to naming people, describing action items and due dates.

7. Use an active voice

Active voice lets the reader know immediately who’s doing the action.

• The meeting was conducted by Pat. (Passive voice)
• Pat conducted the meeting. (Active voice)

8. Edit your writing

Good writing requires significant editing. Read what you have written several times. Each time focus on a different aspect of your message such as organization, grammar, word choice and eliminating anything that doesn’t add value. Use apps and online tools to make sure your spelling, grammar and punctuation are all correct.   

Ask a trusted friend to read it and provide suggestions for improvement. 

(My first draft of this article had 780 words. I edited it down to 410 words)  

Paul B. Thornton is an author and speaker. His books are available at Amazon and include: 

• “Is Your Organization Aligned?”
• “Leadership-Perfecting Your Approach and Style”
• “Leadership Case Studies”

He frequently posts his views and opinions about leadership on LinkedIn.   

This article originally appeared on SmartBrief.

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate