Chinese recovery from lockdowns shows signs of fizzling out as central bank cuts interest rates
Global oil prices have dropped amid concerns over weaker growth in the Chinese economy caused by repeated Covid lockdowns and a downturn in the property sector.
A barrel of Brent crude fell by about 5% to below $94 (£78) on Monday, hitting the joint lowest levels since the Russian invasion of Ukraine as traders reacted to weaker figures from the world’s second-largest economy.
Continue reading...Outbound shipments grew 18% after struggle with shortages of raw materials and lockdowns in first half of year
China’s export industries performed strongly last month after spending the first half of the year hampered by shortages of raw materials and pandemic-related lockdowns at major ports.
Offering an encouraging boost to the economy, outbound shipments grew 18% in July from a year earlier, the fastest pace this year, official customs data showed on Sunday, beating analysts’ expectations for a 15% gain, though imports remained sluggish.
Analysts had expected exports to fade amid growing signs that Europe, the US, UK and Australia are heading for recession, dampening the outlook for global consumption.
Sharpest contraction is in energy-intensive industries, such as petrol, coking coal and ferrous metals
China’s factory activity unexpectedly shrank in July as sporadic Covid outbreaks disrupted the sector and the slowing global economy weighed on demand.
The official manufacturing purchasing managers’ index (PMI) fell to 49.0 in July from 50.2 in June, China’s National Bureau of Statistics said on Sunday. That was weaker than forecast, below the 50-point mark separating expansion from contraction.
Continue reading...Problems in the US, China and eurozone will result in first contraction since start of pandemic, report says
The International Monetary Fund has slashed its growth forecasts for the next 18 months after warning that the world’s three biggest economies are all stalling and inflation is higher than previously forecast.
In a downbeat update to its April world economic outlook (WEO), the IMF said problems in the US, China and the eurozone had resulted in global output falling in the second quarter of this year – the first contraction since the start of the Covid-19 pandemic.
Continue reading...Analysis: claims by ex-chancellor about Foreign Office weakness towards Beijing look like an attempt to head off a similar attack on him
Rishi Sunak’s pre-emptive strike attacking Liz Truss over alleged Foreign Office pusillanimity towards China looks to have been a daring attempt to fend off an imminent assault from his Tory leadership rival.
But it locks the contestants into a potentially uncontrollable dogfight as they seek to prove their credentials as the truer enemy of authoritarianism.
Continue reading...Shipping of millions of tonnes from blockaded Black Sea ports could avert global food crisis
Ukraine and Russia have signed a UN-backed deal to allow the export of millions of tonnes of grain from blockaded Black Sea ports, potentially averting the threat of a catastrophic global food crisis.
A signing ceremony at Dolmabahçe Palace in Istanbul was attended by the UN secretary general, António Guterres, and Recep Tayyip Erdoğan, Turkey’s president, who had played a key role during months of tense negotiations.
A coalition of Turkish, Ukrainian and UN staff will monitor the loading of grain on to vessels in Ukrainian ports before navigating a pre-planned route through the Black Sea, which remains heavily mined by Ukrainian and Russian forces.
Ukrainian pilot vessels will guide commercial vessels transporting the grain in order to navigate the mined areas around the coastline using a map of safe channels provided by the Ukrainian side.
The vessels will then cross the Black Sea towards Turkey’s Bosphorus strait while being closely monitored by a joint coordination centre in Istanbul, containing representatives from the UN, Ukraine, Russia and Turkey.
Ships entering Ukraine will be inspected under the supervision of the same joint coordination centre to ensure they are not carrying weapons or items that could be used to attack the Ukrainian side.
The Russian and Ukrainian sides have agreed to withhold attacks on any of the commercial vessels or ports engaged in the initiative to transport vital grain, while UN and Turkish monitors will be present in Ukrainian ports in order to demarcate areas protected by the accord.
Continue reading...Shutdown of cities takes its toll, while property market remains in crisis and global outlook darkens
China’s economic growth has slowed sharply in the second quarter of the year, official data showed on Friday, highlighting the colossal toll from widespread Covid lockdowns and casting doubt over whether its pre-ordained growth target can be met.
Output contracted by 2.6% between April and June compared with the previous quarter, the statistics bureau said, prompting many economists to revise their predictions for the world’s second biggest economy.
Continue reading...Body revises economic forecast and says outlook for EU and eurozone heavily dependent on course of war
Europe’s economy faces the twin blows of slower growth and higher inflation as it struggles to deal with the fallout from Russia’s invasion of Ukraine, the European Commission has warned.
In its summer forecast, the governing body in Brussels said the “protracted war” was sending shockwaves through the eurozone and the wider EU, leading to a marked slowdown in activity next year.
Continue reading...Ben van Beurden says Ukraine war fallout means big rise in bills and possible need to ration supplies
European consumers could face the prospect of energy rationing this winter as costs continue to soar amid the risk of Russia cutting off gas supplies, Shell’s chief executive has said.
“It will be a really tough winter in Europe,” said Ben van Beurden, speaking at the Aurora spring conference in Oxford on Thursday. “We will all face very significant escalation in energy prices. In the worst case, Europe will need to ration its energy consumption.”
Continue reading...West’s response to effects of Covid and Ukraine war condemned as shortsighted ‘collective failure’ to invest in future human capital
The international community would be “playing with fire” if it failed to help Africa recover from Covid and the impact of the Ukraine war, the International Monetary Fund’s director for the continent has said.
Failure to invest and support the continent was shortsighted and detrimental to the global economy, as half of the new entrants into the global workforce over the next decade would come from sub-Saharan Africa, Abebe Aemro Selassie, director of the IMF’s Africa department, told the Guardian.
Continue reading...Prime minister will say food insecurity has become a significant challenge and Australia has a major role to play in meeting the challenge
Australia’s prime minister Anthony Albanese will declare the world must raise ambition to reduce the risks of runaway global heating and cooperate amid national policy differences even when “long shadows of conflict and crisis are threatening our shared security”.
The prime minister will use a speech to a special session of the council of the Organisation for Economic Co-operation and Development in Paris to launch a clarion call for international cooperation on climate policy, as well as practical measures to safeguard energy and food security, as the world grapples with disruptions created by the coronavirus pandemic and the war in Ukraine.
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Continue reading...Volume of Russian crude bought and then exported by India suggests some of it may end up in European petrol stations
The huge blue and red hull of the SCF Primorye came into port at Vadinar, western Gujarat, India, earlier this month. The 84,000-tonne oil tanker, built in 2009 and sailing under the Liberian flag, had arrived from the port at Ust-Luga, a settlement in Russia near the border with Estonia.
Until 2017, the Vadinar oil refinery was controlled by Essar – the Indian owner of the Stanlow refinery in Ellesmere Port. Since then a consortium including the sanctioned Russian state-owned oil firm Rosneft and the commodities trader Trafigura, which holds a 24.5% stake, have owned Nayara Energy, which runs the refinery.
Continue reading...EU withdrawal fuelling higher import costs and costing British workers nearly £500 a year, says Resolution Foundation
Britain’s cost of living crisis is being made worse by Brexit dragging down the country’s growth potential and costing workers hundreds of pounds a year in lost pay, new research claims.
The Resolution Foundation thinktank and academics from the London School of Economics said the average worker in Britain was now on course to suffer more than £470 in lost pay each year by 2030 after rising living costs are taken into account, compared with a remain vote in 2016.
Continue reading...Federal Reserve expected to increase cost of borrowing by 0.75 percentage points to curb rising inflation
The world’s financial markets are bracing themselves for the sharpest rise in US interest rates in almost 30 years, as America’s central bank takes action to halt rising inflation.
After days of frenzied investor speculation and signs of growing central bank anxiety, the Federal Reserve is expected to increase the official cost of borrowing by 0.75 percentage points for the first time since 1994.
Continue reading...Analysis: US to examine with fresh urgency easing reliance on China as pandemic disruptions expose global economic vulnerabilities
Everyone has a story to tell about the supply chain problems that have affected the global economy, from the beginning of the pandemic through to the disruption caused by the war in Ukraine. From shortages of Ikea furniture and Christmas turkeys, to the dearth of computer chips that sent the cost of secondhand cars soaring, the dislocation of a once smooth-running system has caused havoc in the global economy.
But while predictions about the easing of bottlenecks have come and gone without any improvement, it has become clear the disruptions of the past two years or more are spurring fundamental changes to the world economy that could have yet more profound impacts on our lives.
Continue reading...Exporters fear Northern Ireland protocol row will spur trade war with Brussels, making an already difficult job even harder
Mark Brearley is still frustrated by Brexit. More than a year from Britain’s formal withdrawal from the EU, on terms agreed by Boris Johnson’s government, exporting the goods his company produces hasn’t got any easier for the London-based manufacturer.
Describing it as “the same nightmare week after week”, he says: “A lot more time is spent with things going wrong. The EU really feels like the hardest place in the world to ship things to sometimes.”
Continue reading...Schools, stadiums or airports help the presidents of countries that receive cash from Beijing tighten their grip on power
China’s financing of overseas projects has disproportionately benefited the core political supporters of incumbent presidents or prime ministers of those countries that receive the funds, according to a new book.
During the 20th century, China was mostly known as a recipient of international development finance. Its overseas development programme was modest – roughly on a par with that of Denmark. But over the course of one generation, as Beijing emerged as the world’s second-largest economy, its footprint began to extend far beyond its borders – often in the form of infrastructure initiatives such as Belt and Road.
Continue reading...From a warning of third world war to global stagflation or depression, gathering is unsurprisingly sombre
The impact of Russia’s invasion of Ukraine dominated a delayed and slimmed-down World Economic Forum this year but it took George Soros to articulate what many of those making the trip to the Swiss Alps had been thinking.
Davos would not be Davos without a broadside from the 91-year-old philanthropist and former speculator, but the conflict in eastern Europe prompted his most apocalyptic warning yet.
Continue reading...Economists fear Sri Lanka could be first of several, with IMF in talks with Egypt, Tunisia and Pakistan
Sri Lanka has defaulted on its debts for the first time in its history as it struggles with an economic and political crisis triggered by global shock waves from the pandemic and the war in Ukraine.
An inflation rate spiralling towards 40%, shortages of food, fuel and medicines and rolling power blackouts have led to nationwide protests and a plunging currency, with the government short of the foreign currency reserves it needed to pay for imports.
Continue reading...Group warns of ‘cascade of export bans’ amid failure to ease grain bottlenecks fuelling shortages and inflation, MHP said
One of Ukraine’s largest farming groups has called for an urgent solution to unblock the country’s Black Sea ports as exports of grain, sunflower and rapeseed are being held up by the Russian naval blockade, driving inflation and shortages around the world.
G7 ministers have held urgent talks about trying to open routes through Romanian and Baltic ports, potentially fed with an army of 10,000 trucks making a five-day trip from Ukraine.
Continue reading...