Aurelia Butler

How much has US economic growth slowed? The US is expected to report that economic growth slowed significantly in the first quarter, driven largely by a reversal of the previous quarter’s unexpected boom in inventory accumulation. The commerce department on Thursday is forecast to show that the US economy grew at an annualised rate of 1 per cent in the first three months of the year, according to economists surveyed by Reuters. That is down from a 6.9 per cent pace in the fourth quarter of 2021, and would mark the slowest growth since the recession induced by Covid lockdowns in 2020.As the flow of goods around the world eased late last year, businesses produced far more than they sold in the fourth quarter, driving inventories higher. That boosted gross domestic product growth for the fourth quarter of 2021 at a faster rate than had been forecast, and far faster than the 2.3 per cent growth in the third quarter.Credit Suisse analysts do not expect that phenomenon to repeat. Instead, they expect a rise in personal consumption to bring down excess inventories. The GDP growth data comes at a time of intense concern among economists and investors over high inflation and the risk that central bankers’ response to it will tip the economy in to recession. Higher commodity prices and borrowing costs are likely to hit growth in the coming months, but the effects in the first quarter may have been limited, as financial conditions remained loose and household finances were strong. Kate DuguidWhat will the Bank of Japan say on rates and the yen? The Bank of Japan will meet at a time when its policy of holding bond yields low comes under heavy pressure from global market shifts.The central bank’s long-term policy of yield curve control — buying bonds to stimulate the economy and spur inflation — has become difficult as investors dump global debt, sending yields higher elsewhere. Michael Metcalfe, head of macro strategy at State Street Global Markets said Fed Chair Jay Powell’s suggestion last week of a 0.5 percentage point interest rate rise in the US “put even more pressure on the Bank of Japan”.The gap between US and Japanese policy is also leaving a mark on Japan’s currency, which has dropped to a two-decade low. One dollar now fetches ¥129, from ¥115 at the start of March. “The currency markets will keep pushing the yen down until the BoJ makes a move,” Metcalfe added. Analysts and traders are watching for signs that authorities could make the rare move of intervening to prop the currency up.Japan’s dovish approach appears set to continue. The BoJ launched four days of unlimited bond buying last week to keep Japanese yields in check, as deputy chief cabinet secretary Seiji Kihari told Reuters, “there’s no such thing as good or bad” exchange rates. “Stability is important,” he said. Ian JohnstonHow has the eurozone economy weathered the war in Ukraine? Eurozone economic growth is expected to have weakened in the first quarter, as the war in Ukraine and high Covid-19 infections took their toll on activity. At the same time, inflation is projected to have remained in line with its record high of 7.4 per cent in March.Flash inflation data for April, due on Thursday, and growth figures for the eurozone and several member countries on Friday, will provide the most comprehensive indication so far of the impact of the war on economic activity.Economists polled by Reuters expect inflation to have edged up to 7.5 per cent in April. They also forecast GDP to have grown 0.3 per cent in the first quarter, the same pace as in the previous three months.This is despite analysts expecting the German economy to have returned to growth after contracting at the end of last year. Tempering region-wide gains, the recovery is thought to have slowed in France and reversed in Italy.Eurozone growth figures mark a notable slowdown from the 2.2 per cent annual rate seen in the third quarter, reflecting weaker momentum at the end of last year at a time of rising Covid infections and energy prices, as well as supply bottlenecks.These factors, along with the Russian invasion of Ukraine in February, also constrained economic growth in the first quarter of 2022, as Christine Lagarde, president of the European Central Bank, recently noted.Speaking last week, she said medium-term momentum could benefit from the reopening of the economy, the strengthening of the labour market and the savings accumulated during the pandemic.However, she added that “the war has led to rising uncertainty, further increases in energy costs and heightened concerns about supply bottlenecks, posing clear downside risks to economic activity”. Valentina Romei More

Wang Yiming, a member of the Monetary Policy Committee of the People’s Bank of China, told an economic forum the effective management of macroeconomic policies was critical in laying the foundation for the country to achieve the national growth target of around 5.5%.Gross domestic product rose 4.8% in the first quarter from the same period last year.Beijing should “actively and effectively” expand domestic demand, stabilise the country’s industrial supply chains and manage market expectations, Wang said.His comments come as Shanghai – China’s most populous city and most important economic hub – battles the country’s biggest COVID outbreak.Shanghai’s lockdown, which for many residents has lasted over three weeks, has fuelled frustration over access to food and medical care, lost wages, family separation and quarantine conditions.This has also dragged on the world’s second-largest economy, with factory production disrupted by snarled supply chains and difficulties faced by locked-down residents returning to work. More

But his centre-right Slovenian Democratic Party faces a strong challenge from the environmentalist Freedom Movement, which wants more investment in renewable energy and more transparency in state institutions.”Today we are voting for change,” said Milena, 58, who cast a ballot in the capital Ljubljana. “We do not want these politicians in power anymore. The last two years have been desperate in every way. We want new faces, we want normality and stability.”A poll published by Ninamedia polling agency on Friday put the Freedom Movement on 27.7% and Jansa’s SDS on 24%.Jansa, an admirer of former U.S. President Donald Trump and an ally of nationalist Hungarian Prime Minister Viktor Orban, has clashed with Brussels over media freedoms and opponents accuse him of undermining democratic standards.Jansa denies the accusations.The 63-year-old populist has campaigned on promises to improve the economy and provide energy security in the small Alpine country of about 2 million people that is a member of the European Union and the NATO military alliance.Whoever wins will have to secure coalition partners to form a new government. The two main left-leaning parties have ruled out serving in a coalition led by the SDS.Some 1.7 million people were eligible to vote from 7 a.m. (0500 GMT) and polling stations will close at 7 p.m. Exit polls are expected to be published soon afterwards.KYIV VISIT Jansa, who served as prime minister from 2004 to 2008, from 2012 to 2013 and from 2020 until now, is a staunch advocate of EU enlargement, including membership for Ukraine.He was among the first EU leaders to visit Ukraine and show solidarity with Kyiv after Russia’s invasion on Feb. 24, and has promised to reduce Slovenia’s reliance on Russian gas imports.Jansa says he has managed the economy well and hopes to benefit from measures implemented to soften the economic impact of the COVID-19 pandemic.”These elections will decide how Slovenia will develop not only for the next four years, but for the next decade,” Jansa said after casting his vote in a rural area near the industrial town of Velenje.The Freedom Movement is led by Robert Golob, a former executive of a state-owned energy company. It backs EU sanctions on Russia over the war in Ukraine but accuses Jansa of seeking to exploit the war for his own political benefit, a charge that Jansa dismisses. More