Aurelia Butler

WASHINGTON (Reuters) – Confidence among U.S. single-family homebuilders fell to a seven-month low in April as surging mortgage rates and snarled supply chains boosted housing costs, shutting out some first-time buyers from the market, a survey showed on Monday.The housing market is under the spotlight as the Federal Reserve adopts an aggressive monetary policy stance in its fight against sky-high inflation, sending the 30-year fixed mortgage rate above 5% for first time in over a decade. But with housing inventory at record lows, the blow from surging borrowing costs could be modest. “The extreme supply-demand imbalance in today’s housing market will likely dampen the hit to activity from higher rates,” said Ronnie Walker, an economist at Goldman Sachs (NYSE:GS). The National Association of Home Builders/Wells Fargo Housing Market index dropped two points to 77 this month. The fourth straight monthly decline pushed the index to its lowest level since last September. A reading above 50 indicates that more builders view conditions as good rather than poor.Homebuilding sentiment dropped to its lowest level in nearly two years in the Midwest. It also fell in the West, but rose in the Northeast and edged up in the densely populated South. Graphic: NAHB – https://graphics.reuters.com/USA-STOCKS/myvmnymndpr/nahb.pngShortages as well as the high cost of building materials such as framing lumber are making it difficult for builders to ramp up production.According to government data, the backlog of houses approved for construction but yet to be started hit an all-time high in February. Homebuilding and housing permits likely slipped in March, a Reuters survey of economists predicted. March’s housing starts report is scheduled to be published on Tuesday.”Policymakers must take proactive steps to fix supply chain issues that will reduce the cost of development, stem the rise in home prices and allow builders to increase production,” said NAHB Chairman Jerry Konter in a statement.The Fed in March raised its policy interest rate by 25 basis points, the first hike in more than three years. Economists expect the U.S. central bank will hike rates by 50 basis points next month, and soon start trimming its asset portfolio.REDUCED AFFORDABILITYThe 30-year fixed-rate mortgage averaged 5.0% during the week ending April 14, the highest since February 2011, up from 4.72% in the prior week, according to data from mortgage finance agency Freddie Mac (OTC:FMCC). More expensive building materials and higher mortgage rates are raising the cost of buying a house, making home purchasing less affordable, especially for lower-income groups and first-time home buyers. At the current mortgage rate, economists estimate consumers taking a $300,000 home loan would pay $263 more per month than if they had fixed the loan rate at the beginning of this year. Annual house prices continue to post double-digit growth. Consumers expected home prices and rents to rise sharply this year, a separate survey by the New York Fed showed on Tuesday.Renters reported seeing just a 43.3% likelihood of ever owning a home, down from 51.6% in 2021 and the lowest reading since the survey began in 2014.”Rising mortgage rates and the run-up in prices in recent years will worsen affordability but pent-up demand from consumers will keep house price growth strong,” said Abbey Omodunbi, a senior economist at PNC Financial (NYSE:PNC) in Pittsburgh, Pennsylvania. Goldman Sachs estimates that sales of previously owned homes will drop about 6.0% to an annualized pace of 5.8 million units this year from the fourth quarter of 2021. It also expected house price inflation to remain strong this year.”While higher mortgage rates will help to slow home price growth by reducing the imbalance between supply and demand, our model suggests that the current level of housing market tightness and blistering pace of recent home price growth will support just over 10%, fourth quarter/fourth quarter, home price growth this year,” said Goldman Sachs’ Walker.”We expect home price growth to slow more substantially beyond this year. Our model points to a pace of home price growth in the low single digits by mid-2023, a pace we previously did not expect to reach until 2024.”The NAHB survey’s measure of current sales conditions fell to a seven-month low of 85 from 87 in March. But its gauge of sales expectations over the next six months rose three points to 73. The component measuring traffic of prospective buyers declined six points to an eight-month low of 60. More

COLOMBO (Reuters) -Sri Lanka’s embattled president announced 17 new ministerial appointments on Monday, notably leaving out members of his own family, and expressed regret for his government’s handling of a devastating economic crisis that has led to widespread protests. President Gotabaya Rajapaksa and his elder brother, Prime Minister Mahinda Rajapaksa, will stay on despite demands from protesters and the opposition for them to quit. Rajapaksa has governed the South Asian island nation since 2019 with other family members in top government positions.The island nation of 22 million is experiencing prolonged power cuts and fuel and medicines shortages triggered by a tumble in its foreign exchange reserves that has stalled imports of essentials, leading to daily protests in the commercial capital Colombo.The government is set to begin talks with the International Monetary Fund (IMF) on Monday for a loan programme, and analysts have flagged political instability as a risk to Sri Lanka finding a way out of its financial turmoil.Credit rating agency Moody’s (NYSE:MCO) downgraded the country’s debt rating on Monday, putting it even deeper in “junk” territory, below investment grade.In a speech to his new cabinet, President Rajapaksa said the country should have sought help from the IMF sooner – as urged by opposition parties and experts.”I believe that we should have gone for a programme with the International Monetary Fund earlier,” he said, according to a statement issued by his office.”Today, people are under an immense pressure due to this economic crisis. I deeply regret… this situation.,” the president said.”The pain, discomfort and anger displayed by the people for having to spend time in queues to get essential items at a high price…is justified.”Thousands of Sri Lankans have been protesting outside the president’s office in Colombo for over a week, demanding that the Rajapaksas resign.Faced with growing popular unrest Rajapaksa dissolved his previous cabinet earlier this month and invited all parties in parliament to form a unity government, but opposition groups and members of the ruling alliance rejected the idea.On Monday only five members of the previous cabinet were sworn in again, while most other portfolios were allocated to members of the ruling Sri Lanka Podujana Peramuna party.Among those not re-appointed from the previous cabinet were two more of the president’s brothers, Basil and Chamal, and the prime minister’s son Namal.The president said he would seek solutions to Sri Lanka’s problems, including via possible constitutional changes.”I am ready to extend my full support to Parliament at any time in this regard,” he said.He also said that a decision last year to ban all chemical fertilisers, which was later reversed but led to a drop in agricultural production, was a mistake. “I think the decision not to provide chemical fertilizers to farmers was an error. We have taken steps to revive that practice,” he said.Economic mismanagement by successive governments weakened Sri Lanka’s public finances, but the situation was exacerbated by deep tax cuts enacted by the Rajapaksa administration soon after it took office in 2019.Key sectors of the economy, particularly tourism, were then battered by the COVID-19 pandemic, while the government dragged its feet on approaching the IMF for help.Last week, the country’s central bank said it was unilaterally suspending external debt payments, instead using the country’s paltry foreign reserves of around $1.93 billion for importing essential goods.Moody’s cut Sri Lanka’s debt rating to “Ca” from “Caa2” on Monday, citing its external debt payment suspension.The agency maintained Sri Lanka’s outlook at stable. More

It was France that gave the world the concepts of the left and right in politics. Now it is France that is leading the way in the destruction of this divide and its replacement by a new politics, one in which the two dominant camps are nationalists and internationalists.The left-right cleavage has its origins in the French revolution of 1789 — when supporters of the royal veto stood on the right of the National Assembly and opponents stood to the left. Over the following two centuries, left and right became the central philosophical divide in western politics.But in the first round of the French presidential election on April 10, the traditional centre-right and centre-left parties collapsed. Anne Hidalgo, the Socialist Party candidate, got just 1.8 per cent and Valérie Pécresse, the candidate for the centre-right republicans 4.8 per cent. Jean-Luc Mélenchon, a far-left candidate, got 22 per cent of the vote, but was still eliminated.The final round of the election on April 24 will be contested between Emmanuel Macron and Marine Le Pen, candidates who both insist that the days of left-right politics are over.Although Le Pen is usually labelled as a far-right candidate, she rejects this, insisting that: “There is no more left and right. The real cleavage is between the patriots and the globalists.” Macron has also long argued that he is “neither right nor left”. As he told his biographer, Sophie Pedder: “The new political split is between those who are afraid of globalisation and those who see globalisation as an opportunity.”Le Pen uses “globalist” as a term of abuse. At a press conference in Paris last week, I heard her mock Macron for “speaking globish”. In a speech in Avignon the following day, she accused globalists of treating the French as rootless consumers rather than as citizens, attached to their culture and language.This kind of rhetoric is now a trademark of the nationalist right around the world. Influential political theorists in Vladimir Putin’s Russia — such as Aleksandr Dugin and Konstantin Malofeev — have frequently denounced “globalism” as a plot against the Russian nation and culture. Le Pen’s current pitch is also strongly reminiscent of Donald Trump, who as US president informed the UN that “The future does not belong to the globalists. The future belongs to the patriots.”A politics structured around a distinction between “globalists” and “patriots” disrupts traditional left-right dividing lines. Macron has adopted positions that would traditionally be regarded as leftwing on some social issues, such as gay rights, but his efforts to deregulate the economy and cut taxes would appeal to Reaganite conservatives. Le Pen, by contrast, takes hard-right positions on issues such as immigration and left-sounding positions on economics. The clearest dividing line between the two candidates is not left-right but nationalist-internationalist. Macron is a passionate advocate of deeper European integration. Le Pen wants to unravel the current EU and turn it into a Europe of nation-states. A similar disruption of traditional right-left categories has occurred in the US and Britain. Before Trump, the Republicans were the party of free-trade, globalisation and a hawkish foreign policy — causes associated with the right. But his America-first nationalism diverted the Republicans towards protectionism and isolationism, leaving the Biden wing of the Democrats as the guardians of traditional internationalist positions on foreign policy and trade. Brexit also restructured British politics around a nationalist-internationalist axis. This shift was obscured by the Brexiters adoption of “Global Britain” as a slogan. But the reality of Global Britain is tighter border controls and a reduction in international trade.Many Brexiters were attracted to the Global Britain slogan not because they are internationalists, but because it was an assertion of national greatness. The argument was that Britain is too globally significant to be restricted by membership of the EU.Le Pen has a similar vision for France. In her big foreign policy speech in Paris last week, she insisted that France is one of the world’s great powers with a global reach and destiny. As with the Brexiters, her vision of a global France is actually a form of chest-thumping nationalism.One of the main dangers of the spread of this kind of politics around the world is that it increases the chances of international conflict. The “globalists” that Le Pen and Trump love to deride are not, in general, people without roots or patriotism. But they are more likely to believe in the need for international co-operation to promote peace and prosperity and to manage global problems.Nationalists may theoretically accept the need for international co-operation on issues such as climate change or trade. In practice, they are temperamentally inclined to see international agreements as a betrayal of the nation or the product of some sort of globalist conspiracy. The politics of Le Pen, Trump or Putin — suspicious of foreigners and obsessed by the restoration of national greatness — can all too often lead to conflict. As a Balkan analyst once joked to me: “The trouble with our region is that there are too many great countries: greater Serbia, greater Albania, greater Croatia. But the results have been not so great.” The rise of nationalist politics around the world risks repeating that dismal pattern on a global [email protected] More

China’s economy expanded faster than expected in the first quarter but official data revealed a recent contraction in consumer activity as sweeping Covid-19 lockdowns clouded the country’s growth outlook.China’s gross domestic product rose 4.8 per cent compared with the same period a year earlier, after expanding 4 per cent in the final three months of 2021. On a quarter-on-quarter basis, GDP grew 1.3 per cent.Analysts had projected gains of 4.4 per cent year on year and 0.6 per cent quarter on quarter as Covid outbreaks have increased, leading authorities to largely seal off Shanghai, the country’s financial hub.Retail sales, a gauge of consumer spending, fell 3.5 per cent in March — their first year-on-year fall since July 2020 and worse than a projected 1.6 per cent decline — as authorities hardened restrictions to counter the country’s worst coronavirus outbreak in more than two years. In the same month, the official unemployment rate rose to 5.8 per cent, its highest level since May 2020.The data will heap greater pressure on President Xi Jinping’s government, which has reaffirmed its commitment to a zero-Covid policy despite the mounting costs and disruption across the country’s biggest cities. In March, the manufacturing hub of Shenzhen was locked down and in the same month the north-eastern city of Jilin was also closed off as part of an approach that has since spread across many other cities.The lockdowns came at a precarious moment for China’s economy following a debt crisis in its real estate sector and a wider loss of momentum. The government has targeted growth of 5.5 per cent in 2022, its lowest in three decades.Fu Linghui, a spokesperson for the National Bureau of Statistics, said that “the operation of the economy was generally stable” but pointed to “frequent outbreaks” of Covid in China and an “increasingly grave and complex international environment”.“The country is facing recurring waves of the pandemic in many places and its impact on the economy is increasing,” he said.Data for the first three months will not capture the full extent of recent events in Shanghai, which since late March has suffered China’s most severe citywide lockdown since the emergence of coronavirus in Wuhan. Analysts at Nomura last week estimated that 45 cities responsible for about 40 per cent of China’s GDP were under complete or partial lockdowns, and said the country was at “risk of recession”.Tommy Wu, lead China economist at Oxford Economics, suggested that the 4.8 per cent GDP increase “mainly reflects the growth seen in the official January-February data before the weakening in economic activities in March”.He added: “The central government is now trying to balance minimising disruption against controlling the latest wave of Covid infections, but the disruption is likely to last for weeks and will weigh on activity in April and into May, if not longer.” In contrast to the sudden weakness in consumer spending, industrial production, which was a big driver of China’s initial recovery from the pandemic in 2020, added 5 per cent year on year in March. Fixed asset investment rose 9.3 per cent in the first three months of 2022 compared with the same period last year.

Even before the outbreaks of the highly infectious Omicron variant gathered pace, China’s economy had been hit by a real estate crisis centred on indebted developer Evergrande that spread across the property sector. In a sign of the lingering effects of that crisis, new housing starts for apartments declined 20 per cent in the first three months of the year. Steel and cement production fell 6 and 12 per cent, respectively, in the same period.In addition to its lower annual growth target, the government has also embarked on monetary easing, which has included cutting crucial lending rates for the first time since 2020 despite a previous push to reduce leverage. The People’s Bank of China on Friday reduced the reserve requirement ratio for banks by 25 basis points in an effort to inject liquidity into the financial system.Xi, who is this year seeking an unprecedented third term in power, has promoted a “common prosperity” campaign designed to reduce inequality. But lockdown measures now dominate the country’s economic trajectory and have stoked anxiety over supply chain disruptions. Li Keqiang, China’s premier, has cautioned repeatedly in recent weeks of economic risks, following a warning from Xi in March of the need to minimise the economic impact of Covid policies.The CSI 300 index of Shanghai- and Shenzhen-listed stocks fell about 1 per cent on Monday after the data release. Banks were among the worst performers as lenders faced the prospect that policy easing to cushion the economic blow of lockdowns might hurt profits.“We definitely think that Chinese policymakers are willing to make sure they reach their growth targets,” said Jean-Charles Sambor at BNP Paribas Asset Management.Additional reporting by Hudson Lockett in Hong Kong and Maiqi Ding in Beijing

Video: Evergrande: the end of China’s property boom More

Janet Yellen, the US Treasury secretary, did something important and, for the most part, underreported last week. She relinked trade to values.In an address at the Atlantic Council in Washington, the secretary called for a new Bretton Woods framework and a revamp of the IMF and World Bank institutions, both of which are holding their annual meetings this week. She also made clear that Vladimir Putin’s war in Ukraine and China’s failure to join the US and more than 30 other nations in sanctions on Russia was a pivot point for the global economy. In the future, US trade policy would no longer involve merely leaving markets to their own devices, but rather would uphold certain principles — from national sovereignty and a rules-based order to security and labour rights. As she put it, America’s objective should be not just “free but secure trade”.Countries shouldn’t be allowed to use their “market position in key raw materials, technologies or products to have the power to disrupt our economy or exercise unwanted geopolitical leverage”. That was clearly a nod to Russian petropolitics but could just as easily cover Taiwanese chip manufacturing or China’s hoarding of rare earth minerals or, during the pandemic, personal protection equipment.Yellen coined a new word for this post-neoliberal era: “friend-shoring”. The US would now favour “the friend-shoring of supply chains to a large number of trusted countries” that share “a set of norms and values about how to operate in the global economy”. It would also seek to create principles-based alliances in areas like digital services and technology regulation, similar to last year’s global tax deal (which she spearheaded). This isn’t America Alone or even America First. But it does acknowledge the existence of a political economy in which free trade can only really be free if countries are operating with shared values, and an even playing field.That’s both different — and, in some crucial ways, not — from the neoliberal era that is passing. The term “neoliberalism” was first used in 1938, at the Walter Lippmann Colloquium in Paris, a gathering of economists, sociologists, journalists and businesspeople who wanted to find a way to protect global capitalism from fascism and socialism.It was a moment that chimed with our own in many ways. Europe had been pulled apart by the first world war. A decade of easy monetary policy up to 1929 had been unable to paper over major political and economic changes that had created huge rifts in societies. Labour markets and family structures were changing. A pandemic, inflation, then economic depression, deflation and trade wars had left the continent economically wrecked. Neoliberals wanted to fix these issues by connecting global markets. They believed that if capital and trade were connected via a series of institutions that could float over individual nation states, the world would be less likely to descend into anarchy. For a long time, this idea worked, in part because the balance between national interests and the global economy didn’t get too far out of whack. Even during the Reagan-Thatcher era in the 1980s, there was still a sense that global trade in particular needed to serve the national interest. As US president, Ronald Reagan may have been a free-trader but he used tariffs against Japan and also supported industrial policy (as did, and do, most other Asian and many European nations). In the US, that began to shift during the Clinton administration, which orchestrated a series of free-trade deals culminating in the entry of China into the World Trade Organization in 2001, in the hope that the country would become freer as it got richer. That, of course, didn’t happen. And now, finally, leaders everywhere are acknowledging the reality of the “one world, two systems” problem.Yellen says she hopes that “we don’t end up with a bipolar system”, particularly given how much China itself has benefited from the neoliberal system. “But real problems have emerged,” she acknowledges. “China relies in many ways on state-owned enterprises and engages in practices that I think unfairly damage our national security interests.” Multinational supply chains, “while having become very efficient and excellent at reducing business costs, have not been resilient”. Both issues, she says, must be addressed.Today’s crossroads is not unlike the one that faced the neoliberal thinkers who crafted the original Bretton Woods system. They started not with an idea of laissez-faire markets operating for their own sake, but rather with a very human problem — how to patch together a war-torn world to make a safer, more cohesive society, one in which freedom, liberty and prosperity would be guaranteed. Markets couldn’t do it alone. New rules were needed.That’s just where we are now. One may argue, as I would, that a pendulum shift is overdue. Global capitalism has, over the past 20 years in particular, simply run a bit too far ahead of the domestic concerns in some individual nation states. Countries with wildly different political, economic and even moral frameworks have not all played by the same global rules. Under those circumstances, fair and free markets begin to break down.The process of crafting a new Bretton Woods has only just begun. But starting with the values that liberal democracies want to uphold is a good [email protected] More

Alongside the sugarcane and soyabeans that sprout from his fields in the interior of São Paulo state, this year José Odilon De Lima Neto plans on sowing a different crop for the first time.“There may be an investment opportunity in wheat due to complications for summer planting in Ukraine and Russia,” said the farmer based near the city of Ribeirão Preto.International prices for the cereal have surged since Moscow invaded its neighbour, reflecting worries that the warring nations — which together account for about 30 per cent of all wheat trade — will struggle to deliver to the dozens of countries that rely on them for imports.As global food costs across the board touch record levels, according to a UN index, the conflict has compounded what the organisation’s food assistance agency says was already “destructive hunger”.Thousands of miles away, the signals from this nutrition crisis are rippling out in the South American breadbaskets of Brazil and Argentina, major sources of everything from soy and beef to maize and oranges.Many agricultural enterprises in the region are in line for a windfall from higher commodity prices, leading some such as De Lima Neto to expand output or even switch into new areas.But at the same time, elevated costs or looming scarcity of crucial inputs — such as fuel, fertilisers and animal feed — risk dragging on their ability to help guarantee global food security.A fall in production from Ukraine’s sunflower-oil sector — the world’s largest — is expected to help Argentine growers of soy, pictured, which can be used as a substitute  © Eitan Abramovich/AFP/Getty ImagesRussia’s assault on Ukraine began after decisions had been made for the summer planting season in Latin America and Brazil’s second corn crop, making it harder for producers to react immediately, said Vitor Andrioli, an analyst at consultancy StoneX.“A scenario where the conflict persists, and the prices of these commodities are sustained, would probably stimulate an expansion in the cultivation of grains and oilseeds on the continent,” he added.Although Brazil’s largely tropical climates limit wheat cultivation, it has exported more of the grain this year than in the whole of 2021. With advances in crop technology, experts believe the country — a traditional net importer of wheat — has the potential to become self-sufficient and even a net seller in the future.Caio Carvalho, president of the Brazilian Association of Agribusiness (Abag), cautioned that in the short term, however, the wider sector was unlikely to increase overall agricultural output hugely because of doubts over the duration of the war and where to ship to.“Producers cannot go on an adventure and expand supply if they don’t have the security of a market to sell to,” he said. While Brazil has strong sales in China, the Middle East and Russia, many richer economies remain relatively closed to its produce, he added.For now, Latin America’s dominant economy could assist in filling gaps in corn supply. Before the invasion, Ukraine was projected to be the third-largest corn exporter, just ahead of Brazil, according to a recent US Department of Agriculture report.

Similar to soy, it is mostly fed to animals, and Brazil is the third-largest producer behind only the US and China. Brasília’s state agriculture agency Conab estimates outbound corn shipments will increase by three-quarters in 2022.“It is a great opportunity,” said Cesar Ramalho, a grower and president of the industry association Abramilho. “Corn is at a very inviting price for Brazil to increase production”.Farmers in Argentina’s fertile Pampas region are planting more sunflower seeds to take advantage of the disruption. The plants adapt well to parched soil and need less fertiliser, an extra incentive given recent price rises for the chemical nutrients and forecasts for dry weather later this year.But critics of the Buenos Aires administration warn state intervention and high inflation of more than 50 per cent are discouraging further activity in the farming sector.Stricter protectionist measures, such as taxes of up to 33 per cent on exports and price controls on items such as bread, coupled with a chaotic exchange rate regime, could result in farmers waiting for domestic conditions to improve, they argue.“The risk is that the signal to plant more won’t reach them, and that’s bad for everyone, not just Argentina,” said Gustavo Grobocopatel, who heads one of the country’s largest farming groups, Los Grobo. “Argentina should be producing 40 per cent more than it does [in agriculture].”In addition, diesel shortages in Argentina have sparked trucker strikes — along with warnings about possible impacts on the harvest and transportation of crops.Another challenge is that this highly productive corner of the planet is still emerging from a period of severe drought that has damped growth in agricultural output and inflicted financial harm.For Brazil in particular one concern is fertilisers, which became more expensive before the war. The country imports 85 per cent of those chemical nutrients that it consumes, with about one-quarter from Russia.“For the planting season in September, it’s going to depend a lot on the availability of fertilisers. A lack could lead to a drop in productivity,” said Carvalho of Abag. “I’m very worried.”On the other side of the commodities rally buoying arable farmers, meat producers who rely on grains as animal feed are feeling the pinch.Already the world’s largest exporter of beef and chicken, analysts said Brazil could replace any volumes lost because of the war in Ukraine.Yet in certain meat categories, overseas demand is failing to offset higher input costs and weakened purchasing power at home, where poorer consumers are cutting back on the basics amid double-digit inflation.In Brazil’s central-west state of Goiás, pig farmer Euclides Costenaro is at the sharp end of oversupply and falling sales values. Like many of his peers he is downsizing his herd, from 5,000 sows to about 3,800.“Today each producer loses from R$200 to R$350 [$43 to $75] for each hog he resells,” he said. “The damage is very heavy, we have never experienced this before.”There are also difficulties for some livestock ranchers, such as Nabih Amin El Aouar, who has 3,000 head of cattle in the state of Espírito Santo.“Exports have accelerated, but this does not fully compensate for the drop in domestic consumption,” he said.Additional reporting by Carolina Ingizza in São Paulo More

The number of births in advanced economies has largely rebounded to levels before the coronavirus pandemic, a Financial Times analysis shows, a recovery that experts say was partly because of stimulus policies deployed to mitigate the economic impact of the crisis.Births began to fall sharply in late 2020 after Covid-19 took hold and people were confined to their homes in lockdown, worsening an already perilous demographic trend of population decline in wealthy nations. The trend mirrored drops during the 1918 flu pandemic, the Great Depression and the global financial crisis in 2008. But an analysis of national data shows a rapid rebound in most developed countries.“The short-term decline in births observed in many countries is consistent with other historical crises . . . but in the case of Covid-19, these declines have been more shortlived,” the UN said. This is largely because of government spending and efforts to make and distribute Covid vaccines. The economic uncertainty caused by the pandemic was “addressed by the stimulus packages and the expansionary reactions of central banks”, said Klaus Prettner, professor of economics at Vienna University of Economics and Business. The pandemic effect When many countries first imposed lockdowns to counter the pandemic in early 2020, sexual activity declined, according to a survey by French polling company Ifop. Between the end of 2020 and the first half of 2021, nine months after the first lockdowns, countries ranging from China to France reported their lowest number of births on record. Italy had fewer births in 2021 than at any time since the country was created in 1861.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Fertility rates refer to the average number of babies a woman is projected to have over her lifetime. It is generally accepted by demographers that a country’s population can only grow without net inward migration if couples have at least 2.1 children on average. Many developed economies already have fertility rates well below that. Kate H Choi, director of the Centre for Research on Social Inequality, said people tended to have fewer children when faced with “a long-lasting, catastrophic event resulting in high levels of uncertainty”. Covid-era couples “may not wish to bring a child into this world if they don’t know where their next pay cheque is coming from”, she said.But births began to recover later in 2021 in countries including the US, the Nordics, Australia and Israel — returning to, and in some cases exceeding, the pre-pandemic trend in what demographers said was a catch-up effect.In England ​​and Wales, births decreased by 5 per cent in the first half of 2021 compared with the same period in 2019. By the second half of the year, the number of births had returned to the 2019 level. By the end of 2021, the countries had registered the first annual rise in births since 2015. After experiencing a sharp decline in births, Spain had more births in March and April 2021 than in the same period in 2020. In Germany, there were more births in March 2021 than in any other March in the past 20 years.In the US, the Census Bureau observed that the number of babies born between December 2020 and February 2021 was unusually low, equivalent to 763 fewer births each day in December. “That is very likely the result of the Covid-19 pandemic,” said Anne Morse, a demographer at the Census Bureau. By the second half of 2021, the US recorded the same number of births as the same period in 2019.Population experts and economists credit the monetary and fiscal stimulus launched by many governments in the early months of the pandemic as a crucial factor that helped stave off a longer-lasting decline in births. Karoline Schmid, who heads the fertility and population ageing section at the UN Department of Economic and Social Affairs, said stimulus initiatives played a role in preventing a steep drop in fertility rates by providing a financial buffer against economic uncertainty. “Fertility declines during and immediately after economic crises are caused by couples postponing childbearing due to rising unemployment, increasing job insecurity and reduced household income,” she said. “The monetary stimulus from governments in some countries helped to prevent sharp fertility drops early in the pandemic.”The baby bustThat still leaves the world facing the same demographic time bomb as before the pandemic: declining fertility rates that threaten to slow global growth and leave countries contending with the costs of ageing populations.The global fertility rate peaked at five in 1960 and has since been in freefall. As a result, demographers believe that, after centuries of booming population growth, the world is on the brink of a natural population decline. According to a Lancet paper published in 2020, the world’s population will peak at 9.7bn in about 2064, dropping to 8.7bn around the end of the century. About 23 nations can expect their populations to halve by 2100: Japan’s population will fall from a peak of 128mn in 2017 to less than 53mn; Italy’s from 61mn to 28mn.Low fertility rates set off a chain of economic events. Fewer young people leads to a smaller workforce, hitting tax receipts, pensions and healthcare contributions.“An economy with a labour shortage problem may experience higher labour costs, declining productivity and a lower standard of living,” said Choi.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Christopher Murray, one of the Lancet report’s authors, said it was hard to overstate the economic and social impact the decline in fertility would have. “We will have to reorganise society,” he said.But the future does not have to be apocalyptic. As well as widely reported benefits to the environment, the decline in fertility could lead governments to invest more in education, according to Prettner. “When fertility rates decrease, governments have more resources to spend in schooling,” he said. “Many of the possible negative economic consequences of declining fertility can be compensated by the associated higher productivity that these children later have within the labour market.”Additional reporting by Valentina Romei in London More

BEIJING (Reuters) – China’s economy slowed in March as consumption, real estate and exports were hit hard, taking the shine off faster-than-expected first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs and the Ukraine war.The biggest near-term challenge for Beijing is the tough new coronavirus rules at a time of heightened geopolitical risks, which have intensified supply and commodity cost pressures, leaving Chinese authorities walking a tight rope as they try to stimulate growth without endangering price stability. Gross domestic product (GDP) expanded by 4.8% in the first quarter from a year earlier, data from the National Bureau of Statistics showed on Monday, beating analysts’ expectations for a 4.4% gain and picking up from 4.0% in the fourth quarter.A surprisingly strong start in the first two months of the year improved the headline figures, with GDP up 1.3% in January-March in quarter-on-quarter terms, compared with expectations for a 0.6% rise and a revised 1.5% gain in the previous quarter.Analysts say April data will likely be worse, with lockdowns in commercial centre Shanghai and elsewhere dragging on, prompting some to warn of rising recession risks.”Further impacts from lockdowns are imminent, not only because there has been a delay in the delivery of daily necessities, but also because they add uncertainty to services and factory operations that have already impacted the labour market,” said Iris Pang, Greater China chief economist at ING.”We may need to revise our GDP forecasts further if fiscal support does not come in time.”China’s shares fell, likely reacting to the March numbers and a weak outlook – the blue chip CSI300 index was down 0.6%, while the Shanghai Composite Index dropped 0.5%.WORSENING RETAIL SALES, JOBLESS RATEData on March activity showed retail sales contracting the most on an annual basis since April 2020 on widespread COVID curbs across the country. They fell 3.5%, worse than expectations for a 1.6% decrease and an increase of 6.7% in January-February. The job market is already showing signs of stress in March, a usually robust month for labour market as factories resume hiring after the Lunar New Year holiday. China’s nationwide survey-based jobless rate stood at 5.8% in March, the highest since May 2020, while that in 31 major cities hit a record 6.0%. The industrial sector held up better with production expanding 5.0% from a year earlier, compared with forecasts for a 4.5% gain. That was down from a 7.5% increase in the first two months of the year.Fixed asset investment, a driver of growth that Beijing is counting on to underpin the economy, increased 9.3% year-on-year in the first quarter, compared with an expected 8.5% increase but down from 12.2% growth in the first two months.Analysts at Capital Economics and Nomura believe the official GDP figures may have understated the slowdown last quarter.Capital Economics says growth in services production index for Q1 does not align with the expansion of the services sector in the GDP data, while Nomura said some of the March data, such as industrial production, are hard to reconcile with many other indicators of industrial activity.Home sales by value in March slumped 26.2% year-on-year, the biggest drop since January-February 2020, according to Reuters calculations, pointing to a deepening downturn in the property market.’HIGHLY COSTLY’ COVID-19 CURBSThe government’s determination to stop the spread of record COVID-19 cases has clogged highways and ports, stranded workers and shut factories – disruptions that are rippling through global supply chains for goods from electric vehicles to iPhones.The contribution from net exports to GDP growth fell to 3.7% in the first quarter from 26.4% in the fourth as momentum ebbed. Fu Linghui, a NBS spokesman, acknowledged the increase in downward economic pressure.”We will step up the implementation of macro policies, make every effort to stabilise the economic fundamentals, and strive to achieve the targets and tasks for the year,” Fu told a news conference. The People’s Bank of China (PBOC) said on Monday it would step up support for industries, firms and people hit by COVID-19 in its latest move to cushion them from the impact of economic slowdown.Late on Friday, the PBOC said it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity, although the reduction missed expectations.Analysts see less room for more China rate cuts, after the smaller-than-expected RRR reduction, which they say reflected the PBOC’s concern about inflation and U.S. monetary tightening.”The government faces a dilemma: how to balance economic growth and containing the outbreaks. Locking down large cities like Shanghai is highly costly,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “Such costs will become more visible in coming months.” More