🌍 The IMF isn’t too cheerful

🗺️ AROUND THE WORLD

1. 🇨🇳 China: Australia’s foreign minister Penny Wong encouraged Australian exporters to diversify away from China yesterday (Wednesday), citing the difficulty in separating the countries’ economic and strategic issues.

2. 🇩🇪 Germany: Berlin will fail to fulfil its NATO pledges despite an increase in defence spending, according to a leaked memo. Germany had promised to deliver a fully-equipped army division to NATO by 2025.

3. 🇮🇳 India: At least four people have died after gunmen opened fire inside an Indian army base close to the Pakistani border. Indian authorities believe the shooting was not terror-related, but have declined to share additional information at this stage.

4. 🇧🇷 Brazil: President Lula da Silva has landed in China after his previous trip was delayed due to illness. Lula is looking to deepen Brazil’s ties with China, its largest trading partner since 2009.

5. 🇹🇩 Chad: Germany has expelled Chad’s ambassador in retaliation for the expulsion of its own top diplomat to Chad. Germany’s ambassador had recently criticised the country’s military junta.

🏦 IMF | GLOBAL ECONOMY

The IMF warns of lower growth ahead

Briefly: Optimism doesn’t come naturally to global bodies like the IMF, but Tuesday’s World Economic Outlook was particularly bleak. The IMF’s medium-term outlook is now the weakest in over 30 years.

Of particular concern is the IMF’s belief that inflation won’t return within target ranges before 2025. Despite falling food and energy prices, core inflation remains sticker than a popsicle on a hot summer’s day. So central bankers feel the need to jack up interest rates to cool down their over-heating economies.

But IMF economists also highlighted a new threat to global growth: “geoeconomic fragmentation”. In short, this means that as tensions between global powers increase, cross-border trade and international investment will suffer, to the detriment of outward-looking regions such as Asia.

Intrigue’s take: After a period of encouraging economic news, the IMF’s report is a bit of a bummer. And these forecasts matter. Boardrooms and cabinets often watch them closely, tightening their belts in anticipation of tougher times. But this, in turn, can bring on the very slowdown being warned of.

Still, the IMF isn’t the only one shaping expectations like this. On Tuesday, US Treasury Secretary Janet Yellen effectively told everyone to take a chill pill, saying “the outlook is reasonably bright.”

Ultimately, time will tell which of the two assessments the world believes most, because that’ll shape which of the two futures we get.

Also worth noting:

• Annual US inflation for March eased to 5%, the lowest figure in nearly two years.

• Famous investor Warren Buffett recently sold most of his shares in Taiwanese semiconductor giant TSMC, noting that geopolitical tensions were “certainly a consideration”.

Today’s briefing is sponsored by Hubspot

🇲🇲 MYANMAR | MILITARY JUNTA

Myanmar’s ruling junta confirms deadly airstrike on village

Briefly: Myanmar's ruling military junta has sought to justify Tuesday’s deadly attack on a village in the opposition stronghold of Sagaing, claiming anti-regime fighters were present. The attack left more than 100 people dead.

Villagers had gathered to open a new office of the National Unity Government (NUG), the coalition seeking a return to civilian rule. Children were reportedly dancing when a fighter jet and helicopter gunship attacked.

The junta has ruled Myanmar for most of the past 60 years, claiming it’s the only institution capable of holding the diverse country together. But the NUG called for a national uprising in September 2021, after the junta ousted the country’s democratically-elected government earlier that year.

Analysts say the junta’s airstrikes are a show of weakness rather than strength: as the military loses ground across the country, it’s having to resort to air power.

Intrigue’s take: The world will be watching how key regional body ASEAN (the Association of Southeast Asian Nations) responds to all this. Beyond banning the junta from its summits and issuing a 5-point plan (which Myanmar has ignored), it’s been pretty muted to date.

Many hope this will change at next month’s ASEAN summit in Indonesia. It’s an opportunity to put some substance behind the cherished principle of ASEAN centrality, which emphasises ASEAN’s role in the region’s global engagement. If not, ASEAN centrality risks becoming little more than a slogan.

Also worth noting:

• Hours after the attack, ASEAN tweeted Thingyan new year’s greetings to the people of Myanmar. The ASEAN chair condemned the attack two days later.

• Russia and China blocked the UN Security Council from condemning the attack. A UN report accuses Russia and China of supplying Myanmar’s junta with weapons.

👀 EXTRA INTRIGUE

Here’s what we’re reading on venture capital and start-ups:

• Silicon Valley investors are looking at opportunities in the Middle East.

• Funding for Brazilian start-ups fell by more than 80% last quarter.

• Why data analytics is failing decision makers, from our friends over at bulletpitch – subscribe here for a deep dive on a new start-up delivered to your inbox every week.

• Unicorn companies have returned to being a rarity.

📜 ON THIS DAY IN HISTORY

On this day in 2002…

… a Venezuelan military coup was thwarted after only one day. A separate military intervention then restored President Hugo Chavez to power the following morning.

🗳️ POLL TIME!

Yesterday’s poll: What lesson do you think we should draw from the role of Russian intel in Ukraine?

🟩🟩🟩🟩🟩🟩 ✋ Don't let foreign intel agencies get a foothold (49%)

🟨🟨🟨🟨⬜️⬜️ 🌤️ Democracies have a long-run advantage over autocracies (33%)

🟨⬜️⬜️⬜️⬜️⬜️ 💪 Don't mess with Ukraine (14%)

⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (5%)

Your two cents:

• ✋ B.B. “Of course nobody should allow foreign intel to shape public opinion or even policy. The trick is identifying them early enough to prevent them from doing just that.”

• ✍️ T.B: “Democracies are just as fallible as autocracies when it comes to misinterpreting information. The lesson is to have proper institutions in place to capitalise on the information at hand”