The IMF slashes global growth forecasts
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The IMF is NVO. That stands for Not Very Optimistic. Live from the UK, this is the Marketplace Morning Report from the BBC World Service. I'm Gideon Long, in for Leanna Byrne.

Good morning. The IMF, the International Monetary Fund, has given its assessment of the global economy. And it's not pretty. The fund has slashed its forecast for world growth to 2.8%, down from the 3.3% it was predicting just three months ago. It describes Donald Trump's tariffs as a major negative shock to growth. The BBC's Mariko Oi is in Singapore. Hi, Mariko. Hi, Gideon. So let's start with China. The IMF, pretty

pretty big downgrade from 4.6% back in January to 4% now. I guess that is primarily due to tariffs, right? Yes, I think it's fair to assume that. I mean, you know, it's not just China, is it? It's practically every country almost on the planet that has seen this downgrade. And it's all because of those tariffs that were announced on what the White House would like to call Liberation Day,

where they announced all these new tariffs. Some of them have been paused until early July. But of course, the ones on China have gone ahead. And also, there are other tariffs on cars imported into the United States and so on and so on. But I think everyone has realized as soon as Mr. Trump made that announcement that the key target is China. And as a result of that, China is seeing this growth forecast by the IMF significantly lowered.

And has there been any reaction from Beijing to the IMF downgrade? Because as you say, that's now a one percentage point gap between what the IMF says the Chinese economy will grow at and what China says it will grow at. Beijing has been quite tight-lipped about all the tit-for-tat on these tariffs. There have been various announcements from Beijing. They have stuck with one simple message. They don't agree with it. They will challenge it. They will retaliate. They took the very kind of aggressive stance.

Whereas the rest of Asia, for example, they took a more nuanced approach where they wanted to negotiate with Washington. Some economies, smaller economies like Vietnam, for example, lowering their own import duties on American products entering their own country in order to maybe hoping to win some favor from Washington. And Japan, a downgrade from 1.1% to 0.6%, pretty low.

Yeah, I mean, I think with Japan's economy, we've been talking about its very slow growth for a long, long time and finally started to pick up. But it's actually been hit pretty hard by those tariffs, the 25% tariffs on all cars being imported into the United States.

That kicked in and that is staying. And that's really affecting Japanese car makers, as well as that blanket tariffs on steel and aluminium also affecting Japanese businesses. So for one of the closest allies and friends of the United States in this part of the world, Japan has been hit pretty hard. The BBC's Mariko Oi. Thanks for joining us on Marketplace. Thank you. Let's do the numbers.

Not a bad day on the stock markets. In Japan, the Nikkei ended 1.9% higher and Hong Kong's Hang Seng added 2.2%. European markets have opened higher too, with Germany's DAX up over 3%.

Now, faced with a potential loss of revenue from exports, China is trying to stimulate its domestic consumption. One group that it's targeting is retirees. It's trying to get them to travel more inside China. So it's set up what it calls silver trains, specially designed to give older people an opportunity to spend more. The BBC's Stephen Macdonald took a trip.

The karaoke microphone is being passed around and the cocktail preparations are in full swing. On board one of the new silver trains, named this way because of the hair colour of the passengers, is Daniel Ling. Along with a group of his retired friends, he's tucking into a plate of barbecued goose, washed down with Chinese white spirit alcohol.

Thank you.

These silver trains are an attempt to turn an economic problem into an economic solution. Every year the proportion of older people here becomes greater with lower birth rates, making it harder for the economy to sustain them. But what if specialist trains could take retirees with plenty of time and cash to places they've never been where they could spend some of their retirement money and boost the local economy?

Dr Huang Huang, research associate from the China Tourism Academy, has been studying the potential impact of this plan. The main places where the silver trains will stop are rural areas or small towns with less developed economies. Though these big city travellers will consume various products on the trains,

After they pool into a station, they will also visit tourist attractions and traditional villages. It has huge development potential. In Baisha, built by the Naxi ethnic minority, our retirees are off the train and checking out the modest street stalls at the bottom of old two-storey wooden houses. In the street on Standing Inn, you can buy cured meats...

potatoes with spicy sauce, fresh orange juice, lamb and the clothing of the local Naxi people. If only the smallest percentage of China's retirees take a silver train, this can mean millions of ticket sales. Yet even with growth of this magnitude, these trips alone are not going to fix China's difficulties with low consumer spending. The problem is just too big.

However, economists would say at least it's a step in the right direction. In China, I'm the BBC's Stephen McDonnell for Marketplace. And finally, four people are due to be sentenced in Nairobi, Kenya for smuggling an unexpected type of exotic animal, live ants. Authorities stopped the group from trafficking about 5,000 queen ants out of the country for pet markets in Europe and Asia. In the UK, I'm Gideon Long with the Marketplace Morning Report from the BBC World Service.

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