Aurelia Butler

NEW DELHI (Reuters) – Indian financial consultant Waqar Khan has seen his income drop by about a fifth since the coronavirus pandemic began. When his younger son’s private school raised fees by 10% this year, he had no choice but to move him to the state system.With three children and living in a small house in the capital, New Delhi, the 45-year-old can no longer afford private school fees for his boy of 10. He moved his older boy into a state school in early in 2021.”I had no option,” Khan told Reuters, adding that rising education costs had come on top of a nearly 25% increase in household expenses in the past two years.While inflation is putting the heaviest burden on the poorest, the relatively well-off are coming under the sort of pressure to make cuts in household budgets not seen in years.Khan is among millions of parents who have moved children from private to state education since 2020, or from elite schools to cheaper ones. In 2021, four million children switched from private to state, more than 4% of all children in school.That is a reversal of a trend that has swept India over the past two decades, as more families in an increasingly prosperous society opted for private education to give their children an advantage in the job market.But now inflation means that such aspirations are becoming unaffordable for some.”My family life is shattered. I often feel distressed and helpless at being unable to provide good education for my children despite all the hard work,” Khan said.His daughter, a 12th grade student, is still at the school where his 10-year-old had been, as he has not been able to find a place in the state system for her.For the fast-growing middle class, the appeal of lessons in English and better teaching is huge.The private sector covers a range of schools and fees, from a few dollars a month to hundreds, and so serves lower- and middle-income families as well as the wealthy.On top of fees, transport companies that take children to school have raised prices by more than 15% this month in Delhi and some other places to cover higher wages and fuel, parents’ associations said.Arjun Singh, 47, who drives a school van and owns three school cabs, said he increased his charges by up to 35% in April because of higher costs. Prices for compressed natural gas (CNG) for his vehicles had almost doubled, he said.Broader inflation is biting hard, touching 6.95% in March – a 17-month high and above the central bank’s target, and economists say that households are bracing for worse as companies pass on the costs.’ADVERSE CONSEQUENCES’Many private schools have raised fees and other charges by more than 15% this year, said Aparajita Gautam, president of the Delhi Parents Association, although some had delayed doing so during the worst of the pandemic. Her association has protested at a number of private schools in the capital, drawing the attention of the media and authorities.In response, Delhi’s government has simplified the procedure for enrolling in state education and promised to audit school accounts, while trying to encourage schools to cap fee increases at 10%, with little success.”Most private schools are forcing parents to accept steep hikes or face adverse consequences,” Gautam said.In the city of Kolkata, nearly 70% of private schools raised fees by up to 20% last month, and some parents have asked authorities to press schools to soften the blow.Schools defend the higher fees.Sudha Acharya, head of the National Progressive Schools’ Conference and principal at ITL Public School, understood that many parents were going through tough times but schools faced rising costs.”Without increasing school fees again, maintaining quality is a little difficult,” she said.The Delhi-based Centre Square Foundation, a consultancy, found in a 2021 study that a majority of 450,000 private schools in India, 70% of which charged up to 1,000 rupees ($13) a month per student, faced financial losses of 20%-50% during the pandemic.As parents defaulted, some schools cut teachers’ pay and thousands of schools, particularly those catering to lower-income families, closed, according to school associations and state authorities.Enrolment in private schools has skyrocketed to more than 35% of students from about 9% in 1993, and nearly 50% of households spend nearly 20% of their earnings on children’s education, according to government and industry estimates.A family with monthly income of 20,000-50,000 rupees ($260-$650) might pay 2,000-10,000 rupees a month on tuition and another 1,500-5,000 rupees on transport.DEBT TRAPThere are about 90 million Indian children in private schools in total.Federal and state governments spent 6.43 trillion rupees ($84 billion) to fund about 1.1 million schools in 2019/20, or about 3.1% of gross domestic product against 6% recommended by various government panels.Economists said rising private education costs were not fully captured in inflation data, as it is weighted at just 4.5% in the consumer prices index based on a decade-old model.Devendra Pant, chief economist at India Ratings, the Indian arm of the Fitch rating agency, said rising education costs were part of a second wave of inflation households were facing after a rise in global crude oil and other commodity prices.”It would significantly impact households’ monthly budget and could force many to cut spending on other products and services.”Some parents have been caught in a nightmare debt trap that could rob their children of education altogether.Sanjay Kumar Vaghela, a driver in Ahmedabad city who had to borrow money after losing work, said he could not afford to pay the higher fees for his daughter nor clear the 18,000 rupees he still owed her school.The school asked him to pay the outstanding fees before it issued a transfer certificate, without which no state school was prepared to admit his daughter, he said.”My daughter may remain without education forever as I have no funds to pay,” he said.($1 = 76.4830 Indian rupees) More

TOKYO (Reuters) – Ryu Ishihara will soon be raising prices on his inexpensive bowls of soba noodles for the first time in nearly a decade, as rising costs and Russia’s invasion of Ukraine take an unlikely toll on Japan’s beloved buckwheat noodles.Though seen as one of the most quintessential of Japanese foods – and eaten on New Year’s Eve for good luck – a good part of the buckwheat that goes into the noodles comes from Russia, globally the top buckwheat producer.Russian buckwheat can still be imported, but instability and shipping disruptions have hampered and delayed procurement. That has added to the pain for soba shop owners such as Ishihara who are already suffering as a global surge in commodity prices, coupled with the yen’s plunge, has sent prices climbing.Soy sauce, flour, the vegetables used for tempura toppings and even the fish used for the broth have all risen in cost.”The suppliers did all they could, but this time the situation’s so bad there’s no way to avoid raising prices. There are things I’ll have to raise by 10 to 15 percent,” Ishihara said in his narrow shop, steaming vats of water behind him.Soba is famous as a cheap meal served cold or hot, often slurped quickly by workers and students in narrow shops that may cut costs by doing without seats. The noodles’ low calorie count and nutritious vitamin and mineral content makes them healthy too.Ishihara’s prices run from 290 yen ($2.25) up to 550 yen, with add-ons such as tempura and sets with rice costing more.”Now, with the war, the cost of importing the buckwheat too has gone up,” he said.Despite soba’s iconic status, Japan in 2020 produced only 42% of its buckwheat needs, according to the Japan Soba Association. The gap is filled by imports, with Russia the third-largest source of buckwheat from 2018, according to the Agriculture Ministry.In 2021, Russia rose to second, displacing China, and up until February it was No. 1.Then it invaded Ukraine, adding to the surge in commodities prices, while Japan’s yen meanwhile plunged to a 20-year low. On top of that, sanctions and crackdowns on the Russian banking system, which have frozen Moscow out of international finance, have made it more difficult to settle some accounts.The result has been headaches for soba importers and millers like Hua Yue at the purchasing department of Nikkoku Seifun Co Ltd in Matsumoto, a city in the traditional soba-producing area of Nagano.Her company imports buckwheat seeds from Russia, as well as other nations including China, in 800- to 1,000-tonne sacks, though she declined to give exact amounts or percentages of how much each country provides.So far, the biggest problems have been delays and a 30% rise in the price of Russian buckwheat over the last six months, though that’s partly due to an export stoppage last year that was resolved.With Russia producing half the world’s buckwheat, problems mean demand will shift to second-biggest producer China. But with China cutting buckwheat production every year, prices are likely to rise further.”So it may become hard to eat soba at low-cost places,” she added.Ishihara’s faithful customers, such as Keidai Fukuhara, who comes twice a week, shrug higher prices off. But even they may have their limits.”It’ll still be all right,” the 27-year-old office worker said. “That is, if the prices stay around 500 yen.”($1 = 128.65 yen) More

The ANZ measure of consumer confidence sank 6.0% last week, the sharpest drop since an Omicron wave swept through the eastern seaboard in January. The slide followed data showing consumer price inflation spiked to a 20-year peak of 5.1% in the first quarter.The grim mood was a challenge for Prime Minister Scott Morrison as he fights a tough election campaign that, going by opinion polls, could see him turfed out of office on May 21.The index reading of 90.7 implied pessimists now easily outnumbered optimists amid speculation the Reserve Bank of Australia (RBA) could hike rates at its monthly policy meeting later on Tuesday.Confidence among those with mortgages tumbled 9.6% in the week, while measures of current financial and economic conditions fell sharply.”This is the lowest level for consumer confidence at the start of a tightening cycle since the inflation targeting regime began in the early 1990s,” noted ANZ’s head of Australian economics, David Plank.”This may see the RBA tighten more slowly than the market is pricing.”Markets are wagering heavily the RBA will lift its 0.1% cash rate to 0.25% on Tuesday and follow with a move to 0.5% in June. Futures imply a whole string of hikes taking rates to around 2.5% by the end of the year and to 3.5% by the middle of 2023. More

NEW YORK (Reuters) – Citigroup Inc (NYSE:C) acknowledged late on Monday that one of its traders made an error in the sudden fall of European shares early in the day.”This morning one of our traders made an error when inputting a transaction. Within minutes, we identified the error and corrected it,” Citigroup said in a statement. More

SEOUL (Reuters) – South Korea’s consumer prices in April rose much faster than expected and at their quickest pace in 13-and-a-half years over a year earlier, led by a surge in energy and some food prices, government data showed on Tuesday.The Statistics Korea data showed the consumer price index (CPI) rose 4.8% in April from a year before, speeding up from a 4.1% rise in the previous month and far faster than a 4.4% rise tipped in a Reuters survey.It even exceeded the highest forecast among the 11 economists in the survey and marked the fastest annual growth since October 2008, while standing above the central bank’s 2% target for a 13th consecutive month.”It’s faster than we expected and indicates the timing will also come later than we though when the inflation begins to slow down and stabilise,” said Stephen Lee, senior economist at Meritz Securities. “It won’t change the interest rate prospects but it’s clearly a surprise to the markets.”The index rose 0.7% on a monthly basis, compared with a 0.4% rise tipped in the survey, after rising 0.7% in March. The core inflation, measuring price growth excluding energy and foods, sped up modestly to 3.1% on a year-on-year basis in April from 2.9% in March and marked their highest since May 2009.South Korea’s central bank last month raised its benchmark interest rate by 25 basis points to 1.50% in a surprise move as it ramped up the fight against rampant inflation.It marked the fourth increase of the Bank of Korea’s base rate since it kicked off a policy tightening cycle in August last year as one of the first central banks in high-income countries to do so. More

WASHINGTON (Reuters) – All tools are on the table to address rising inflation, including reductions of tariffs on Chinese imports, U.S. Trade Representative Katherine Tai said on Monday, but she stressed that any policy shift needed to keep medium-term goals in mind.Such goals include building a more resilient, durable, global economy that served workers as well as consumers, she noted.Monetary, tax and policy policy have a role in addressing surging food and energy prices, Tai told a conference hosted by the Milken Institute in Los Angeles. “Sure we can look at those tariffs, but I’m giving you the … strategic lens through which we need to be looking at. The question is what do we do with them.”The Biden administration has come under increasing fire from industry for not canceling tariffs on hundreds of billions of dollars of Chinese imports that were imposed by former President Donald Trump, especially given inflation rates at 40-year highs.Recent comments by deputy national security adviser Daleep Singh and Treasury Secretary Janet Yellen about the deflationary impact of tariff reductions sparked a flurry of speculation that the administration was thinking about changing course.But Tai appeared to downplay the prospects of a larger-scale move to reduce tariffs, and challenged a recent paper by the Peterson Institute for International Economics that called for elimination of a wide swath of tariffs to combat inflation.The paper said U.S. consumer price index inflation would decline by 1.3 percentage points if the United States and China eliminated tariffs, and Washington scrapped tariffs on steel and aluminum from all countries, as well as softwood lumber from Canada.”I really have to challenge the premise of that study,” Tai told the conference. “I think it’s either something between fiction or an interesting academic exercise.”Sources familiar with the administration’s thinking said no major moves were imminent on tariffs, although Tai’s office continued to look at limited exclusions from the tariffs on Chinese goods implemented by Trump. More