Charting the Global Economy: Middle Class Ranks Shrank in 2020
Commuters wearing protective masks exit the Chhatrapati Shivaji Maharaj Terminus railway station in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Charting the Global Economy: Middle Class Ranks Shrank in 2020

The ranks of the world’s middle class shrank last year for the first time in a decade because of the coronavirus pandemic, with emerging economies more at risk of an extended fallout.

Meanwhile, Federal Reserve policy makers remained committed this week to standing pat on interest rates for an extended period and letting the economy and inflation run a little hotter. In Japan, the central bank is attempting to become more flexible in its drive to spur inflation.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

Charting the Global Economy: Middle Class Ranks Shrank in 2020

The global middle class shrank last year for the first time in decades because of the Covid-19 pandemic, with almost two-thirds of households in developing economies reporting they suffered a loss in income, according to two new estimates based on World Bank data.

U.S.

Charting the Global Economy: Middle Class Ranks Shrank in 2020

Federal Reserve officials, after this week’s policy meeting, continued to project a near-zero benchmark interest rate through 2023 even though they upgraded their economic outlook.

Charting the Global Economy: Middle Class Ranks Shrank in 2020

Early March results for manufacturing shows activity is gaining even more strength. The Philadelphia Fed’s latest survey of factories showed conditions in the bank’s region jumped to the highest since 1973, while a measure of prices paid for materials soared to a 41-year high. The results were consistent with a New York Fed report that showed the fastest pace of manufacturing growth since late 2018.

Europe

Charting the Global Economy: Middle Class Ranks Shrank in 2020

U.K. government borrowing totaled 19.1 billion pounds ($26.6 billion) in February, reflecting the cost of supporting the economy through a third lockdown to fight the coronavirus. Net debt climbed to 97.5% of GDP, near the highest since the early 1960s.

Charting the Global Economy: Middle Class Ranks Shrank in 2020

Denmark’s central bank is switching from operating one negative interest rate to three, joining several other peers that have overhauled frameworks in a bid to fine-tune their policy levers.

Asia

Charting the Global Economy: Middle Class Ranks Shrank in 2020

The Bank of Japan unveiled a set of carefully crafted policy tweaks aimed at giving itself more flexibility to keep up its long quest to revive inflation.

Emerging Markets

Charting the Global Economy: Middle Class Ranks Shrank in 2020

Russia’s central bank carried out a surprise rate hike, with policy makers in Brazil and Turkey also raising rates.

Charting the Global Economy: Middle Class Ranks Shrank in 2020

Kenya was the only country in sub-Saharan Africa where remittances from foreign workers increased in 2020, as the global economic devastation caused by the Covid-19 pandemic disrupted incomes and flows, according to the African Development Bank.

©2021 Bloomberg L.P.

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