Economy

Argentina’s powerful left has vowed to fight austerity measures set out by the new maverick libertarian President Javier Milei after his government pledged to halt new public works, halve government ministries and slash subsidies in an attempt to balance the budget next year.Union leaders called urgent meetings as Milei announced more details of his “shock therapy” plans, while Axel Kicillof, the governor of Buenos Aires province from the left-leaning populist Peronist movement, promised: “We are going to fight boldly . . . we will have to be much more creative and much more militant.”Milei’s new government will reduce transfers to provincial governments, increase import taxes to 17.5 per cent and restore personal income taxes cut by the outgoing government, according to announcements on Tuesday and Wednesday, as it pushes to quickly eradicate the estimated budget deficit of 5.2 per cent of GDP.Union founder and campaigner Juan Grabois described economy minister Luis Caputo as a “psychopath on the verge of massacring his defenceless victims”. He said on X: “Do they seriously think people aren’t going to protest? . . . People won’t allow themselves to be led to slaughter.”Milei’s government argues the reforms are badly needed in the face of persistent deficits. The country also faces inflation expected to top 200 per cent this year, empty government coffers and a looming recession.Argentina has artificially fixed the peso’s exchange rate since 2019 More

Wholesale prices were flat in November, providing a leading indicator that inflation is easing, the Labor Department reported Wednesday.
The producer price index, which measures a broad range of prices on final demand items, was unchanged for the month, following a 0.4% decrease in October but less than the Dow Jones estimate for a 0.1% gain. On a year-over-year basis, headline PPI accelerated just 0.9%, after peaking above 11.5% in March 2022.

Excluding food and energy, the index also was unchanged against an estimate for a 0.2% increase. Excluding food, energy and trade services, PPI increased 0.1%, posting a sixth straight increase and good for a 12-month gain of 2.5%.
The release comes a day after the Labor Department said its consumer price index rose just 0.1% in November and 3.1% from a year ago. The PPI gauges the prices producers receive for what they produce while CPI measures what consumers pay and is considered a leading signal for prices in the pipeline.
Together, the easing inflation data, along with other economic signals, likely will give the Federal Reserve enough room to hold benchmark interest rates steady when its policy meeting concludes Wednesday.
At the wholesale level, indexes for both goods and services were unchanged, though there were some big swings within components.
Gasoline, for instance, fell 4.1% while chicken eggs soared 58.8%. The index for final demand energy fell 1.2%, offsetting increases of 0.6% for foods and 0.2% for goods less food and energy.

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Surging interest rates and waning financing options threaten a “lost decade” for poor countries.Surging interest rates are saddling the world’s poorest countries with record levels of debt and complicating investments in public health, education and infrastructure initiatives that are key to helping their populations emerge from poverty, the World Bank warned on Wednesday.In its latest report on international debt, the World Bank said that low- and middle-income countries had paid $443.5 billion toward principal and interest in 2022. That is the highest level in history and a 5 percent increase from 2021. The organization projected that total would rise by nearly 40 percent in 2023 and 2024. The bank estimated that more than half of the world’s low-income countries were facing debt distress and called for their obligations to be restructured to avoid a “lost decade.”“Record debt levels and high interest rates have set many countries on a path to crisis,” said Indermit Gill, the World Bank Group’s chief economist.The World Bank pointed to the variable interest rates on the debt that many developing countries owe and are struggling to repay as a looming threat to their solvency. The bank also noted that the stronger U.S. dollar, which has made those countries’ currencies worth less on global markets, has been making repayment more costly.Governments have defaulted on their debts 18 times in the last three years, including in places like Zambia, Sri Lanka and Lebanon. That surpasses the total number of defaults that were recorded in the previous two decades, underscoring how unsustainable debt burdens have become.The predicament has also made it more difficult for developing countries to attract new investment and financing. According to the World Bank, new loan commitments to developing countries declined by 23 percent last year to $371 billion. It was the first time since 2015 that private creditors had received more money than they invested in developing countries.The mounting debt burdens have put additional pressure on multilateral development institutions such as the World Bank to provide low-cost loans to poor countries. International coalitions such as the Group of 20 have also been pushing to accelerate debt relief, but those efforts have been moving slowly.China, the world’s largest creditor, has faced criticism for being an obstacle to debt restructuring agreements because of its reluctance to assume losses on its loans. Earlier this year, China reached an agreement in principle with Zambia to restructure $4 billion in debt, but the deal has not been finalized amid lingering objections about concessions from some of its creditors.Sri Lanka, which declared bankruptcy last year, is also working on a restructuring package with creditors including China, Japan and India.With rich countries facing their own high debt burdens and global economic growth remaining sluggish, relief for developing economies could continue to be elusive.Treasury Secretary Janet L. Yellen said at a Wall Street Journal CEO Council event on Wednesday that debt relief was one of the most important issues that the U.S. and China needed to work together to address, and that it was a regular subject of discussion with her Chinese counterparts.“A lot of countries around the world are really suffering, especially with high interest rates from unsustainable debt burdens,” Ms. Yellen said. “They need to restructure their debt and we need to cooperate to do it.” More

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Speaking at a preparatory meeting of sherpas ahead of the November G20 meeting that Brazil will host, Lula said: “We must seriously debate the anachronism of global governance, which no longer is representative.”He called for reform of multilateral financial institutions so debtor nations are better represented and suggested looking at international taxation mechanisms to help finance development. More

About 130 workers affiliated with IF Metall began a strike on Oct. 27, sparking sympathy strikes – a solidarity tactic by unaffected workers – from dockworkers, cleaners and car dealerships.Sympathy strikes are generally legal in the Nordic countries, in a stark contrast to the United States where such actions are largely prohibited.In the 1990s, American toy company Toys “R” Us signed a collective agreement with its 130 Swedish employees after a three-month strike that was also accompanied by sympathy strikes and blockades.Here is an overview of sympathy actions that are adding pressure to Tesla by potentially disrupting its supply chain in Sweden, where Tesla’s Model Y is the most sold new car so far this year:SWEDENSweden’s transport workers’ union pledged in November to block loading and unloading of Tesla cars across the country’s ports. A dockworkers’ union also said it would not handle Tesla cars in Swedish harbours from Nov. 17.Seko, which represents service and communications workers, on Nov. 20 started a blockade of delivery and collection of mail and parcels at Tesla’s Swedish workplaces by logistics firms PostNord and CityMail, cutting the electric vehicle maker’s access to licence plates from the country’s transport authority. The union of civil servants said its members at PostNord, owned by the Swedish and Danish states, would pause deliveries to Tesla from Nov. 21.The electricians’ union vowed in November to block electrical repair works at Tesla facilities and charging stations, and a painters’ union warned it planned to stop painting Tesla cars.The building maintenance workers’ union halted all work related to the automaker from Nov. 17, while a building workers’ union pledged to halt maintenance and construction work at Tesla service workshops. The transport workers’ union said on Dec. 13 it would stop collecting waste at Tesla’s workshops in Sweden as of Dec. 24. Unionised workers at Hydro Extrusions, a subsidiary of Norwegian aluminium and energy company Hydro, stopped work on Tesla car products from Nov. 24. The workers are members of IF Metall.Sweden’s musicians’ union said on Nov. 14 it would block some music from Tesla cars’ media systems.Some Swedish pension funds have urged Tesla to sign the agreement with the union, but so far held off selling shares. NORWAY Norway’s largest private sector labour union said on Dec. 6 it would start blocking transit shipments of Tesla cars meant for the Swedish market from Dec. 20 unless the automaker reaches an agreement with IF Metall.The union said it intended to send a “clear signal to Tesla” and do what was necessary to ensure that any vehicle shipments via Norway to Sweden were blocked, but declined to say exactly what measures it might take.DENMARK Danish dockworkers’ union said on Dec. 5 it would not unload or transport cars made by Tesla for Swedish customers.PensionDanmark, one of Denmark’s largest pension funds, said on Dec. 6 it had decided to sell its holdings in Tesla over the automaker’s refusal to enter into agreements with labour unions.FINLANDFinnish transport workers’ union said on Dec. 7 its dockers would not load Tesla vehicles and components destined to Sweden in all Finnish ports from Dec. 20. More

The sanctions target eight individuals who perpetuate Hamas’s agenda by representing the group’s interests abroad and managing its finances, the Treasury said in a statement. “Hamas continues to rely heavily on networks of well-placed officials and affiliates, exploiting seemingly permissive jurisdictions to direct fundraising campaigns for the group’s benefit and funneling those illicit proceeds to support its military activities in Gaza,” said Brian Nelson, under secretary of the Treasury for Terrorism and Financial Intelligence.Several of the Hamas officials targeted were based in Turkey, including one of the group’s key financial operatives there, Haroun Mansour Yaqoub Nasser Al-Din, the Treasury said.Haround Nasser Al-Din has been involved in a network that transferred money from Turkey and Gaza to the Hamas command center in the West Bank city of Hebron, it said, and helped subsidize Hamas activities to further unrest in the West Bank.Nelson traveled to Oman and Turkey at the end of November to work on U.S. efforts to deny Hamas and other groups the ability to raise and move funds.The United States and Britain earlier imposed three rounds of sanctions on the Palestinian militant group after its deadly incursion into Israel on Oct. 7. More