Economy

LONDON (Reuters) – British finance minister Jeremy Hunt will announce on Wednesday how he will try to speed up the world’s sixth-biggest economy after the shocks of Brexit, a heavy COVID-19 hit and double-digit inflation have left it lagging behind its peers.Hunt – who is due to make a budget speech to parliament at around 1230 GMT – has dismissed calls from other lawmakers in the ruling Conservative Party for big tax cuts now to boost their fortunes before an election expected in 2024.Rushed into the Treasury late last year to undo former Prime Minister Liz Truss’s unfunded tax cut plans, he says the leap in borrowing costs after her “mini-budget” made clear the limits of relying on the bond market to fund future growth.Instead, hemmed in by his promise to lower the burden of Britain’s 2.5 trillion pounds ($3.0 trillion) of debt, Hunt will seek to tackle some of the causes of Britain’s long-term economic funk.”In the autumn we took difficult decisions to deliver stability and sound money,” Hunt is due to say, according to excerpts of his budget speech. “Today, we deliver the next part of our plan: a budget for growth,” he adds.Britain is the only Group of Seven country where output remains below its pre-pandemic size, putting pressure on Hunt and Prime Minister Rishi Sunak with the opposition Labour Party far ahead in opinion polls.Labour’s would-be finance minister, Rachel Reeves, sought to keep the heat on Hunt by calling for urgent action now.”With 13 years of economic mismanagement and sticking-plaster politics leaving us lagging behind, what we need to see is some real ambition from the government,” Reeves said. Having ruled out a major spending spree or big tax cuts, Hunt will address the acute shortage of candidates for jobs by changing childcare and welfare rules, something he says will help get hundreds of thousands of people back into work.The Guardian newspaper said Hunt would announce a 4 billion-pound childcare expansion for one and two year-olds in England.He is also expected to announce measures to improve skills training and give a green light to 12 investment zones.Last week, Labour attacked the government’s “chaotic” approach to business taxation with the corporation tax rate due to jump from 19% to 25% next month.In an attempt to soften that tax hit, Hunt has hinted at new incentives for business investment.He is also under pressure from nurses, teachers and other public sector employees who striking for higher pay, while the armed forces say they need more money to support Ukraine in its war with Russia.MORE HELP ON ENERGY In the short term, households struggling with high inflation and tax hikes that Hunt announced in November can expect a three-month extension of energy bill subsidies. Hunt is also expected to extend a decade-long fuel duty freeze.The Treasury said the budget would offer more cost of living help to businesses too.But many economists think Hunt will use only about half of a recent 30 billion-pound windfall in the public finances, reserving some firepower for closer to the next election.At just under 100% of gross domestic product, British government debt is slightly above the euro zone average but well below that of the G7 which includes Japan where the ratio stands at more than 200%. Hunt’s future options could be further constrained if Britain’s fiscal watchdog turns gloomier about the economic outlook.Britain is expected to suffer a recession less severe than the Office for Budget Responsibility’s (OBR) forecast of a 1.4% slump in 2023 made in its November forecasts. But projections for growth after that could be lowered, reducing tax revenues. Bond dealers polled by Reuters expect government borrowing to fall to 125 billion pounds in the 2023/24 financial year – down from the 140 billion pounds or 5.5% of GDP which the OBR forecast in November.($1 = 0.8222 pounds) More

Philippine call centres and other outsourcing companies beat revenue and hiring targets last year and expect more growth in 2023, as global businesses continue to seek ways to cut costs.In the economically vital business process outsourcing (BPO) industry, which provides support services to companies from Amazon to Zoom, revenues increased 10.3 per cent to $32.5bn and staff count rose 8.4 per cent to 1.57mn, according to the IT and Business Process Association of the Philippines (IBPAP).The financial services, healthcare, retail, technology and telecommunications industries had driven growth, it added. The trade association had forecast 8 to 10 per cent revenue expansion and headcount growth of 7 to 8 per cent.This year, IBPAP said, the industry’s workforce could reach 1.7mn and revenue could hit $35.9bn, growth of 8.3 per cent and 10.5 per cent, respectively.The group said its industry survey found that 83 per cent of outsourcing companies expected to post growth in 2023 “despite a potential global recession”, while 17 per cent were “neutral with their forecasts”.The survey also showed that organisations would continue to outsource and use global business services to cut costs, IBPAP said.The better than expected performance in 2022 is the latest good news for the sector. In September, the government allowed BPO companies with work-from-home arrangements to retain tax incentives. Many outsourcing companies previously operated under an investment regime that required staff to work on-site to enjoy tax perks, and the hybrid work set-up was initially a temporary measure taken in response to the coronavirus pandemic.Amid intense lobbying for hybrid work to be made permanent, IBPAP has pledged to generate 2.5mn jobs and $59bn in annual revenues by 2028, the end of Philippine president Ferdinand Marcos Jr’s six-year term.The lofty targets come as the country’s call centre industry faces a number of challenges, such as automation, difficulty in hiring qualified workers and rising competition from other outsourcing destinations such as India, Poland and South America.“We still have a long way to go, but [the] Philippine [industry’s] stellar performance in 2022 brings us closer to generating 1.1mn new jobs for Filipinos,” said IBPAP president and chief executive Jack Madrid.“It’s also a testament to the collective efforts that the private sector, government and academe have exerted to retain the industry as an indispensable pillar of the economy,” he said.A version of this article was first published by Nikkei Asia. ©2023 Nikkei Inc. All rights reserved.Related storiesPhilippines, Malaysia emerge as start-up hotspots, says investorThailand, US resume Cobra Gold military exercise at full scalePhilippines ratifies RCEP trade deal after shift by Marcos More

BNDES did not specify the exact figure. According to Brazil’s government statistics agency, the country’s 2022 GDP amounted to 9.9 trillion reais ($1.88 trillion).Speaking at a news conference, BNDES planning executive Nelson Barbosa also said there is more credit supply to the bank coming from abroad and that this could unlock more credit for South America’s largest nation.Barbosa added that this credit could be used to financing sustainable projects. The comments follow the bank’s 2022 earnings, in which it said it reported 46% jump year-on-year in its annual recurring net profit, reaching 12.5 billion reais.    The bank posted a net profit of 41.7 billion reais, boosted by factors such as dividend income from state-run oil company Petrobras’, among others.($1 = 5.2534 reais) More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.A sense of calm returned to markets on Tuesday as investors rediscovered some of the risk appetite that got mauled the previous day, offering a springboard for a positive open in Asia on Wednesday.It lacked full conviction though – oil prices skidded to the lowest this year, bank stocks and bond yields only partially retraced Monday’s slump, and traders are still betting the Fed will cut interest rates by 50 basis points later this year.Concern surrounding the U.S. banking system and whether regulators’ emergency measures last weekend prevent contagion from spreading after Silicon Valley Bank’s collapse last week will not disappear overnight, especially following the release of sticky core U.S. inflation data.In that light, Fed Governor Michelle Bowman’s speech ‘Modernizing the U.S. Banking System’ late in the U.S. day on Tuesday may garner more attention than usual.Investors in Asia have a fairly packed data calendar themselves to get through on Wednesday, with the latest snapshots of Chinese retail sales, industrial production and fixed business investment the pick of the bunch. China retail sales, https://fingfx.thomsonreuters.com/gfx/mkt/lbpggjrlbpq/Chinaretailsales.png China fixed asset investment, https://fingfx.thomsonreuters.com/gfx/mkt/lgpdkjmoovo/Chinafixedasset.png Economists expect retail sales and industrial production to recover strongly, pointing to the economic recovery from COVID-19 lockdown gathering momentum.Yet growth in fixed business investment, a key plank of any recovery, is expected to slow from January. So it’s a mixed bag, and the burden of proof on China bulls may be higher given how surprisingly weak February’s inflation figures were last week.Note, however, that the retail sales and industrial production figures are for January and February, so they may be distorted. Analysts at ING expect the numbers overall to point to a “stable recovery”, meaning the central bank should leave interest rates unchanged on Friday.The Indian rupee and Indonesian rupiah may be sensitive to Indian and Indonesian trade figures for February – Reuters polls suggest India’s deficit will widen slightly to $19 billion, and a sharp increase in imports will narrow Indonesia’s surplus to $3.3 billion.Here are three key developments that could provide more direction to markets on Wednesday:- China retail sales, industrial production, fixed investment (February)- India trade (February)- Indonesia trade (February) (By Jamie McGeever; editing by Josie Kao) More

Good morning. The story around Silicon Valley Bank continues to evolve as the world’s largest private investment firms explore buying loans from the remains of the failed bank. Premium subscribers can sign up for our Due Diligence newsletter for a deeper dive on the failed bank and the resulting fallout.Below, we have details on OpenAI’s new model, which has shown “human-level performance” on the US bar exam, advanced placement tests and the SAT school exams.PS For a deeper dive on the SVB and the resulting fallout, premium subscribers can sign up for our Due Diligence newsletter. Here’s what else to keep tabs on today:China economic figures: February industrial output and retail sales figures are set to be released today.UK Budget day: Power, or rather the cost of it, will be a key focus for the UK chancellor Jeremy Hunt’s Budget day speech today. Earnings: Foxconn is set to report fourth-quarter earnings today and expand on its first-quarter outlook after a fall in February sales. (Reuters)Today’s top news1. Five of the world’s largest private investment firms are among the buyout groups examining SVB’s $74bn loan book for pieces that might fit into their credit portfolios, according to people familiar with the matter. The interest from Blackstone Group, Apollo Global Management, KKR, Ares Management and Carlyle Group comes as the firms crowd into lending businesses traditionally dominated by banks.Markets news: US stocks climbed and bonds retreated on Tuesday as regional bank shares rebounded.Race to restore confidence: Regulators worked through the weekend to prevent contagion spreading through the US banking system following SVB’s collapse. Read how agreement was reached.2. US prosecutors are investigating the collapse of Silicon Valley Bank after a dramatic outflow of customer deposits from the Californian tech lender, according to a person familiar with the matter. The Securities and Exchange Commission has also launched an investigation into the lender’s collapse, according to media reports. Here’s what we know about the investigations.3. A Russian aircraft has struck an unmanned US drone over the Black Sea, American officials have claimed, in an incident they described as a “reckless” action by Vladimir Putin’s military. While it is “not uncommon” for foreign actors to fly close to US aircraft over the Black Sea, according to the White House National Security Council spokesperson, the incident was uniquely “unsafe” and “unprofessional”.4. Brussels is exploring new controls to limit China from acquiring high-tech, following similar US moves. The EU trade commissioner told the Financial Times that new restrictions were needed to prevent companies circumventing export bans on sensitive technology by manufacturing it elsewhere. Read the full story.Related read: Siemens is scouting for investments in south-east Asia to diversify away from China.5. OpenAI has released GPT-4, its latest artificial intelligence model that it claims exhibits “human-level performance” on several academic and professional benchmarks such as the US bar exam, advanced placement tests and the SAT school exams. Its new software will be used in a variety of apps ranging from Duolingo to Morgan Stanley Wealth Management.News In-depth

While the Aukus defence pact negotiations centred on how to share some of America’s most guarded military technologies, the political pay-off has come in a deal that will create tens of thousands of jobs over decades of work. The industrial bonanza comes as good news, but the deal is still fraught with potential delays and risk.We’re also reading . . . Fail: The failure of SVB shows there are holes in the US regulatory dike. That is no accident. It is what lobbyists called for, writes Martin Wolf.Peacemaker: Xi Jinping’s ability to convince Tehran and Riyadh to restart diplomatic relations was a shift that caught many by surprise; it bolsters expectations of what Beijing can deliver.Wirecard: A hard-partying Englishman alleged to be central to the Wirecard fraud is about to be forced into the limelight by a criminal case in Singapore.Graphic of the dayAs China seeks to exert more control over the infrastructure transmitting the world’s data, Beijing has imposed strict permit requirements for access to underwater data infrastructure. Several industry sources said China’s policing of its waters — including within maritime areas marked on maps by a disputed “nine-dash line” seen below — is a response to fears that companies could use cables as a front for espionage.

Take a break from the newsDon’t miss our guide to the best Indian restaurants in Hong Kong. Ravi Mattu highlights the city’s top spots, from south Indian thali to fine Punjabi cuisine via a tandoor-focused menu.

A selection of dishes at Bombay Dreams . . . the ‘grande dame of fine Indian dining in Hong Kong’ © Michael Perini

Additional contributions by Gordon Smith and Tee Zhuo More

Shares of the company rose 3.5% to $104.3 after the bell. Home demand shot up across the United States when pandemic-era remote work trends allowed people to look for more affordable properties away from big cities, boosting the margins of homebuilders such as Lennar and D.R. Horton Inc.However, the industry is now staring at a slowdown as high interest rates have made borrowing more difficult for potential buyers. Last month, data showed that the average interest rate on the most popular U.S. home loan rose to its highest since November on concerns that the Federal Reserve might have to continue tightening policy through the summer to subdue inflation. “Our sales volume and pricing have clearly been impacted by rising interest rates, but there remains a significant national shortage of housing, especially workforce housing, and there is still demand,” Lennar Executive Chairman Stuart Miller said in a statement. The company’s new orders fell 10% to 14,194 homes in the first quarter. Lennar reported net earnings per diluted share, excluding items, of $2.12 per share, above analysts’ average estimate of $1.55 per share, according to Refinitiv data.Revenues rose 5% to $6.49 billion, compared with estimates of $5.93 billion. More

It would be the tech company’s second round of cuts since November. Mark Zuckerberg, its chief executive, has declared 2023 the “year of efficiency.”Meta, the owner of Facebook and Instagram, said on Tuesday that it planned to lay off about 10,000 employees, or roughly 13 percent of its work force, the latest move to hew to what the company’s founder, Mark Zuckerberg, has called a “year of efficiency.”The layoffs will affect Meta’s recruiting team this week, with a restructuring of its tech and business groups to come in April and May, Mr. Zuckerberg said in a memo posted on the company’s website. The announcement is the company’s second round of cuts within the past half year. In November, Meta laid off more than 11,000 people, or about 13 percent of its work force at the time.Meta also plans to close about 5,000 job postings that have yet to be filled, Mr. Zuckerberg said in the memo. Other restructuring efforts include a plan to wrap up this summer an analysis of Meta’s hybrid return-to-office model, which it began testing last March.“This will be tough and there’s no way around that,” he wrote.Meta’s stock rose more than 7 percent by the close of trading on Tuesday.Mr. Zuckerberg is culling employees after years of hiring at a breakneck pace. His company gobbled up workers as its family of apps, which also includes WhatsApp, became popular worldwide. The coronavirus pandemic also supercharged the use of mobile apps, leading to more growth. At its peak last year, Meta had 87,000 full-time employees.But as the global economy soured, and digital advertising markets contracted last year, Mr. Zuckerberg began putting an end to unchecked growth. Meta trimmed employee perks. And after the layoffs in November, which largely affected the business divisions and recruiting teams, Mr. Zuckerberg hinted at further cuts.On an earnings call in February, the chief executive said he did not want the company to be overstuffed with a layer of middle management, or “managers managing managers.” He said he took responsibility for last year’s layoffs, blaming his zeal for staffing up on the surge of use early in the pandemic.Meta’s layoffs are part of a wave of job cuts from the biggest tech companies. In recent months, Amazon, Google, Microsoft, Salesforce and others have also said they are trimming their ranks, and some of the companies have increased the number of people they are letting go after initial announcements. Many of the companies have cited a challenging global economic environment for their actions.But even beyond the macroeconomic conditions, Meta is dealing with many challenges. It is grappling not only with a digital advertising slowdown but also with Apple’s privacy changes to its mobile operating system, which have restricted Meta’s ability to collect data on iPhone users to help target ads. It also faces steep competition from TikTok, which has soared in popularity over the past few years. And regulators have stepped up efforts to rein in the company by pushing for new laws that would limit Meta’s data collection abilities.Meta is also in the midst of a tricky transition to become a “metaverse” company, connecting people to an immersive digital world through virtual-reality headsets and applications. Mr. Zuckerberg sees the metaverse as the next-generation computing platform, so Meta has been spending billions of dollars on the effort and reallocating workers to its Reality Labs division, which is focused on products for the metaverse.Yet it’s unclear if people will want to use metaverse products. In recent months, the public has instead gravitated to chatbots, which are built on artificial intelligence. Meta has invested in A.I. for years but lately has not been at the center of the conversation about the technology.Employees have been bracing for more layoffs for months, watching with anxiety as Mr. Zuckerberg embarked on a quest to dial back what he felt was no longer necessary to run the company, according to current and former employees. But the expectation was that he would take a light touch to his favored project of the metaverse.Some Meta employees who were affected by Tuesday’s announcement of layoffs — especially in the recruiting division — felt “gut-punched,” according to current and former employees who have spoken with those in the organization.“People are entering a job market that is the worst I’ve ever seen,” said Erin Sumner, a global director of human resources at DeleteMe, who was laid off from Facebook in November. She said the staggered nature of Meta’s cuts over the next two months was adding to employee anxiety.“There’s a lot of uncertainty,” Ms. Sumner said. “There’s a lot of anger, and there’s the question many folks are asking: ‘How do you expect me to do work for the next two months while wondering if I will still have a job?’”In his announcement on Tuesday, Mr. Zuckerberg laid out a vision for streamlining the company by removing layers of management, ending lower-priority projects and rebalancing product teams with a focus on engineering.To that end, Mr. Zuckerberg wound down efforts on building NFTs, or nonfungible tokens, a cryptocurrency-based initiative that has dropped out of favor in recent months. Many of Mr. Zuckerberg’s crypto initiatives in general have fallen by the wayside over the past nine months as the public has grown more skeptical of the market after the implosion of FTX, the cryptocurrency exchange.In his note, Mr. Zuckerberg added that the moves were a response to global conditions, including increased regulation, geopolitical instability, higher interest rates and a cooling economy.“The world economy changed, competitive pressures grew and our growth slowed considerably,” he said. “We should prepare ourselves for the possibility that this new economic reality will continue for many years.”Gregory Schmidt More

Argentina’s annual inflation rate has hit a three-decade high, surging past 100 per cent for the first time since 1991 in a sign of how the country’s government has failed to tame price pressures that have torn across the economy.Prices rose by 6.6 per cent in February, bringing the 12-month figure to 102.5 per cent, according to Indec, the government statistics agency. That was the quickest pace since Argentina was emerging from a hyperinflation crisis in the early 1990s, and places its inflation rate among the highest in the world.Tuesday’s data comes at a complex moment for the centre-left administration of President Alberto Fernández, which had hoped to ease financial pressure on voters ahead of a tough election challenge in October. Polls have consistently shown that inflation is a primary concern among Argentines, followed by corruption and poverty.Soaring prices have largely been attributed to a bout of central bank money-printing, as well as Russia’s war in Ukraine. The amount of money in public circulation has quadrupled during Fernández’s first three years in office, according to central bank data.Following the latest figures, Argentina now has one of the highest rates of inflation globally. It is behind only Zimbabwe, Lebanon, Venezuela and Syria, all of which reported triple-digit inflation last year.Economists had widely expected inflation to remain stubbornly high throughout 2023 and are sceptical of the effectiveness of government measures to tame it.A state price control scheme known as Precios Justos, or “Fair Prices”, has temporarily frozen the cost of more than 1,700 goods until December. But that has not been enough to cool price rises given the serious imbalances in the Argentine economy. Similar price controls introduced in 2021 were not enough to halt soaring prices, and consumer sentiment has continued to deteriorate.

Earlier this week the IMF called on Argentina to make stronger efforts to address inflation in order to keep its $44bn programme with the Washington-based lender on track.The IMF warned of “policy setbacks” in the South American country amid a severe drought that has destroyed crops and hurt agricultural exports — an important source of government revenue. Net foreign currency reserves hovered at about $4.2bn in February, according to private analysts.Buenos Aires has been lobbying to lower the bar on several targets agreed with the IMF last year, asking for the executive board to be more lenient given the war in Ukraine and extreme weather conditions.Argentina is due to receive about $5.3bn from the IMF this month, pending approval by the lender’s executive board. More