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World Bank predicts a resilient global economy in 2026 despite tariffs, but with fading dynamism
The World Bank said that the global economy has proven to be more resilient than anticipated, and 2026 GDP growth will likely improve slightly compared to forecasts made in June last year. However, it warned that growth was too concentrated in developed countries, and too weak overall to reduce extreme poverty. World Bank's Global Economic Prospects Report shows that the global output will grow at a slower pace this year, from 2.7% to 2.6% in 2025. It will then return to 2.7% by 2027. The 2026 forecast for GDP is two-tenths a point higher than the previous predictions made in June. In 2025, growth will be four-tenths a point above the prior forecast. World Bank says that two-thirds (or about a third) of the upward revision is due to the better-than expected growth in the U.S., despite tariffs-driven trade disruptions. The World Bank predicts that the U.S. will grow by 2.2% in 2026 compared to just 2.1% in 2025, an increase of two tenths. The World Bank stated that after an import surge to beat tariffs in early 2025 held back U.S. economic growth, larger tax incentives would aid growth in the following year. The global lender warned that if current forecasts prove accurate, the 2020s will be the slowest decade of global?growth in the past 50 years. This is too low to prevent stagnation and unemployment among emerging markets and developing countries. Indermit Gil, World Bank chief economist, stated in a press release that "with each passing year the global economy is less able to generate growth and appears more resilient to uncertainty of policy." "But the divergence between economic dynamism, resilience and public finance cannot last for long." Gill said that the global GDP per capita in 2025 would be 10% higher than it was on the eve COVID-19, marking the fastest recovery since a major crisis in 60 years. He said that many developing countries were being left behind. A quarter of them had lower incomes per capita than in 2019. This was especially true for the poorest countries. CHINA'S ECONOMIC GREENHOUSE GROWTH IS EXPECTED SLOWDOWN The growth rate in emerging markets and developing countries will be 4.0% by 2026, down from 4.2%. This is a two-tenths or three-tenths point decrease compared to the June forecasts. The World Bank stated that the growth rate of this group in 2026, excluding China, will remain at 3.7%. This is unchanged from the previous year. China's economy will grow at a slower rate of 4.4% by?2026, down from 4.9%. However, the forecasts have both increased four-tenths a percentage points from June because of fiscal stimulus and increased exports. The World Bank stated that the growth in the Eurozone will slow from 1.4% to 0.9% by 2026 due to U.S. Tariffs, but recover to 1.2% by 2027 thanks to increased European defense spending. The outlook for Japan is the same in 2026. Growth will slow to 0.8% from 1.3% growth in 2025. This was a year that was aided by exports being pushed up to the U.S. ahead of tariffs imposed by President Donald Trump. The World Bank stated that slower consumption and investments in Japan would keep the GDP growth at 0.8% by 2027. (Reporting and editing by David Lawder)
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Silver also sets new record highs as Fed rate cuts bets are backed by inflation data. Gold records new highs
Gold hit a new record on Tuesday as U.S. data on inflation fueled?bets that the Federal Reserve will cut rates this year. Meanwhile, persistent geopolitical and economic uncertainty drove demand for safe-haven assets. Silver also reached a new peak. As of 09:50 am, spot gold rose 0.8% per ounce to $4631.19 ET (1450 GMT) followed a session high of $4634.33. U.S. Gold Futures for February Delivery rose by 0.6% to $4641.30. David Meger said that the CPI data was a factor in the slight positive market tone. This is because the CPI data indicates a greater likelihood of Fed rate cuts in the near future. The U.S. core Consumer Price Index increased by 0.2% in December compared to the previous month and by 2.6% compared to December last year, which was below analysts' expectations for 0.3% and 2,7% respectively. Trump reiterated his call to reduce interest rates "meaningfully", after inflation data. Investors expect two rate cuts in this year, but the Fed is expected to hold rates steady at its meeting on January 27-28. Lower interest rates are generally favorable for non-yielding gold. Meger said that fundamental factors such as geopolitical tensions, questions about Fed independence and concerns over the Fed's independence continue to support gold as a safe haven. Concerns about the independence of the Fed increased after Trump opened a criminal probe into Fed Chair Jerome Powell. Former Fed chiefs as well as global central bankers criticized this move. Trump has also warned to slap 25% tariffs on countries that trade with Iran, putting Beijing at risk of reopening old wounds. Beijing is Tehran's main partner. Overnight, Russia also struck Ukraine's cities with?missiles or drones. Commerzbank has raised its gold forecast for 2026 to $4,900. CME Group announced on Monday that it would adjust the margin setting for precious metals in order to respond to market volatility. Spot silver, which had earlier reached a high of $89.10 per ounce, gained 4.7%. "Despite technical indicators screaming a correction, traders still favor bullish options for silver )... despite the high volatility environment," said Hugo Pascal a precious metals dealer at InProved. Spot palladium increased 1.8% and platinum by 1.9%, to $1,875.35 an ounce. (Reporting and editing by Vijay Kishore in Bengaluru, Anmol Choubey from Bengaluru)
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World Bank predicts resilient growth for the global economy in 2026, despite tariffs. However, fading dynamism is also predicted.
The World Bank warned on Tuesday that the global economy has been more resilient than anticipated, and 2026 GDP growth is expected to be slightly higher than forecasts made in June. World Bank's Global Economic Prospects Report shows that the global output will grow at a slower pace this year, from 2.7% to 2.6% in 2025. It will then return to 2.7% by 2027. The 2026 forecast GDP is two-tenths a point higher than the previous predictions made in June, and 2025 will see growth exceeding the previous forecast by four tenths a point. The World Bank said that two-thirds (or about a third) of the upward revision is due to the better-than expected growth in the U.S., despite tariffs-driven trade disruptions. The World Bank?predicts that U.S. growth in GDP will reach 2.2% by 2026, up from 2.1% in 2020, and two-tenths of a percentage point higher than the June forecasts. The World Bank stated that after an early import surge in '2025 to beat tariffs held back U.S. economic growth, a larger tax incentive will help growth in '2026. This will offset the drag of tariffs, both on consumption and investment. The global lender warned that if current projections hold true, the 2020s will be the slowest decade in global growth since 1960s. This is too low to avoid stagnation and unemployment?in developing and emerging markets. Indermit Gil, World Bank chief economist, stated that "with each passing year the global economy is less capable of generating economic growth, and appears to be more resilient to policy uncertainties." "But economic dynamism and resilient cannot diverge long without fragmenting public finance and credit market." The growth rate in emerging markets and developing countries?will be 4.0% by 2026, down from 4.2%. This is a decrease of?two tenths & three tenths respectively from June's forecasts. The World Bank stated that excluding China, this group's growth rate in 2026 will remain at 3.7%. This is unchanged from the previous year. China's economy will grow at a slower rate of 4.4% by 2026, down from 4.9%. However, the forecasts have both increased four-tenths a percentage points since June because of fiscal stimulus and an increase in exports to markets outside the United States. (Reporting and editing by Paul Simao; David Lawder)
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The Russian energy tax is calculated using the indicator oil price, which has fallen to a 79-month-low.
Data from the Russian government showed that last month, the indicative price of crude oil, used by it to calculate taxes payable by energy companies, fell to its lowest level since May 2020. This indicates a shrinking in state revenue. State energy revenues, mainly from the mineral extract tax calculated using the monthly average indicative price set up by the government, dropped?by 22 percent from January to November of 2025. They are on track to be at their lowest level since 2020. The Economy Ministry said that the 'indicative price' for December 2025 taxes would be $39 per barrel, down $45 from November. The price for the indicative blend is based on market prices of Russia's Urals oil and more expensive ESPO blends. Due to 'Western sanctions,' Russian oil is sold at a discounted price internationally. The average indicative price dropped to $55.60 per barrel in 2025 from $67.90 a year earlier, which is below the $58 budgeted. The budget for 2026 was drafted by the government using the $59 barrel as the average indicative price. The average indicative price in December 2025 is used to calculate the taxes payable in January 2026. Reporting by Darya Kosunskaya, Writing by Gleb Brynski, Editing by David Goodman
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Gold nears record of $4,600/oz before US inflation data
Gold prices were mostly stable near their peak on Tuesday. Supported?by fears over Russia's intensified attacks on Ukraine, and the situation in Iran. Investor caution before key inflation data restricted upside momentum. As of 1315 GMT spot gold was trading 0.2% higher, at $4,601.63 an ounce, after hitting a new record high of $4.629.94 the previous session. U.S. Gold Futures for February Delivery fell 0.1% to $4610.30. Investors' attention on the U.S. CPI data released later in the day and a modest recovery of the U.S. Dollar, fueled by hawkish remarks from a senior Fed Official, act as a headwind for gold, according to ActivTrades Analyst Ricardo Evangelista. John Williams, President of the Federal Reserve Bank of New york, said that there is no immediate pressure on the central bank to change its stance in monetary policy. Investors expect two interest rate cuts in 2019. Today's Consumer Price Index (CPI) data will provide more clues about monetary policy moving forward. The geopolitical front saw Russian forces launch the most intense missile attack on Ukraine this year early Tuesday morning, killing four and injuring many others. U.S. president Trump announced on Monday that any country doing business with Iran will be subject to a 25% tariff when trading with the United States. Non-yielding investments tend to perform well when interest rates are low and geopolitical risks or economic risks increase. "With gold prices consolidating over $4,500, supported by a negative outlook for the dollar - and ongoing geopolitical uncertainties, the $5,000 level appears to be within reach, and could even be tested during the first half of 'year," Evangelista said. CME Group, the U.S. exchange operator, announced on Monday it would change the way that it sets margins in precious metals. This is to ensure adequate coverage of collateral due to the current market volatility. Silver spot gained 2.3%, to 86.94 dollars per ounce after reaching a record-high of $87.16. After reaching a record high of $2,478.50 per ounce on December 29, spot platinum increased 0.4% to $2352.89 an ounce. Palladium rose 0.3%, to $1.847.25 an ounce. (Reporting and editing by Sharon Singleton in Bengaluru, and Louise Heavens.)
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TotalEnergies CEO: Return to Venezuela is not on the agenda
The chief executive of TotalEnergies, a French oil company, said that the company would consider returning to Venezuela. However, it is not a top priority. "People want a quick return to Venezuela, but it's going to take some time to get a clear investment framework in place. TotalEnergies left Venezuela in 2021. Pouyanne pointed to 'the high capital investment needed to produce and transport Venezuelan heavy crude oil, and to manage greenhouse gas emissions. Pouyanne stated that adding 100,000 barrels a day would require an additional $100 billion. The CEO stated, "We will look at it, we'll be sure to see. We are always evaluating. But, this is not something that's high on my list." Donald Trump has called on U.S. energy firms to invest $100 billion in Venezuela's oil industry. He warned to keep the?U.S. Exxon, the oil giant, has been ordered to leave Venezuela after its CEO Darren Woods said that it was "uninvestable". Woods also stated that Venezuela would have to change laws and protect investment before Exxon could commit to operating in Venezuela.
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Davos starts a new era of grappling with the global order shaken up by Trump
Next week, business and political leaders will be attending the World Economic Forum annual meeting in Davos to test their?vision for a global economic order based on rules. The expected appearance of U.S. president Donald Trump in the Swiss mountain resort highlights the difference between his agenda, and the consensus-driven approach taken by the WEF. It has been criticized for years that the WEF is just a rich people's talking shop. His "America First' policy has resulted in trade tariffs as punishment, military interventions in Venezuela, threats to take over Greenland and a retreat by the U.S. from international cooperation on climate change, health, and other global issues. The Trump administration also threatened Federal Reserve Chairman Jerome Powell with criminal charges, which prompted many central bankers and other top officials to release a statement in support of Powell and central bank independence. The leaders of the?WEF have dubbed their 56th edition, "A Spirit of Dialogue", saying that in the current climate of uncertainty, it is important to come together and map out the way forward for business and politics. Borge Brende is the CEO of WEF and a former Norwegian Minister. He said: "Dialogue isn't a luxury. It is a necessity." Others say the WEF is at risk of obsolescence because the U.S., China and other countries are leveraging their power to serve national interests. Who will be the one to make the case for a rules-based order? Daniel Woker is a former Swiss Ambassador and expert in foreign relations. It has no purpose to exist, to be blunt. In a system in which everyone only looks out for themselves. It's a past event." Davos watchers also wonder if the event has lost its momentum since its founder, Klaus Schwab, 87 years old, stepped down from his position as chairperson in April. In August, the Geneva-based organization said that an internal investigation found no evidence of material misconduct by Schwab after a whistleblower's letter alleging misconduct. The interim co-chairs were named as BlackRock CEO Larry Fink, and Roche vice chair Andre Hoffmann. There is much to talk about in this latest forum, from Trump's Monroe Doctrine, which establishes U.S. dominance in the Western Hemisphere, to how artificial intelligence will change the world. The forum comes after one of Switzerland’s worst tragedies in recent history, a bar fire at a ski resort that killed 40 people. OIL MAKES a Comeback The WEF's pre-event presentations have put a brave front on the global turmoil, showing how companies are adapting to the highest U.S. Tariff rates since the Great Depression, and hinting at a easing of the trade tensions by late 2025. A WEF survey released last week revealed that business in 2025 will be more difficult. The survey also showed a bleak picture of the cooperation on peace and security. As several European leaders are expected to attend, attention will be focused on their response to U.S. challenges. This includes Trump's threats of taking over Greenland and attacks on European efforts in regulating American?tech companies. Christy Hoffman, the General Secretary of UNI Global Union, which represents 20 million?service sector workers around the world, said that politicians must stand firm and address how AI, new technologies, and other factors impact jobs. The WEF meeting this year will feature top oil executives who are eager to hear Trump promote his energy dominance program, which encourages them drill for more oil while snubbing alternative sources like wind and solar. Exxon Mobil CEOs, Shell CEOs, TotalEnergies CEOs, Equinor CEOs and ENI's are expected to attend after sporadic participation in previous years when oil players viewed the forum as being anti-fossil. It is yet to be seen if China, who has in the past sent high-ranking officials to Davos, will have a large presence. (Additional reporting from Selena Li, in Hong Kong; Dmitry Zhdannikov, Mark John and Alexander Smith in London)
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The prospect of $5,000 in gold is a reality with a record start in 2026
The upward trend in gold and silver has resumed. Bullion is now above $4,600 per ounce, and brokerages are predicting $5,000, as a number of factors intensify and boost the metals' safe-haven appeal. On Monday, spot gold reached a high of $4,629.94?per?ounce, while silver rose to a new record of $86.22/oz during the same session. Metal has gained over 6% in only 13 days for 2026 after breaking multiple milestones last year and gaining 64 %. Major brokerages predict that gold will reach $5,000/oz by 2026. They expect safe-haven demand due to geopolitical tensions, monetary policy ease, ETF inflows, and central bank purchases to continue the momentum of last year. GEOPOLITICAL AND MACRO DRIVERS Gold's record-high?on Monday was fueled by concerns over the independence of Federal Reserve Chair Jerome Powell after he said that the Trump administration threatened him with a?criminal investigation. The U.S. military raid that led to the capture of Venezuelan President Nicolas Maduro, Donald Trump's threat to "take control" of Greenland, and Trump's consideration of whether or not to intervene with the unrest in Iran have all contributed to the current political uncertainty. Ross Norman, an independent precious metals analyst, said: "Real assets are at the forefront in the type of environment we're examining." "The rules have been thrown out the window." "Precious metal reflects all that." Gold also benefits from the expectation of U.S. rate cuts which would reduce the opportunity costs of holding non-yielding investments like gold. Tim Waterer is the chief market analyst at KCM Trade. He said that if current geopolitical risk persists and U.S. interest rate expectations remain unchanged, gold could attempt to break through $4,600 more consistently in the weeks ahead. ETF INFLLOWS AND CENTRAL BBANK BUYING Analysts said that the demand for gold by central banks has been high for four years, and will likely continue to be so until 2026. This demand is also expected to increase due strong investment demand. China's central banks extended their gold buying spree for a 14th consecutive month in December, bringing the total to 74.15 millions fine troy-ounces. World Gold Council reports that the annual inflows to physically backed gold ETFs (exchange-traded funds) reached $89 billion in 2018, the highest ever. On?December 29th, the holdings of gold-backed ETFs such as New York's SPDR Gold Trust topped 1,073.41 tons, their highest level in over three years. Silver continues to gain momentum. Its 147% increase in value last year was a result of a robust investment market, the inclusion of silver on the U.S. Critical Minerals?list, which led to a substantial outflow from stocks in the U.S. Soni Kumari, ANZ's commodity strategist, said: "It is likely that the market will experience volatility and if everything remains as it is now, I believe prices will soon push towards $90/oz." Metals Focus, a consultancy, said that a?three-digit price peak for silver is likely this year. Silver's smaller size market amplifies the price movement when it benefits from macroeconomic factors that drive gold investment. HSBC predicts that silver will trade between $58-$88 per ounce by 2026. However, they warn of a possible market correction as supply restrictions ease.
Six dead in Gaza as displaced people struggle to hold their ground during torrential downpour
Local health officials reported that a rainstorm hit the Gaza Strip Tuesday, causing hundreds of tents to flood, homes to collapse and kill six people.
Five people, including a girl and two women, were killed when houses collapsed near Gaza City beach. A one-year-old child died from extreme cold in his tent in Deir Al-Balah, central Gaza.
Some tents flew dozens of metres before hitting the ground. Families scrambled for what they could salvage as others lay crumpled on muddy pools. Residents tried to secure remaining shelters by hammering loose pegs in and stacking sandbags along the edge to prevent floodwaters from pouring into them.
"We did not realize what was going on until the concrete wall began to collapse. It was an eight-meter high wall. The wall collapsed on us and three tents because of the force of the wind.
"The elderly man was martyred. He said that his son's wife and daughter were both killed.
Israeli forces ordered the near total?depopulation? of Gaza three months after a ceasefire ended major combat. This forced its 2 million residents into a small strip of land near the coast, where they live in tents and damaged buildings.
MORGUE: RELATIVES GATHER TO MORGUE
On Tuesday, dozens of relatives gathered in a hospital's morgue to offer special prayers for the bodies that were laid out on stretchers prior to funerals.
Hamas' Gaza Government Media Office reported that at least 31 Palestinians have died since the beginning of winter due to exposure to cold, or collapsed buildings damaged by previous Israeli attacks.
The report said that 7,000 tents had been damaged over the last 48 hours. Most of their occupants are without alternative shelter.
Officials from the municipal and civil defence?systems claimed that they could not cope with this storm due to fuel shortages and damaged gear. During the war, Israel destroyed hundreds of vehicles that were needed to respond to a weather emergency. These included bulldozers, water pumps and other equipment.
A U.N. report from December said that 761 sites of displacement, which housed about 850,000 people, were at high-risk of flooding. Thousands of people had already moved to avoid heavy rain.
U.N. officials and Palestinian officials have said that at least 300,000. new tents are urgently required for the approximately 1.5 million people who remain displaced. The majority of existing shelters have worn out or are made from thin plastic sheets and cloth.
In a Tuesday post on X, UNRWA (the U.N. Palestinian Refugee Agency) said that the winter weather in Gaza is adding to the misery of families who have already been pushed to the edge by two years of conflict.
It added that "Flooding and cold temperatures?as well as damaged shelters?are exposing people to new dangers, while access for humanitarian aid remains severely restricted."
Hamas issued a statement Tuesday urging mediators to force Israel to accept the unconditional flow and distribution of shelters, rebuilding materials, and aid in Gaza. The ceasefire agreement began in October.
Israel claims that hundreds of trucks are entering Gaza every day with food, medical supplies, and shelter equipment. The international aid agencies say that the supplies are not enough. (Reporting and editing by Peter Graff. Dawoud Ab Elkas and Nidal Al-Mughrabi)
(source: Reuters)