Economy

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen pledged U.S. support for Egypt’s economy and reforms after meeting with the North African nation’s authorities on Tuesday in Washington amid talks over expanding Egypt’s $3 billion International Monetary Fund loan program.The Egyptian officials, including the country’s finance minister and central bank governor, also were due to meet with IMF Managing Director Kristalina Georgieva during their visit to Washington on Tuesday, an IMF spokesperson said, without providing further details.The high-level meetings come as U.S. Secretary of State Antony Blinken visits the Middle East and works to prevent the Israel-Gaza war from expanding into a wider regional conflict.Georgieva told Reuters in November that the IMF was “seriously considering” augmenting Egypt’s $3 billion loan program as the country struggles with the economic impact from Israel’s invasion of Gaza.Already facing high foreign debt levels, Egypt has been hit hard by the war in the neighboring Gaza Strip, which threatens to disrupt tourism bookings and natural gas imports, as well as recent attacks on Red Sea ships.A statement from Treasury said that Yellen discussed challenges to Egypt from the Gaza war during her meeting with Egyptian Finance Minister Mohamed Maait, Minister of International Cooperation Rania Al-Mashat, and Central Bank of Egypt Governor Hassan Abdalla.”Secretary Yellen underscored strong United States support for Egypt and its economic reform program. She underscored the goal of bolstering Egypt’s economy and supporting inclusive, sustainable growth,” the Treasury said.Egypt’s $3 billion loan program agreed with the IMF in December 2022 faltered after the North African country failed to let its currency float freely or make progress on the sale of state assets. The IMF, in which the U.S. is the largest shareholder, delayed disbursements of about $700 million expected in 2023, but in December said it was in talks to expand the $3 billion program given economic risk from the Israel-Gaza war.A spokesperson for Egypt’s embassy in Washington could not be reached for comment. More

WASHINGTON (Reuters) -The Federal Aviation Administration is facing questions about its oversight of planemaker Boeing (NYSE:BA) following the emergency landing on Friday of an Alaska Airlines 737 MAX 9.Mike Whitaker, who took over as the agency’s head in late October, will testify before the U.S. House Transportation and Infrastructure Committee on Feb. 6, sources said. The hearing was in the works before the Alaska Airlines flight and is expected to cover a broad range of issues.The 737 MAX is certain to come up at the hearing, the sources said.The FAA, which was without a permanent administrator for 18 months until Whitaker’s 98-0 confirmation, has come under growing scrutiny after a series of potentially catastrophic near-miss aviation safety incidents, persistent air traffic control staffing shortages and a January 2023 pilot messaging database outage that disrupted 11,000 flights.Democratic Senator Richard Blumenthal on Tuesday asked the FAA to answer detailed questions about its handling of the Alaska Airlines incident.The FAA MAX 9 grounding order “is the least that should be done,” Blumenthal said, adding he wanted to know “what more the FAA is doing to ensure our skies are safe.”Blumenthal added: “This disturbing event is another black mark for Boeing’s 737 MAX aircraft fleet and troublingly, appears to be part of a wider pattern.” The FAA grounded 171 MAX 9 airplanes on Saturday and said on Tuesday they would remain out of the sky until the agency was satisfied with Boeing’s inspection and maintenance instructions. Republican Senator J.D. Vance on Tuesday urged the Senate Commerce Committee to hold a hearing. “Every American deserves a full explanation from Boeing and the FAA on what’s gone wrong and on the steps that are being taken to ensure another incident does not occur in the future,” he said.The FAA has scrutinized Boeing’s quality and other issues in recent years as it faced harsh criticism for its actions in the run-up to the MAX certification. Following two fatal crashes in 2018 and 2019, the FAA grounded the plane for 20 months and mandated significant software and training improvements.Boeing declined to comment on Tuesday. The FAA continues to inspect each 737 MAX before an “airworthiness certificate is issued and cleared for delivery,” the agency has noted. Typically the FAA delegates the final signoff on individual airplanes to the manufacturer once the model has been certified.Alaska Airlines and the other U.S. 737 MAX 9 operator, United Airlines, said on Monday they found loose parts on multiple grounded aircraft.The FAA did not directly answer questions about how it typically inspects those bolts before approving a plane for service. “The FAA inspects every airplane prior to issuing an airworthiness certificate,” a spokesperson said.The agency is still deciding whether to certify the smaller MAX 7. Whitaker told Reuters in an interview last month that he has no “specific timetable” to certify the plane, adding the agency will certify the plane when “we have all the data that we need and it is safe.”A 2020 congressional report concluded the MAX crashes “were the horrific culmination of a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of Boeing’s management, and grossly insufficient oversight by the FAA.”After the Alaska Airlines data from last Friday’s emergency landing was lost, National Transportation Safety Board Chair Jennifer Homendy this week criticized the FAA’s decision not to require retrofitting of airplanes with recorders that capture 25 hours of data. The FAA has boosted Boeing oversight staffing and in 2022, the agency gave Boeing a shorter regulatory compliance program extension than the planemaker sought in order to “verify that Boeing completes required improvements.” More

Japan’s wage trend draws an unusual amount of attention from financial markets worldwide since the Bank of Japan regards pay and inflation outlooks as the most important data in considering the dismantling of its negative interest rate policy.Inflation-adjusted real wages, a key determinant of consumer purchasing power, fell 3.0% in November from a year earlier, faster than a 2.3% decrease in October, data from the labour ministry showed.The consumer inflation rate the government uses to calculate real wages, which includes fresh food prices but excludes owner’s equivalent rent, decelerated to 3.3%, the lowest since July 2022, thanks to falling fuel costs and moderating food price hikes.However, nominal pay grew a paltry 0.2% in November, the slowest in nearly two years, after a 1.5% increase in October. The main culprit behind the weak pay growth was a 13.2% contraction in special payments, which gives an early glimpse into the winter bonuses companies paid to employees. But the indicator tends to be very volatile this time of year due to the small sample size collected during the year-end period.”It’s too early, if not misleading, to judge the winter bonus trends from November’s special payments figure alone,” a labour ministry official said.Regular or base salary in November rose by 1.2% year-on-year, almost the same as a revised 1.3% increase in the previous month. Overtime pay, an indicator of business activity strength, increased by 0.9% year-on-year, the first gain in three months.Japanese businesses are entering the collective pay talks season known as “shunto”, which culminates in March. Last year, major firms struck a deal with unions that resulted in the largest pay rises – 3.58% – in three decades amid four-decade-high inflation.For the 2024 shunto, the country’s biggest labour group Rengo has said it will ask for at least a 5% pay increase, including at least 3% base salary growth, to cushion the lasting blow from higher living costs.Meanwhile, Tokyo’s consumer inflation, a leading indicator of nationwide price trends, showed a further slowdown on Tuesday, raising hopes for real wages to rebound eventually, which will provide supporting ground for the Bank of Japan’s monetary policy normalisation.The table below shows preliminary data for monthly incomes and number of workers in November:—————————————————————-Payments (amount) (yr/yr % change)Total cash earnings 288,741 yen ($2,004) +0.2-Monthly wage 272,379 yen +1.2-Regular pay 252,591 yen +1.2-Overtime pay 19,788 yen +0.9-Special payments 16,362 yen -13.2—————————————————————-Number of workers (million) (yr/yr % change)Overall 52.807 +2.0-General employees 35.686 +1.5-Part-time employees 17.121 +3.6—————————————————————-The labour ministry defines “workers” as 1) those employed for more than one month at a company that employs more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.To view the full tables, see the labour ministry’s website at: ($1 = 144.1000 yen) More

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Prime Minister Fumio Kishida’s cabinet is expected to approve the plan as early as Jan. 16, the report said.The cabinet earlier on Tuesday approved 4.74 billion yen in spending from fiscal 2023/24 reserves for such aid as water, food, diapers and heaters, Minister of Finance Shunichi Suzuki said.The magnitude 7.6 earthquake that hit the Noto peninsula on Japan’s west coast on New Year’s Day killed more than 200 people, making it the deadliest since the 2016 quake in Kumamoto on the southern island of Kyushu.($1 = 144.4200 yen) More

WASHINGTON (Reuters) – U.S. Senate Republicans said on Tuesday that a short-term funding measure will be needed to avert a partial federal government shutdown beginning in 10 days – a notion Republican House Speaker Mike Johnson could have trouble swallowing.Senate Republican leader Mitch McConnell told reporters that lawmakers will “obviously” need a short-term continuing resolution, or “CR,” to allow bipartisan negotiators from both chambers time to agree on full-year 2024 spending bills and for Congress to enact the legislation. “We’re going to have to pass a CR,” McConnell said. “We need to prevent a government shutdown.”A short-term CR could put top House of Representatives Republican Johnson in a precarious position, after he pledged last year to oppose further short-term CRs, absent real progress on full-year funding and substantial policy reforms. His office was not immediately available for comment on Tuesday.Schumer and Johnson on Sunday agreed to $1.59 trillion in discretionary spending for fiscal 2024, which began on Oct. 1.Earlier on Tuesday, Senator John Thune, the chamber’s No. 2 Republican, told reporters that lawmakers would most likely need a CR that lasts until sometime in March.Democratic Senate Majority Leader Chuck Schumer declined to answer a reporter’s question about the potential for a CR. House and Senate appropriations committees have been unable to agree on the 12 annual bills needed to fund the government for fiscal 2024, because of disagreements over the total amount of money to be spent. Under the current arrangement, funding will expire on Jan. 19 for federal programs involving transportation, housing, agriculture, energy, veterans and military construction. Funding for other parts of the government, including defense, will continue through Feb. 2. The Schumer-Johnson deal is opposed by hardline Republicans in both the House and Senate, who wanted less spending and are pushing for policy changes, including restrictions on the U.S.-Mexico border.McConnell attributed any opposition to a short-term CR in the House to a misunderstanding of the time-consuming parliamentary procedures the Senate must follow. “The simplest things take a week in the Senate. So, I think frequently the House doesn’t understand how long it takes to get something through the Senate,” the Kentucky Republican said. More

(Reuters) – A look at the day ahead in Asian markets.Australian inflation tops the Asian-Pacific economic calendar on Wednesday with the latest Chinese lending figures potentially due for release too, as investors also grapple with mixed news from the Asian tech sector. Wall Street’s lackluster performance on Tuesday is unlikely to provide much impetus – the Nasdaq closed flat while the Dow and S&P 500 slipped into the red – so perhaps the key regional indicators will give markets some early direction.Australia’s weighted annual consumer price inflation rate is expected to have fallen sharply in November to 4.4% from 4.9%. This would be the lowest in almost two years, and would follow an even steeper fall the month before to 4.9% from 5.6%.Aussie swaps markets are indicating around 50 basis points of rate cuts from the central bank this year, with the first quarter-point cut coming by August. A weaker-than-expected CPI report could well increase these policy easing expectations.New bank loans in China, meanwhile, likely rose in December, bringing 2023 lending to a new record high as the central bank keeps policy accommodative to support a shaky economic recovery.Figures this week are expected to show that Chinese banks issued 1.40 trillion yuan in net new yuan loans last month, up from 1.09 trillion yuan in November. If these numbers are borne out, total new lending in 2023 would hit 22.98 trillion yuan, beating the previous record of 21.31 trillion yuan in 2022.But China’s economy and markets are still underperforming and struggling to convince foreign investors that 2024 will witness a meaningful recovery. Rising tensions with Taiwan, which goes to the polls on Saturday, won’t help either. Taiwan on Tuesday reported a stronger-than-expected rise in exports in December thanks to a near 50% surge in sales to the United States. But China remained a weak spot – Taiwan’s exports to China fell 6.4%.Later on Wednesday Taiwan’s TSMC, the world’s largest chipmaker, unveils its latest monthly sales figures. Asian tech has got off to a particularly rocky start this year, with the MSCI Asia IT index down 4.5% since the turn of the year and the Asia ex-Japan equivalent down 5%. That compares to the Nasdaq’s 1% year-to-date slip. Sentiment will have been dented further by Samsung (KS:005930), which reported a likely 35% drop in fourth-quarter operating profit on Tuesday, much worse than analysts expected.If there has been little New Year cheer across major U.S. and global stock markets, it has been in even shorter supply in Asia. The MSCI Asia & Pacific ex-Japan share is down 3.5% so far this year, compared with a decline of around 1% for the MSCI World index and S&P 500.Here are key developments that could provide more direction to markets on Wednesday:- South Korea unemployment (December)- Australia CPI inflation (November)- China lending (December) (By Jamie McGeever) More

In its latest semiannual Global Economic Prospects report, the World Bank highlighted several factors contributing to the subdued economic outlook. Advanced economies are expected to see growth of merely around 1.2%, while emerging markets and developing nations are predicted to experience growth rates below 4%. This is a marked shift from past trends where emerging economies often exhibited more robust growth figures.One of the key focal points of the report is China, which is projected to encounter a considerable slowdown in its economic expansion compared to last year’s performance. The World Bank pointed to several challenges facing the Asian giant, including a decline in consumer spending, structural issues such as an ageing population and high levels of debt.The broader implications of these projections are significant, with the World Bank suggesting that the global economy could be entering a “decade of missed opportunities.” This period may be characterized by the weakest growth since the 1990s for most countries, due in part to the persistent recovery efforts from the pandemic and increased frequency and intensity of natural disasters driven by climate change.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More