Economy

BUENOS AIRES (Reuters) – Hard-up Argentines, tightening their purse strings with inflation at 140% and rising, are increasingly turning to second-hand clothing markets, both to find affordable bargains and to raise extra cash from selling old garments.The South American nation, the region’s no. 2 economy and a major grains exporter, is facing its worst crisis in decades. Two-fifths of people live in poverty and a looming recession is shaking up Argentina’s presidential election run-off next Sunday.Rising voter anger is propelling a radical outsider, Javier Milei, the slight favorite in polls to beat economy minister Sergio Massa, the candidate of the ruling Peronist coalition, whose bid has been hobbled by his failure to rein in rising prices.”You can’t just go to the mall and buy something you like as you did before. Today prices are unthinkable,” said 22-year-old student Aylen Chiclana in Buenos Aires.New jeans cost more than double the price a year ago and that purchase alone represents over one-third of Argentina’s monthly minimum wage. Annualized inflation, already 138%, is set to rise further when authorities release official data for October on Monday, with the monthly rise alone estimated to be around 10%, down slightly from peaks in August and September.Argentina has for years battled high inflation, which economists blame on money printing and an entrenched lack of confidence in the local peso. Inflation has accelerated over the last year to its highest since 1991.Beatriz Lauricio, a 62-year-old semi-retired teacher, said that she and her husband, a bus company employee, go on weekends to a clothing fair to sell old garments to make ends meet.”We’re middle class, lower middle class I would say. We have our jobs but we need to come to the fair,” she said, adding that when it was canceled one weekend due to bad weather the couple’s finances “collapsed”.”We’re not doing this as a little extra so we can go on vacation to Brazil, we do it out of daily necessity,” Lauricio said.María Silvina Perasso, the organizer of the clothing fair in Tigre, on the outskirts of Buenos Aires, said many people shop there because prices have risen far faster than salaries. Local monthly minimum wage is 132,000 pesos, $377 at the official exchange rate but half that at real street rates due to capital controls – restrictions on foreign exchange transactions. “With the economy the way it is, they buy clothes at 5% or 10% of the value that comes from a store and they can buy things for their families,” she said.María Teresa Ortiz, a 68-year-old retiree, lives off her pension and from casual sewing work, where she earns 400 pesos an hour, officially about a dollar. She goes to the fair to be able to afford clothes she otherwise couldn’t buy.”We simply can’t buy new things. You can’t buy new sneakers, you can’t buy new flip-flops, you can’t buy new jeans, you can’t buy a shirt or a T-shirt either. So you have to look for them at the fairs,” she said.($1 = 349.9500 Argentine pesos) More

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The forecast arrives at a time when geopolitical tensions, particularly the escalating conflict in Israel, pose risks to global oil prices. An increase in oil prices could have negative repercussions for India by inflating import bills, widening fiscal deficits, and exacerbating trade balance issues.In a vote of confidence for the Indian economy, both Moody’s (NYSE:MCO) Investor Services and the International Monetary Fund (IMF) have projected positive growth for the country in 2023. This optimistic outlook is bolstered by stronger-than-expected domestic demand and first-quarter consumption figures. The Reserve Bank of India (RBI) shares a similar growth estimate for FY24.Morgan Stanley anticipates a decline in inflation from 5.4% in FY2024 to 4.9% in FY2025 and expects the current account deficit to remain steady. The inclusion of India in the Global Bond Index-Emerging Markets (GBI-EM) starting June 2024 is anticipated to improve the balance of payments scenario. Similarly, JPMorgan Chase & Co. (NYSE:JPM)’s decision to add Indian government bonds to its emerging market index from June 2024 is likely to attract additional foreign investment inflows.The bank also highlighted that the general elections scheduled for May 2024 could impact economic growth and macroeconomic stability. In response to a sustained moderation in inflation, Morgan Stanley predicts that the RBI will implement two rate cuts of 25 basis points each by mid-2024. These adjustments would support private consumption growth and encourage private capital expenditure (Capex), which are both expected to gain momentum.The RBI has maintained the repo rate at 6.5% since February, signaling stability in monetary policy. Export trends are also expected to stabilize, contributing positively to growth without becoming a drag on the economy.Morgan Stanley emphasizes that maintaining a ‘goldilocks’ environment—neither too hot nor too cold—is crucial for India’s continued economic expansion. The firm underlines the importance of RBI vigilance in liquidity management and keeping real policy rates positive to foster a favorable domestic economic climate. Moreover, business confidence is deemed essential for invigorating the Capex cycle and sustaining economic development.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The DFS scheme, which commenced in November and is slated to conclude by March 31, involves a series of 12 one-hour tests. During these tests, participants are encouraged to modify their energy usage outside of peak times. This initiative follows the success of the previous cycle, where over 1.6 million entities participated and received a total of £11 million in rewards.To partake in the DFS, users must have a half-hourly reading smart meter and be a customer of one of the participating energy suppliers. Some of the eligible suppliers include British Gas, EDF (EPA:EDF), E.On Next, Octopus Energy, OVO Energy, Scottish Power, and Utilita Energy. The complete list is accessible on the ESO’s website. Retail energy suppliers part of the DFS are likely to reach out to potential participants, and some online or app providers can also facilitate participation by connecting directly to a user’s smart meter data.On Sunday, it was highlighted that there is an incentive of £3 per kilowatt-hour (kWh) for reducing electricity usage during designated peak periods. However, approximately three million homes currently without half-hourly reading smart meters are unable to participate in the scheme. Moreover, an impending issue looms as seven million existing smart meters face obsolescence with the phase-out of 2G and 3G networks.The DFS aims to alleviate pressure on the national grid by incentivizing consumers to shift their electricity use patterns. However, it’s important to note that each household can only participate with one DFS-registered provider at any given time.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The unexpected surplus was largely fueled by a robust tourism season that continued into September, with over $5 billion contributing to a services surplus that totaled $6.25 billion. This influx from tourism has been a boon for Turkey’s economy, which has been grappling with significant inflationary pressures.Despite the good news on the tourism front, Turkey is still facing economic challenges. The persistent weakness of the Turkish lira has led to rising import prices, contributing to rampant inflation and an imbalance in trade. The goods deficit stood at $3.66 billion for September, which, while narrower than August’s figures, underscores the ongoing struggle with imports outpacing exports.In response to these inflationary trends, Turkey’s central bank has taken decisive action by implementing substantial interest rate hikes. These measures have shown some effectiveness, as they helped to stall the decline of the lira and brought a slight relief to inflation rates in October after several months of continuous increases.The central bank’s strategy appears to be yielding some early signs of stabilization for the Turkish economy, with the current account surplus serving as a notable indicator of progress amidst broader fiscal challenges.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The ECB’s current stance appears to be one of caution. While inflation in the euro-area is at a two-year low, it still surpasses the ECB’s target of 2%. This situation is compounded by factors such as the end of government financial aid programs and rising wages. Moreover, energy and food prices continue to be volatile due to geopolitical tensions, fiscal policies, and the impact of the climate crisis.Despite these challenges, the ECB seems to have reached the peak of its rate-hiking cycle after a record period of tightening monetary policy. ECB President Christine Lagarde has set expectations for borrowing costs to stabilize, contrasting with market speculations that suggest a potential rate cut as soon as April. Guindos reinforced this view by stating that holding key ECB rates at their current levels is crucial for controlling inflation.As policymakers look ahead, they are anticipating the release of new regional projections from the European Commission on Wednesday. These forecasts are expected to play a significant role in informing the Governing Council’s risk assessment process and could lead to adjustments in inflation outlooks and policy strategies. The ECB’s updated forecasts set to be unveiled in December will further guide their approach toward ensuring price stability within the euro-zone amidst an environment of economic uncertainty.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The APEC gathering, initially founded to foster Pacific Rim trade unity, has shifted focus in response to China’s assertive policies and the US’s strategic pivot towards more limited economic agreements and increased sanctions on China. This evolution reflects the changing landscape of international relations where economic integration and political tensions intersect.The high-stakes meeting between Biden and Xi, their first since the G20 summit in Bali last year, is set against the backdrop of the upcoming US elections and ongoing global security concerns. With the potential Taiwan crisis looming large on the agenda, both leaders are expected to explore strategic and general issues that shape Sino-American relations. China’s foreign ministry spokeswoman Mao Ning has confirmed their intention to engage in dialogue over these critical topics.While the Biden-Xi meeting is likely to capture the spotlight, other APEC leaders are anticipated to welcome this interaction due to their economies’ deep entwinement with China and a shared desire for stability between the two superpowers. Despite efforts to maintain diplomatic channels with China, the US has taken a firm stance against Russia following its invasion of Ukraine. Russian President Vladimir Putin, who faces an arrest warrant from the International Criminal Court, was pointedly not invited to participate in the San Francisco forum.This APEC Summit carries additional weight as it represents the seventh interaction between Biden and Xi during Biden’s presidency and marks President Xi’s first visit to the US in six years. Although no major breakthroughs on contentious issues like trade and Taiwan are anticipated, plans are in place to discuss re-establishing military communication channels between the two countries. The focus will be on managing disagreements while finding common ground where possible amidst the broader context of economic cooperation within the Pacific Rim.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The revamped program sets an entry threshold of $3.84 million for prospective investors, positioning Hong Kong as a forward-looking hub for wealth management. In addition to embracing cryptocurrency investments, the city is also considering the launch of spot crypto ETFs, pending regulatory clearance.This development reflects Hong Kong’s commitment to not only revitalize its position as a premier financial center but also to integrate emerging financial technologies into its markets. The inclusion of Bitcoin in the investment immigration scheme underscores the city’s recognition of cryptocurrency’s growing role in global finance and wealth accumulation.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More