Economy

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KAZAN, Russia (Reuters) -India’s Narendra Modi told Russian President Vladimir Putin on the eve of the BRICS summit that he wanted peace in Ukraine and that New Delhi was ready to help achieve a truce to end Europe’s deadliest conflict since World War Two.Putin, who ordered tens of thousands of troops into Ukraine in February 2022, wants the BRICS summit to showcase the rising clout of the non-Western world after the United States and its European and Asian allies tried to isolate Russia over the war.Russia is expecting 22 leaders, including Chinese President Xi Jinping who arrived on Tuesday, to attend the summit meeting of the BRICS, which accounts for 45% of the world’s population and 35% of the global economy.Putin, who is cast by the West as a war criminal, thanked Prime Minister Modi for accepting the invitation to visit Kazan, a city on the banks of the Volga, and said Russia and India shared a “privileged strategic partnership”.Modi thanked Putin for his “strong friendship”, praised growing cooperation and the evolution of BRICS but also said that India felt the conflict in Ukraine should be ended peacefully.”We have been in constant touch on the subject of the ongoing conflict between Russia and Ukraine,” Modi said. “We believe that problems should be resolved only through peaceful means.” “We fully support the early restoration of peace and stability. All our efforts give priority to humanity. India is ready to provide all possible support in the times to come,” he said, adding that he would discuss the issues with Putin.The BRICS summit takes place as global finance chiefs gather in Washington amid war in the Middle East as well as Ukraine, a flagging Chinese economy and worries that the U.S. presidential election could ignite new trade battles.With BRICS expanding – and a waiting list of potential members – there is anxiety among some about whether expansion will make the group unwieldy. China and India, the top purchasers of Russian oil, have difficult relations, while there is little love lost between Arab nations and Iran.SECURITY INTERESTSWhen asked by BRICS reporters about the prospects for peace, Putin said that Moscow would not trade away the four regions of eastern Ukraine that it says are now part of Russia and that Moscow wants its long-term security interests taken into account in Europe. Two Russian sources said that, while there was increasing talk in Moscow of a possible ceasefire agreement, there was nothing concrete yet – and that the world was awaiting the result of the Nov. 5 presidential election in the United States.Russia, which is advancing, controls about one fifth of Ukraine, including Crimea which it seized and unilaterally annexed in 2014, about 80% of the Donbas – a coal-and-steel zone comprising the Donetsk and Luhansk regions – and over 70% of the Zaporizhzhia and Kherson regions. Putin said the West had now realised that Russia would be victorious, but that he was open to talks based on draft ceasefire agreements reached in Istanbul in April 2022. On the eve of the BRICS summit, Putin met with United Arab Emirates President Sheikh Mohammed bin Zayed Al Nahyan for informal talks that went on until midnight at his Novo-Ogaryovo residence outside Moscow. BRICS Putin has praised both Sheikh Mohammed and Saudi Crown Prince Mohammed bin Salman, who will not attend the summit in Kazan, for their mediation efforts over Ukraine. “We are ready to make any efforts to resolve crises and in the interests of peace, in the interests of both sides,” Sheikh Mohammed told Putin.Brazilian President Luiz Inacio Lula da Silva cancelled his trip following medical advice to temporarily avoid long-haul flights after a head injury at home.The acronym BRIC was coined in 2001 by then-Goldman Sachs chief economist Jim O’Neill in a research paper that underlined the massive growth potential of Brazil, Russia, India and China this century.Russia, India and China began to meet more formally, eventually adding Brazil, then South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Saudi Arabia has yet to formally join.BRICS’ share of global GDP is forecast to rise to 37% by the end of this decade while the share accounted for by the Group of Seven major Western economies will decline to about 28% from 30% this year, according to International Monetary Fund data. Russia is seeking to convince BRICS countries to build an alternative platform for international payments that would be immune to Western sanctions.  More

Save over 65%$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More

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BENGALURU (Reuters) – The South Korean economy likely returned to growth last quarter after a mild contraction in the prior quarter thanks to an export-led expansion that offset higher borrowing costs squeezing domestic demand, a Reuters poll found.After an unexpected 0.2% contraction in the April-June quarter, Asia’s fourth-largest economy was projected to have grown a seasonally adjusted 0.5% in the third quarter, according to a median forecast from 23 economists.On an annual basis, the economy expanded 2.0% last quarter, according to the median forecast of 26 economists polled Oct. 15-21, down from 2.3% in the previous quarter.”We expect…Q3 GDP data to show lackluster growth. While exports remained robust, sluggish domestic demand, as reflected by various high-frequency indicators, including retail sales and construction, was a drag,” said Khoon Goh, head of Asia research at ANZ.South Korea’s monthly exports have grown by almost 10% this year on average up to September, largely driven by semiconductor demand from the United States, helping the trade-dependent economy avoid a technical recession commonly defined as two consecutive quarters of contraction.However, the pace of export growth has cooled in recent months as trade moderated with China – South Korea’s top trading partner – as well as Japan and India.High borrowing costs are impacting domestic consumption amid household debt levels that are among the highest in the developed world.In a bid to revive ailing demand, the Bank of Korea (BOK) cut its policy rate by 25 basis points this month from a 15-year high of 3.50%.However, the BOK is expected to maintain its current stance for the rest of the year and only cut 50 basis points next year, while the U.S. Federal Reserve is expected to reduce rates by 150 basis points by end-2025, according to separate Reuters polls.”A modest rebound in GDP growth should support the BOK pivot that we saw at the October meeting, but a back-to-back rate cut in November is unlikely, in our view, given the lingering concerns on the housing market,” said Suktae Oh, chief Korea economist at Societe Generale (OTC:SCGLY).Amid an uneven recovery in China, and slowing demand from the U.S., South Korea’s economic growth was expected to average 2.4% this year, aligning with the central bank’s downwardly revised forecasts. More

(Reuters) -Four Federal Reserve policymakers on Monday expressed support for further interest-rate cuts, but appeared to differ on how fast or far they believe any cuts should go. Three of them, citing the strength of the economy and an uncertain outlook, expressed a preference for going slow, using words like “modest” and “gradual” to describe their views on the right pace for rate cuts.The fourth, San Francisco Fed President Mary Daly, said she feels Fed policy is “very tight” and does not believe that a strong economy, as long as inflation continues to fall, should keep the central bank from continuing to reduce rates. The remarks provide a small taste of what’s expected to be a broad but closed-door debate of the appropriate path for policy at the Fed’s upcoming policy meeting, on Nov. 6-7. After Friday, U.S. central bankers will observe a communications blackout — abstaining from any public comments on their monetary policy views — until the Fed announces its policy decision at the close of the two-day meeting on Nov. 7.”While I support dialing back the restrictiveness of policy, my preference would be to avoid outsized moves, especially given uncertainty over the eventual destination of policy and my desire to avoid contributing to financial market volatility,” Kansas City Fed President Jeffrey Schmid told the Certified Financial Analysts Society of Kansas City, in Missouri. He said he believes rate cuts should be gradual and deliberate. Dallas Fed President Lorie Logan, speaking earlier in the day to the Securities Industry and Financial Markets Association in New York, made similar remarks. “If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our goals,” she said. The Fed last month cut the policy rate by a bigger-than-expected half of a percentage point, to a range of 4.75% to 5%, given cooling in both inflation and labor markets. It was the first rate cut in four years. Fed policymakers’ economic projections published at the time showed that most thought further, and likely smaller, interest-rate reductions would be appropriate.Since then, strong retail sales and bigger-than-expected job growth in September have boosted speculation that the Fed could cut rates even more slowly, perhaps even pausing at next month’s rate-setting meeting or the one in December. Daly, in a webcast interview with the Wall Street Journal, gave no indication she would support a pause.”I haven’t seen any information that would suggest we wouldn’t continue to reduce the interest rate consistent with achieving that durable expansion,” she said, when asked about the November decision. “This is a very tight interest rate for an economy that already is on the path to 2% inflation, and I don’t want to see the labor market slow further.” The Fed, she added, should be “open-minded” to the possibility that stronger productivity growth may be allowing the economy to grow faster without pushing up on inflation, allowing the central bank to continue to reduce rates. Of the four Fed officials who spoke on Monday, Daly is the only current voter on the policy-setting Federal Open Market Committee, though all policymakers attend meetings and voice opinions.Minneapolis Fed President Neel Kashkari on Monday appeared to endorse a go-slow approach to rate cuts, repeating his call for “modest” interest rate cuts over the next “several quarters.” He said the economy’s strength shows the eventual resting point for the policy rate — what is known as the neutral rate, where borrowing costs neither slow nor stimulate growth — may be higher than it was in the past, a point that Schmid also made. “We want to keep the labor market strong and we want to get inflation back down to our 2% target,” Kashkari said, and the appropriate path of interest rates will “depend on the data.”But Kashkari said that a sharp deterioration of labor markets could move him to advocate for faster cuts.     “If we saw a weakening, like real evidence that the labor market is weakening quickly, then that would tell me, as one policymaker, ‘Hey, maybe we ought to bring down our interest rate more quickly than I currently expect,'” Kashkari said in a town hall at the Chippewa Falls Area Chamber of Commerce. More