Aurelia Butler

ISLAMABAD (Reuters) – Pakistan GDP growth will slow to 5% for the upcoming fiscal year beginning on July 1, from 5.9% in the outgoing year, following budgetary tightening aimed at winning International Monetary Fund (IMF) support, the government said on Saturday. The planning ministry made the estimates ahead of the annual budget to be presented on June 10.”Keeping in view external and local uncertain economic environment, GDP growth will slightly taper off and is envisaged at 5 percent for 2022-23 on the back of agriculture (3.9%), manufacturing (7.1%) and services sector (5.1%),” said the ministry in a working paper seen by Reuters. The paper said the fiscal consolidation will be pursued to bring down the deficit through a combination of expenditure management and revenue enhancement. Pakistan’s foreign reserves have been on a steep decline in recent months – falling to $9.7 billion, less than 45 days of imports – and its double digit inflation and a widening current account deficit have put it in a tight spot.Moody’s (NYSE:MCO) has changed Pakistan’s outlook to negative from stable.Pakistan has been waiting for the IMF board to clear a seventh review to resume a $6 billion rescue package signed in 2019 after both sides concluded talks in Doha last month.The paper said the fiscal deficit for the July-March portion of the outgoing fiscal year had widened to 4% of GDP, compared to 3% of GDP for the corresponding period last fiscal year.The current account posted a deficit of $13.8 billion (3.5 % of GDP) in July-April of the outgoing financial year, it said. Average inflation was recorded at 11.3% during July-May of the current fiscal year, as compared to 8.8% in the comparable period of the previous year. The new government of Prime Minister Shehbaz Sharif who took over from ousted premier Imran Khan in April says that it has inherited a dire economic crisis. More

Models of the ML, GL (BR 164) and R-Class (BR 251) series produced between 2004 and 2015 are affected, it said. Some 70,000 of them are in Germany.”We have found that in some of those vehicles, the function of the brake booster could be affected by advanced corrosion in the joint area of the housing,” Mercedes-Benz said in a statement.This could result in an increase in the brake pedal force needed to decelerate the vehicle and/or to a potentially increased stopping distance, it added.Mercedes-Benz is starting the recall immediately. More

“Considering the price level that has been established as a result of the West’s policies, we have suffered no budgetary losses,” the foreign ministry quoted him as telling a Bosnian Serb television station.”On the contrary, this year we will significantly increase the profits from the export of our energy resources.”On Monday, European Union leaders agreed in principle to cut 90% of oil imports from Russia by the end of this year to punish Moscow for invading Ukraine.”Oil, generally speaking, is not subject to politics, there is a demand for it … we have alternative sales markets, where we are already increasing sales,” said Lavrov. More

Not necessarily so. While the danger of a downturn has risen as growth has slowed, most economists argue a contraction is unlikely in the immediate future, given the continued strength of the jobs market and the more than $2 trillion in excess cash on household balance sheets.  It’s next year they’re more worried about, as the Federal Reserve’s continuing interest-rate hikes increasingly bite and decades-high inflation eats into that cash surplus.But even then, an economic decline isn’t a slam dunk. Ex-Fed official and Deutsche Bank AG (NYSE:DB) economist Peter Hooper was among the first to forecast a recession, and puts the odds of one happening next year at 70%-plus. Yet he says he can still see some scenarios for avoiding one.That would, to use the words of Treasury Secretary Janet Yellen, take luck and skill on the part of the Fed as it seeks to rein in surging prices. Success will also depend on forces beyond the central bank’s control — a point Fed Chair Jerome Powell himself has made, amid supply-chain shocks caused by the pandemic and Russia’s Ukraine war.Based on the critical assumption that the worst economic effects of Covid-19 and the war are behind, Moody’s Analytics chief economist Mark Zandi is betting the Fed can pull it off.“I still think we’re going to navigate through without a recession. But obviously it’s going to be very, very tight because risks are very high,” he said.A lot is at stake. A recession would likely throw hundreds of thousands of Americans out of work and trigger another big downdraft in the stock market. It would also spell further trouble for President Joe Biden, whose Democrats are already on the back foot in defending thin congressional majorities in November’s midterm vote.Biden on Friday touted the latest sign of strength in the jobs market even as he acknowledged it’s likely to be overshadowed in American minds by the pain of sky-high inflation.Cracks are starting to show in an economy that’s coming off a growth rate that last year reached the highest since 1984. The housing market is buckling under the impact of a big jump in mortgage rates engineered by the Fed, with new home sales plummeting in April by the most in nearly nine years.Technology companies that prospered during the height of the pandemic are retrenching and cutting staff. And retailers like Walmart (NYSE:WMT) Inc. and Target Corp. (NYSE:TGT) are trimming their earnings forecasts as they struggle with surging costs.That’s set off alarm bells on Wall Street. The Nasdaq composite stock index has slumped into a bear market, while corporate bond spreads have widened to reflect a growing risk of recession.Some corporate chieftains are working the worry beads too. Bigwigs from JPMorgan Chase & Co. (NYSE:JPM) Chief Executive Officer Jamie Dimon and billionaire entrepreneur Elon Musk to Gary Friedman, the head of furniture retailer RH (NYSE:RH), voiced wariness this week about the possibility of a downturn.Megan Greene, global chief economist at the Kroll Institute, says such concerns are premature. Consumers, the bulwark of the economy, still have a lot of financial firepower built up from earlier in the pandemic, when they were cooped up at home and showered with stimulus checks from the federal government.And while the real estate market is turning, many are still benefiting from appreciated property valuations. Adding to collective consumer firepower is the rising number of employed people across the economy, with the May jobs report showing a 390,000 gain in payrolls and an unemployment rate holding close to a half-century low.“Strong household and corporate balance sheets will keep growth positive for the next 12 months. Looking further out to late 2023, our model shows the risks of recession are elevated. A soft landing isn’t impossible. It’s tough to make it the base case.”– Anna Wong and Andrew Husby, economistsThat’s all enabling consumers to keep on spending in the face of higher prices for food, gasoline and other necessities. After stripping out inflation, growth in consumer outlays actually accelerated in April, data showed May 27.‘Good Shape’“Consumers are in good shape,” Bank of America Corp (NYSE:BAC). CEO Brian Moynihan told Bloomberg Television on May 24. “What’s going to slow them down? Nothing right now.”But inflation will continue to eat away at households’ nest eggs, making next year’s outlook more fraught.“I don’t think we’re going into recession in the next 12 months,” Greene said. “It’s the 12 months after that, that I’m worried about.”  The fate of the economy in 2023 ultimately will depend on what happens with inflation and how high the Fed will have to raise interest rates to reduce it to acceptable levels. The Fed’s favorite inflation measure rose an annual 6.3% in April, more than triple the central bank’s 2% target.Deutsche Bank’s Hooper says the Fed may need to push short-term interest rates as high as 5% to wring inflation out of the economy. That would be the highest since 2007 and well above the Fed’s current 0.75% to 1% target range.“In order to relieve the inflation pressure in the labor market you’re going to have to see the unemployment rate rise,” Hooper said, sticking to his bet on a recession.Oxford Economics chief US economist Kathy Bostjancic takes the other side of that trade. She puts recession chances at 35%, arguing that an unwinding of supply-chain strains and an influx of workers into the labor force will help alleviate inflationary pressures without requiring economy-breaking Fed tightening.Another plus for the Fed: Investors, consumers and businesses seem convinced that, in time, it can get inflation under control, surveys and bond-market indicators show. That means policy makers might not require a “punishing recession” to squeeze inflationary psychology out of the economy, JPMorgan chief US economist Michael Feroli said.It doesn’t mean the Fed’s task will be easy. Feroli sees growth slowing to a mere 1% in the second half of 2023 as tighter monetary policy ripples through the economy.“The Fed has to thread the needle to keep growth subpar but still positive,” he said. “We can avoid a recession, but we definitely have an elevated risk of one.”©2022 Bloomberg L.P. More

Taylor Goucher is urgently looking to hire accountants and customer support technicians to work for Connext Global Solutions, the offshoring consultancy where he leads client services.But those are not the only job listings the company has posted. They also have five additional listings, for engineers and a vice-president, that he plans to leave up indefinitely.“For really tough openings, the right people only come up so often, so we have to leave them open and just sort of wait and hope that at some point, a good candidate is going to come through,” said Goucher, who said he adopted the strategy 18 months ago after working to fill one role for nine months to no avail. Some economists suspect that Goucher may be among a growing number of employers posting so-called purple squirrel vacancies to be left up indefinitely in the hope of finding the kind of perfect candidate that is as rare as woodland creatures with pastel fur. If true, it could help explain why job openings figures remain elevated.“These are purple squirrel vacancies,” Christopher Waller, a Federal Reserve governor, told reporters after a speech to the Institute for Monetary and Financial Stability in Frankfurt. “They’re not real.”To Waller, such vacancies strengthen the US central bank’s case for tightening financial conditions. If long-term job listings are inflating the job openings figures, labour might not be as in demand as it seems. That could make it possible to reduce the number of vacancies advertised by companies without significantly altering the unemployment rate. The Fed is raising rates to tamp down on inflation but fears persist that steep increases could paralyse the jobs market or trigger a recession. US employers added 390,000 jobs in May, the labour department reported on Friday.The bulk of the 11.4mn job openings reported in April are not waiting for “purple squirrels”. A Goldman Sachs analysis found that two-thirds of current listings were posted in the past 90 days, a higher share than before the coronavirus pandemic. Yet the number of vacancies that employers fill each month reached an all-time low in March.“That’s not because companies are getting pickier,” said Julia Pollak, the chief economist for jobs site ZipRecruiter. “On the contrary, many are reducing experience and education requirements.“It’s because, despite reducing requirements, employers are still not finding enough interested, qualified people per vacancy,” Pollak added. “Many employers are making offers to multiple candidates and seeing them all reject the offers for other opportunities because they’re being outbid.”Some frustrated job seekers share Waller’s suspicion. Julia Laico looked for months for a job to start after her graduation from Emory University in Atlanta in May. She said she expected the process to be fast because of a shortage of workers, but instead spent hours sorting through inactive job listings. Eventually, she landed a two-month fellowship with an education non-profit.“I expected some more professionalism on the part of many employers,” Laico said. “There was a lot of unresponsiveness, even after interviews. And I totally understand that companies can’t respond to every applicant because of the high volume.”Patricia Lenkov, an executive recruiter in New York, said that employers are becoming increasingly selective about who they hire after a year of experimenting with less qualified candidates because of a worker shortage, which might account for slower and more frustrating hiring processes.

Other companies have yet to “clean up” their job ads after spending months struggling to backfill for employees who quit during the pandemic, said Cathi Canfield of industrial staffing group EmployBridge.That is the case at OSP International, a Tuscon company that produces training courses for project managers. “We understand that finding a candidate that has all the skills you need is impossible, but we keep those vacancies out there just in case we get lucky,” Cornelius Fichtner, OSP’s president, said. “We don’t get lucky too often though.”Recruiters and economists agree that job seekers still have the upper hand in today’s labour market. Joe Mullings, chief executive of talent acquisition at The Mullings Group, warns that it makes it more difficult than ever for employers to lure in “purple squirrels”.“Candidly, the best people are usually not out looking for jobs and they are not responding blindly to job ads or sending their resumes into HR,” Mullings said.Goucher said that his “purple squirrel” vacancies have helped him hire qualified engineers he might have otherwise missed.“It’s a different strategy,” Goucher said. “Instead of hunting, you can fish.”Additional reporting by Joe Rennison More