Aurelia Butler

JOHANNESBURG (Reuters) – Inflation in key African economies will slow into next year but remain stubbornly high in Nigeria due to sporadic flooding and difficult terrain for the naira currency, a Reuters poll found.The acute shortage of dollars in much of the continent including Angola, Nigeria and Zambia has often put home inflation under significant strain due to a reliance on single commodity currency inflows such as crude oil and copper.Still, the poll of 15 analysts taken in the past week showed inflation would moderate more in countries with better diversified sources of dollar revenues such as Kenya.Inflation in Nigeria is expected to quicken to 29.1% this year from an average of 24.5% last year, before it slows to 17.2% next year. It hit a 28-year high of 33.2% in annual terms last month.Nigeria central bank governor Olayemi Cardoso raised the monetary policy rate by 200 basis points to 24.75% last month after a 400 basis point hike in February.Even with a more coherent monetary policy now in place, and potential naira stability, Nigerian inflation will only fall slowly this year, Citi wrote in a note to clients.The high inflation rate reflects ongoing elevated food price inflation which accounts for around 50% of the CPI basket and is only marginally impacted by monetary policy, Citi added.High food price inflation is a result of flooding seen in many parts of the country in recent years, the rising cost of fertilizer and continuing insecurity in many food-producing regions.Ghana inflation averaged 40.3% last year, but is expected to slow markedly to 18.7% this year and then to 12.1% in 2025.Angolan inflation is forecast to slow to last year’s average of 13.6% next year from 23.7% this year, while in Zambia it was seen slowing to 8.0% in 2025 from 12.3% this year.Inflation in Kenya will remain one of the most-tamed in the region apart from South Africa, slowing to an average of 5.6% next year compared with 6.3% this year, the poll found. Standard Chartered said it lowered its inflation forecasts last week to allow for recent Kenyan shilling appreciation and improved food prices.A separate poll earlier this month predicted inflation in South Africa would slow to 4.6% next year from 5.1% this year.(Other stories from the Reuters global economic poll) More

PARIS (Reuters) -President Emmanuel Macron appealed on Thursday for stronger, more integrated European defences and said the continent must not become a vassal of the United States, as he outlined his vision for a more assertive European Union on the global stage.With just three years left of his second and final term in office, and after losing his parliamentary majority in 2022, Macron, 46, wants to show his critics that he retains the energy and fresh thinking that helped propel him into the presidency in 2017 and that he has not become a lame duck leader.”There is a risk our Europe could die. We are not equipped to face the risks,” Macron said in his speech at the Sorbonne University in Paris, warning that military, economic and other pressures could weaken and fragment the 27-nation EU.Macron said Russia must not be allowed to win in Ukraine, and he called for a boost in Europe’s cybersecurity capacity, closer defence ties with post-Brexit Britain, and the creation of a European academy to train high-ranking military personnel.”There is no defence without a defence industry … we’ve had decades of under-investment,” he said, adding that Europeans should give preference to buying European military equipment.”We must produce more, we must produce faster, and we must produce as Europeans,” Macron said.Europe “must show that it is never a vassal of the United States and that it also knows how to talk to all the other regions of the world”, he said.Macron has long called for European “strategic autonomy” involving less reliance on the United States, a stance that has gained greater resonance in the face of Donald Trump’s renewed bid for the White House. Trump has often accused Europe of free loading on defence at the United States’ expense. However, many EU officials believe there is currently no credible alternative to the U.S. military umbrella, and some suspect Macron of pushing French industrial interests.ECONOMIC CHALLENGESMacron said Europe also risks falling behind economically in a context where global free-trade rules are being challenged by major competitors, and he said it should aim to become a global leader in artificial intelligence, quantum computing, space, biotechnologies and renewable energy.The EU should agree exemptions to its own competition rules so it can support firms in sectors such as AI and green energy in the face of “oversubsidies” by the United States and China, Macron said.Europe needs less fragmented markets for energy, telecoms and financial services, and must also cut red tape, he added.The French leader hopes his speech will have the same impact as a similar address at the Sorbonne he made seven years ago that prefigured some significant EU policy shifts.Since then, much has changed, with major geopolitical challenges including the war in Gaza, Russia’s invasion of Ukraine and growing China-U.S. tensions.Thursday’s speech was billed by Macron’s advisers as France’s contribution to the EU’s strategic agenda for the next five years. The agenda is due to be decided after the European elections, when EU leaders will haggle over the bloc’s top jobs.Macron has seen his personal popularity tumble, while his centrist Renaissance party is trailing the far-right Rassemblement National (RN) in polls ahead of the June 6-9 European Parliament elections.Another challenge for Macron is that in the European Parliament, his group, Renew, is now the third-biggest but could fall to fourth place, opinion polls show, which would further limit his influence. More

The central bank said it saw room to further ease its main interest rate after long-delayed U.S. aid was finally approved this week with inflation in Ukraine lower than initially forecast so far this year.”The economic recovery will continue, but (it) will be restrained – primarily, due to significant damage to energy infrastructure,” it said in a statement.Russia has heavily bombed the Ukrainian energy sector in recent weeks, targeting power stations and substations and forcing authorities to introduce rolling blackouts in several regions. “The course of the full-scale war continues to be the key risk to inflation dynamics and economic development,” the central bank said. It said that real GDP growth in the first quarter had been weaker than expected, mainly due to limited budget spending amid uncertainty over foreign financial aid. It provided no figures. Over the course of 26 months of full-scale war with Russia, Ukraine has managed to maintain economic and financial stability with the help of billions of dollars in financial aid from its Western partners.The central bank said Ukraine could expect about $38 billion in Western financial aid this year. Thursday’s monetary policy meeting was the second in a row to cut the main interest rate. More

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Although Europeans generally save more than Americans, EU capital markets currently lack the depth of their U.S. counterparts because they largely operate along national lines.All EU leaders gave support to the principle of capital markets union at a summit this month though divisions remain on the details, with some countries reluctant to cede control of national financial rules.”Let’s fix a target to mobilise each year 600 billion euros with a new capital market,” Le Maire told a conference at the Finance Ministry about making capital markets union a European priority.Le Maire has pushed for a pan-European savings product to kick start capital market union, which he said governments should aim to make available by 2027 by agreeing favourable tax treatment and simple rules.A report by French former central banker Christian Noyer for the ministry said that the new product could build on existing national schemes to offer similar terms for tax treatment, employer contributions and early withdrawal.The aim would be to ensure that savings are locked up long enough to be steered into higher risk, higher reward equity-type investments which European companies sorely lack.The report estimated annual inflows could reach 200 billion euros based on the example of French employee savings plans, which on average attract the equivalent of a month’s pay per year.Noyer’s report also called for a push to revive securitisation where banks sell on standardised loan portfolios to investors better suited to carry the risk by creating a joint European distribution platform.It also said more powers should be given to the European Securities Market Authority to ensure better cross-border integration of financial market supervision.($1 = 0.9323 euros) More