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China says it will take targeted steps to support the economy

China will broaden its tax credit rebates, postpone social security payments and loan repayments, roll out new investment projects and take other steps to support the economy, state television quoted the cabinet as saying on Monday. Chinese policymakers have pledged to step up support for the world’s second-biggest economy, hit by COVID-19 outbreaks that have prompted stringent restrictions, disrupting supply chains and hitting production and consumption. China aims to bring its economic operations back onto a normal track with a package of targeted, forceful and effective measures, the cabinet said. ...

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A major shift in the economic narrative could be underway

The overarching narrative of the markets and economy has been one of strong demand meeting lagging supply, a dynamic that has caused inflation to surge. While most signs suggest these trends continue to persist, a handful of anecdotes from the past week suggest this narrative could be changing. Signs that inventories are no longer depleted Supply chain disruptions have been reflected by depressed inventory/sales ratios. In fact, many businesses have been complaining that sales would be stronger if only they could keep their shelves stocked. According to a Census Bureau ...

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China can offset effects of Fed’s rate hikes

Since the international monetary system is dominated by the dollar, the US Federal Reserve’s rate hike is bound to have a spillover effect on other economies and constrain the maneuvering space for their monetary policy to varying degrees. Yet the impact of the Fed’s rate hike has been declining on China, due to the latter’s autonomous monetary policy. Still, the People’s Bank of China needs to stabilize the macroeconomy through balanced monetary policy, especially since expanding monetary credit and reducing cost of capital are its two important intermediary goals. According ...

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BoE’s COVID policy not to blame for inflation, Bailey says

Britain’s current surge in inflation is not the fault of the Bank of England and the stimulus it provided during the COVID-19 pandemic, Governor Andrew Bailey said on Monday. “What I reject is the argument that in our response to Covid the Bank’s Monetary Policy Committee let demand get out of hand and thus stoked inflation. The facts simply do not support this,” Bailey said at a conference on inflation hosted by Austria’s central bank. Source: Reuters (Reporting by Francois Murphy, writing by David Milliken, editing by Andy Bruce)

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Germans are suffering large cuts in real pay – Bundesbank report

Workers in Germany are experiencing large cuts in their purchasing power as modest pay rises fail to keep up with record-high inflation, the country’s central bank said in a report on Monday. In its monthly report, the Bundesbank also said upcoming wage negotiations will need to balance an uncertain economic outlook and concerns about job losses with persistently high inflation and labour shortages. It said the economy should still be growing slightly this quarter, but it warned of headwinds from the rising cost of living and the fallout of Russia’s ...

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U.S. households felt financially flush going into 2022, Fed survey shows

U.S. households reported their highest level of financial well-being since tracking began almost a decade ago and the gains were felt across all racial and ethnic groups, a Federal Reserve report released on Monday showed. The U.S. central bank’s annual “Survey of Household Economics and Decisionmaking” also showed workers enjoying the benefits of working from home even as the recovery from the coronavirus pandemic continued, with little fervor to return to the office and general bullishness about the labor market. The report provides “valuable insight into Americans’ financial conditions during ...

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German Ifo improved in May

The gradual return of optimism continues but only if the focus is limited to the very short run. Germany’s most prominent leading indicator, the Ifo index, just increased for the second month in a row to 93.0 in May, from 91.9 in April. The increase was mainly driven by an improved current assessment. The expectations component remained almost unchanged and close to levels last seen at the start of the pandemic. This good Ifo reading seems to reflect filled order books and post-lockdown improvements but we remain cautious. Weak expectations ...

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U.S. Economic Growth Gained Momentum in April — Chicago Fed

The U.S. economy continued to expand in March, picking up pace compared with the previous month, according to data from the Federal Reserve Bank of Chicago released Monday. The Chicago Fed National Activity Index rose to 0.47 in April from a revised 0.36 March, broadly in line with the 0.50 consensus forecast from economists polled by FactSet. April’s positive reading signals that economic growth was above its historical trend. The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad ...

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Cold beer to your door: brewers in Latin America go direct

With COVID-19 lockdowns normalising home delivery of everything from fast food to aspirin, brewers are tapping into a lucrative new sales format – delivering cold beer on demand to consumers still gathering at home with friends even as bars reopen. For Brazilian Rafael Mazaia, it is cheaper to order beers for delivery to his home than to drive to the supermarket to pick up a pack and risk them being tepid when he returns. “There is no supermarket near my house, I’m too lazy to go to the market and ...

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India’s inflation fight will hurt growth, risks wider fiscal gap

India’s export duty hikes and tax cuts will likely hurt economic growth and raise the chances of the fiscal deficit widening, but do little to bring down retail prices within the central bank’s tolerance level, economists and industry officials said. Over the past month, India’s fiscal and monetary policy have U-turned from being growth-focused to honing in on inflation – with the central bank raising the key interest rate by 40 basis points, and the government cutting taxes on fuel and disincentivising exports. “The measures announced mark a tacit admission ...

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China’s stable economic growth is of great significance to global recovery: WEF president

China’s stable economic growth is of great significance to global recovery and “what happens in China, of course has huge impact on the rest of the world, and vice versa,” World Economic Forum (WEF) President, Borge Brende, said in an interview with Xinhua News Agency. The WEF 2022 Annual Meeting will be held in Davos, Switzerland, from Sunday to Thursday. It will focus on the unprecedented global challenges governments are currently facing, including post-pandemic recovery, the Ukraine crisis and climate change. In the face of the COVID-19 pandemic, China’s economic ...

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ECB rate hikes in July, Sept, likely a done deal: Villeroy

European Central Bank rate hikes in July and September are essentially a done deal, French policymaker Francois Villeroy de Galhau said on Monday, just hours after ECB chief Christine Lagarde made the case for the moves. “If you look at President Lagarde’s statement this morning, the deal is probably done because there is a growing consensus,” Villeroy told a panel at the World Economic Forum. Earlier on Monday Lagarde said that rate lift-off in July was likely and the minus 0.5% deposit rate could be out of negative territory by ...

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Innovation drive expected to help boost recovery

China’s intensified efforts to unleash the power of innovation in driving development are expected to inject fresh impetus into world economic recovery, boost the digital transformation of traditional industries and promote higher-level trade and investment, according to experts and business leaders. The key to globalization lies in invigorating the vitality of the global economy, which needs to break down trade barriers and bolster innovation in the industrial chain, along with advancing science and technology and integrating innovative technologies with the real economy, industry analysts said. Senior executives of multinationals said ...

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Why shared principles and collective action are the building blocks of a sustainable, global economy

Keng Sreymom, 36, lives with her aunt in one of the floating villages on Tonle Sap, the largest freshwater lake in southeast Asia. For centuries, thousands of Cambodian families have lived and worked here. The country depends on their work which yields 500,000 tons of fish in a typical year and provides more than two-thirds of the protein in Cambodian’s diet. The combined effects of deforestation, climate change, upstream hydropower dams and overfishing have dramatically reduced the region’s fish populations over the past few years and threaten the region and ...

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Economic storm looming, business and government leaders warn in Davos

Multiple threats to the global economy topped the worries of the world’s well-heeled at the annual Davos think-fest on Monday, with some flagging the risk of a worldwide recession. Political and business leaders gathering for the World Economic Forum (WEF) meet against a backdrop of inflation at its highest level in a generation in major economies including the United States, Britain and Europe. These price rises have undermined consumer confidence and shaken the world’s financial markets, prompting central banks including the U.S. Federal Reserve to raise interest rates. Meanwhile, the ...

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