Aurelia Butler

Output was up 0.4% in August from July, IBGE said, recovering part of the losses seen a month earlier but below forecasts as the median estimate in a Reuters poll projected an increase of 0.5%.Industry has been stuttering in Brazil this year, alternating between gains and losses as restrictive monetary policy to tame high inflation hurts consumption and investment decisions, IBGE’s research manager Andre Macedo said.The August increase was driven by capital and consumer goods production, but a drop in intermediate goods output partially offset those gains, according to the statistics agency.Industrial production in August, IBGE added, rose 0.5% from a year earlier, while market expectations stood at a 0.8% rise.The smaller-than-expected increases suggest that the sector was a drag on economic growth in the third quarter, Capital Economics’ Chief Emerging Markets Economist William Jackson said in a note to clients.”Service sectors are faring better, but it still looks like GDP growth last quarter was weaker than in Q2,” he said.Industry was key for the surprisingly strong growth posted by Latin America’s largest economy in the three months through June. More

The Bank of Canada has maintained a 5% interest rate while monitoring corporate pricing strategies amid a resurgence in inflation to 4% in August. The progress towards disinflation has been slower than anticipated. Vincent’s apprehensions are also echoed in Prime Minister Trudeau’s recent call to grocery executives for food price stabilization.Vincent’s role on the rate-setting council is significant given these developments. His insights will be key in addressing issues such as “greedflation,” a concept that examines the impact of corporate pricing strategies on inflation rates. The retail food sector’s pricing practices and imbalances between supply and demand have also been underlined as areas of concern.The upcoming interest-rate decision by the Bank of Canada was also mentioned, highlighting its importance in light of these ongoing issues. As the bank continues to navigate through these economic challenges, Vincent’s stance on pricing behavior and its implications for inflation will be closely watched.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

BUENOS AIRES (Reuters) – Argentina’s markets have a new cause for the wobbles – a presidential election whose outcome is anyone’s guess and could usher in a radical libertarian candidate who investors can’t work out whether they should love or fear.With less than three weeks to the Oct. 22 vote, bonds are sliding and the peso has slumped to a record 800 per dollar on the popular black market – which reflects the local currency’s true value while the official peso is caged by capital controls.”The dollar going past 800 pesos and bonds falling are a reflection of hedging by investors,” said Roberto Geretto, an economist at local investment fund Fundcorp. “The electoral trade has become election fear.”The vote sees outsider Javier Milei in the driving seat. He’s pledged some market-friendly plans including sharp spending cuts and dollarizing the economy, but remains an unknown and volatile entity. He also wants to shut down the central bank.His main rivals are the ruling center-left coalition’s economy chief Sergio Massa and conservative ex-security minister Patricia Bullrich. Milei leads in polls but analysts expect a second-round run-off – though they say anything is possible.A candidate wins outright with 45% or 40% and a 10-point lead over second place. Otherwise a head-to-head run-off will be held on Nov. 19 to choose Argentina’s next president.The election uncertainty has compounded an already complex economic crisis following years of economic mismanagement, deep fiscal deficits and ballooning debt. Inflation is at 124% annually, net central bank reserves are negative, while the government was forced to devalue the peso by 20% in August. Poverty – households living on less than the equivalent of $215 a month in and around the capital Buenos Aires, a number that varies in other parts of Argentina – has crossed 40% and interest rates are at 118%, throttling credit.”International weakness, electoral policies to stimulate demand at the cost of a bigger deficit and more monetary issuance, plus the very uncertainty the elections radiate, have formed the perfect storm,” GMA Capital said in a note.The South American country’s over-the-counter sovereign debt, already in distressed territory after a major default and restructuring in recent years, fell by over 10% last week, led by local currency bonds. It dropped further on Monday.Investors are betting on another devaluation after the election, putting pressure on the peso and leading to a rush to dollarize their holdings. The black market exchange rate is over 100% away from the official rate of 350 pesos per dollar.”With less than a month until the general elections, the local market appears to be weakening due to expectations of a jump in the exchange rate,” said Mauro Natalucci of local brokerage Rava Bursátil.Future peso operations show bets on an imminent devaluation of the currency. By December deals are around 682 pesos per dollar and by May 2024 at 1,058.”In the midst of the climate of high political and economic uncertainty, dollarization has been intensifying due to the proximity of the elections and the growing concerns about the political road ahead,” said economist Gustavo Ber.”Among them is a new devaluation amid a context of high inflation.”($1 = 349.9500 Argentine pesos) More

Franziska Ohnsorge, the World Bank’s Chief Economist for South Asia, and Auguste Tano Kouamé, Country Director for India, were among the key speakers at the event. They highlighted that despite high inflation and interest rates impacting many emerging markets, South Asia is progressing forward.However, Ohnsorge emphasized that all countries in the region are experiencing a slowdown from pre-pandemic levels. She noted that the current growth rate isn’t rapid enough to meet various development goals set by countries in the region.The World Bank’s latest South Asia Development Update also projected a slight deceleration in regional growth to 5.6% in 2024 and 2025 as post-pandemic rebounds subside and reduced global demand impacts economic activity.While India is expected to maintain robust growth with a forecast of 6.3% in the 2023-24 fiscal year, other countries like Maldives and Nepal are also set to expand due to a rebound in tourism. However, growth is anticipated to slow down in Bangladesh to 5.6%, and Pakistan’s projected growth of only 1.7% is below its population growth rate.The report also highlighted concerns about government debt in South Asian countries which averaged 86% of GDP in 2022, higher than other emerging markets. This high debt could escalate the risk of defaults and increase borrowing costs.The World Bank also released its latest India Development Update on Tuesday, revealing that despite a challenging global economic environment, India was one of the fastest-growing major economies in the previous fiscal year at 7.2%. This placed it as the second highest among the Group of 20 countries and nearly double the average for emerging market economies.However, with persistent global challenges such as high interest rates, geopolitical tensions, and sluggish global demand, overall economic growth is likely to decelerate in the medium-term. The World Bank predicts India’s GDP growth for the current fiscal year to be 6.3%, attributing it mainly to external factors and diminishing pent-up demand post-COVID-19 pandemic.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

SINGAPORE (Reuters) – An alliance of nations said on Tuesday members would raise $12 billion to protect coral reefs from threats such as pollution and overfishing, but experts warned the funding would only be a drop in the ocean unless broader climate risks are addressed. The International Coral Reef Initiative (ICRI) said it would secure public and private investment to help conserve and restore coral ecosystems, which sustain a quarter of the world’s marine species and more than a billion people.”The functional existence of these critical ecosystems is at stake due to the climate crisis and a myriad of other anthropogenic stressors,” it said. “The window for protecting these ecosystems is closing rapidly.” Coral reefs have come under increasing pressure as a result of rising marine pollution, destructive coastal development and fishing fleets. But they are also suffering because of rising sea temperatures, which cause coral to expel colourful algae living inside them, a phenomenon known as “bleaching”. Marian Wong, senior lecturer at the School of Earth, Atmospheric and Life Sciences at Australia’s University of Wollongong, said that although additional funding for protection and restoration would be “good news”, rising temperatures are the bigger risk. “Threats are very grave, especially as we head into another El Nino,” she said, referring to the semiregular ocean water warming phenomenon. “We are expecting coral bleaching on a mass scale to occur again, probably February to March, unless we are very lucky.” ICRI said it aims to “secure the future” of 125,000 square kilometres of shallow-water tropical coral reefs and double the areas under effective protection by the end of the decade. It also vowed to “accelerate” restoration of damaged reefs using innovative new solutions.David Booth, marine ecologist at the University of Technology Sydney, warned that restoration was no panacea, saying that it would be “unfathomably expensive” to do on a meaningful scale.ICRI was launched in 1994 by Australia, France, Japan, Jamaica, the Philippines, Sweden, Britain and the United States. Its members now include 45 countries that represent three quarters of the world’s coral reefs. “ICRI countries should be focused squarely on reducing greenhouse gas emissions,” said Terry Hughes, a coral expert at Australia’s James Cook University. “Ironically, Australia and Saudi Arabia are strong supporters of coral restoration ‘solutions’ because it buys time for fossil fuel industries to continue to pollute the atmosphere for as long as it’s profitable.” More