Economy

Ethiopia’s bilateral creditors, co-chaired by France and China, first met in September 2021 but progress on debt relief has been complicated by a 21-month civil war that began in the northern Tigray region.The bilateral creditor discussions, held under the G20’s Common Framework debt restructuring process, were “stellar” but the newness of the process had contributed to delays, Brook Taye, a senior adviser at Ethiopia’s ministry of finance, said at a virtual event hosted by the African Development Bank. More

The top court also denied Najib’s request for a stay of sentence. This was Najib’s final appeal. More

LONDON/LUANDA (Reuters) -Angolans will vote on Wednesday for a new president and parliament in what looks set to be the closest election in Africa’s second-biggest oil producer since the country won independence from Portugal in 1975.WHO ARE THE MAIN PLAYERS?President João Lourenço of the governing MPLA, who has made reforming the corruption-plagued southern African country his priority since taking office in 2017, faces Adalberto Costa Júnior of the rebel-turned-opposition group, the National Union for the Total Independence of Angola (UNITA).A May Afrobarometer poll gave the ruling MPLA, which has governed Angola since independence, a lead of 7% over UNITA. Analysts expect it to win despite growing support for the opposition.WHAT IS AT STAKE FOR INVESTORS?Angola is one of Africa’s largest economies. It is the continent’s second-largest oil producer after Nigeria, according to OPEC, while Kimberley Process data ranks it as the world’s seventh-biggest producer of rough diamonds.Long dominated by state-owned companies, a legacy of its socialist past, Angola has embarked on ambitious privatisation programmes but progress has been slow. Authorities expect the restructuring of state oil company Sonangol and diamond miner Endiama ahead of partial IPOs to take a further 12 to 18 months.Lourenço has also opened anti-corruption probes against the previous MPLA administration.After five years of recession, Angola’s GDP increased 0.7% in 2021, according to the World Bank, and the finance ministry expects growth of 2.7% for this year. Inflation is falling, but remains above 20%.A return to growth linked to higher oil prices has, as usual, not benefited most Angolans, around half of whom live in poverty, according to the Angola Multidimensional Poverty Index. Such desperation could easily spill over into violence during the elections, said Risk Advisory Group’s Laura Seara Cabeça.WHAT ARE MARKETS WATCHING OUT FOR?Investors in the country’s $9 billion worth of outstanding Eurobonds are pricing in a win and a majority of the 220 parliamentary seats for the MPLA, which would mean the continuation of Lourenço’s market-friendly policies.Angola’s Eurobonds currently yield above 10%, Tradeweb data show, the level at which a country is often considered to be locked out from issuing new debt.The country’s debt burden soared to a record high of 131% of gross domestic product (GDP) in 2020 and then fell to 75% last year, helped by higher oil prices.A JPMorgan (NYSE:JPM) index of Angola’s bonds is down 9.3% in the last six months, compared with a 12.5% fall for the continent as a whole.WHAT IS THE DIFFERENCE BETWEEN MPLA AND UNITA’s POLICIES?Not much. Both have presented similar proposals aimed at diversifying the economy and tax base away from oil, and encouraging investment in sectors such as renewable energy, fisheries and tourism, according to Fernandes Wanda, an economist at University Agostinho Neto in Luanda.But Jon Schubert, a political anthropologist at the University of Basel, said he thought the ruling MPLA had yet to demonstrate the political will to end Angola’s continued heavy dependency on oil.Lourenço told a campaign rally on Saturday that the MPLA had lifted the “taboo” against privatisation in a country long dominated by socialist thinking on the economy and he also praised a $3.7 billion deal it reached with the IMF in 2018.”Above all, we gained the international credibility we needed in international markets,” he said.UNITA has promised to end the “concentration of the economy in a single political and social group” – a reference to Angola being one of the world’s most stratified societies, whose elite comprises only those with ruling party connections.But the party has not criticised the government’s broader macroeconomic reforms because it would most likely pursue the same policies, said South Africa-based independent analyst Marisa Lourenço, not a relative of the president.UNITA presidential candidate Costa Junior told Reuters on Sunday he would continue to push for implementation of an agreement between his party, the MPLA and others to maintain economic stability regardless of which party took power.”I have pushed for a stability pact and I will continue to do so indefinitely,” he said.Whoever wins will still face volatility in the price of oil, which accounts for more than half of Angola’s government revenues and 94% of exports, according to the International Monetary Fund, which said any fall in crude prices could quickly trigger debt problems in the country. More

Food insecurity is rising again as relief provided by President Biden’s $1.9 trillion stimulus package wanes.PORTLAND, Ore. — For the better part of last year, the pandemic eased its grip on Oregon’s economy. Awash in federal assistance, including direct checks to individuals and parents, many of the state’s most vulnerable found it easier to afford food, housing and other daily staples.Most of that aid, which was designed to be a temporary bridge, has run out at a particularly bad moment. Oregon, like states across the nation, has seen its economy improve, but prices for everything from eggs to gas to rent have spiked. Demand is growing at food banks like William Temple House in Northwest Portland, where the line for necessities like bread, vegetables and toilet paper stretched two dozen people deep on a recent day.“I’m very worried, like I was in the first month of the pandemic, that we will run out of food,” said Susannah Morgan, who runs the Oregon Food Bank, which helps supply William Temple House and 1,400 other meal assistance sites.In March 2021, President Biden signed into law a $1.9 trillion aid package aimed at helping people stay afloat when the economy was still reeling from the coronavirus. In addition to direct checks, the package included rental assistance and other measures meant to prevent evictions. It ensured free school lunches and offered expanded food assistance through several programs.Those programs helped the U.S. economy recover far more quickly than many economists had expected, but they have run their course as prices soar at the fastest pace in 40 years. The Federal Reserve, in an attempt to tame inflation, is rapidly raising borrowing costs, slowing the economy’s growth and stoking fears of a recession. While the labor market remains remarkably strong, the Fed’s interest rate increases risk slamming the brakes on the economy and pushing millions of people out of work, which would hurt lower-wage workers and risk adding to evictions and food insecurity.Several factors have driven prices higher in the last year, including a shift in spending toward goods like couches and cars and away from services. Supply chain snarls, a buying frenzy in the housing market and an oil price spike surrounding the Russian invasion of Ukraine have also contributed. While gas prices have fallen in recent months, rent continues to rise, and food and other staples remain elevated.Another factor fueling inflation, at least in small part, is the stimulus spending that helped speed the economy’s recovery and keep people out of poverty. More money in people’s bank accounts translated into more consumer spending.While the extent to which the rescue package fed inflation remains a matter of disagreement, almost no one, in Washington or on the front lines of helping vulnerable people across the country, expects another round of federal aid even if the economy tips into a recession. Lawmakers have grown increasingly concerned that more stimulus could exacerbate rising prices.In the meantime, the progress that the Biden administration hailed in fighting poverty last year has faded. The national child poverty rate and the food hardship rate for families with children, which dipped in 2021, have both rebounded to their highest levels since December 2020, according to researchers at Columbia University’s Center on Poverty and Social Policy. Two in five Americans surveyed by the Census Bureau at the end of July said they had difficulty paying a usual household expense in the previous week, the highest rate in two years of the survey.What is happening at the William Temple House is emblematic of the economic situation. Demand for food is swelling again, and officials here blame rising prices and lost federal aid. The people seeking help come from a wide variety of backgrounds: parents, retirees struggling to stretch Social Security benefits, immigrants who speak Mandarin, college graduates with jobs.Inflation F.A.Q.Card 1 of 5Inflation F.A.Q.What is inflation? More

MOSCOW (Reuters) – The Russian rouble firmed slightly on Tuesday after initially easing beyond 60 against the dollar, while shares in leading internet firm Yandex (NASDAQ:YNDX) outperformed the market after the company said it was selling some assets to state-controlled rival VK.At 0810 GMT, the rouble was 0.1% stronger against the dollar at 59.80 after hitting 60.41 as it headed away from a near four-week high of 57.70 it reached on Friday.Against the euro, the rouble gained 0.1% to 59.40 as the European currency dropped to a fresh two-decade trough against the greenback. Alfa Bank said in a note that the rouble was poised to advance as the end-of-month tax period approached.Month-end tax payments usually prompt export-focused companies to convert their foreign currency revenues to meet local liabilities.Year-to-date, the rouble has become the world’s best-performing currency as a result of capital controls that Russia has imposed to mitigate financial stability risks.Rouble volatility has subsided after wild swings that saw it hit a record low of 121.53 to the dollar on the Moscow Exchange in March soon after Moscow sent tens of thousands of troops into Ukraine on Feb. 24. It then rallied to a seven-year peak of 50.01 in June.On the stock market, the dollar-denominated RTS index rose 0.9% to 1,184.6 points. The rouble-based MOEX Russian index was 1% higher at 2,249.7 points.Shares in Yandex jumped 2.3% after it said it had agreed to sell its news aggregator and yandex.ru homepage to state-controlled rival VK, a dramatic move that could further limit Russians’ access to independent media.For Russian equities guide seeFor Russian treasury bonds see More

In an interview with TV Globo’s Jornal Nacional, a nightly newscast with the largest audience in Brazil, the far-right politician insisted without evidence there had been fraud in past Brazilian elections.Bolsonaro did not mention the electronic voting system that he has attacked relentlessly for months, alleging they are open to manipulation. But the former army captain said the military should have a role in deciding the transparency of the vote.Opinion polls show Bolsonaro trailing in the presidential race to leftist rival, former President Luiz Inacio Lula da Silva, who governed from 2003-2010 when Brazil’s economy was booming.Bolsonaro said he had received a country in a bad economic situation compounded by the COVID-19 pandemic and then the Ukraine war and had managed to pull through.Among his achievements, he mentioned the increase of monthly welfare payments for low-income families he said would benefit 20 million Brazilians, a handout that polls show has improved his numbers in recent weeks and narrowed Lula’s advantage.Bolsonaro dismissed reports that deforestation in the Amazon (NASDAQ:AMZN) has surged on his watch because he has dismantled enforcement policies. Instead, he charged that the government’s environmental protection agency Ibama has committed abuses by destroying heavy equipment that is usually seized in the rainforest from illegal gold miners.Bolsonaro added Brazil’s Amazon was the size of Western Europe and the country preserved 66% of its green areas. “Brazil does not deserve to be attacked this way. We will try to improve (Brazil’s image abroad),” he said.Concerns over his failure to stop deforestation has led to resistance in the European Union to ratifying a free trade deal with the South American bloc Mercosur.Bolsonaro said supply problems caused by the Ukraine war have now made the EU want to speed up conclusion of the trade pact. More

Prosecutor Diego Luciani accused Fernandez de Kirchner, a still-influential voice for the left wing of the ruling Peronist party, of defrauding the state and involvement in a scheme to divert public funds while president between 2007 and 2015.The sentence will be known in months, according to local media, although Fernandez de Kirchner could appeal it to higher courts, which would take years to reach a final verdict.”This is probably the biggest corruption maneuver that has ever been known in the country,” Luciani said in arguing for the sentence, which has fueled fresh political tension in the South American country.On Twitter (NYSE:TWTR), Fernandez de Kirchner, who testified in court in 2019, said she was facing a “media-judicial firing squad” and “not a constitutional court.”The former president added that she was not given an opportunity to testify on new elements of the case and would present her defense on social media on Tuesday.Argentina’s President Alberto Fernandez condemned the decision on Twitter, describing the decision in a statement as a case of judicial persecution.”None of the acts attributed to the former president have been proven,” the statement said.The prosecutor also requested a lifetime ban on Fernandez de Kirchner from holding public office.Later on Monday, local police dispersed dozens of protesters in front of Kirchner’s house in the capital of Buenos Aires, with camps both against and in support of the prosecutor’s request, local television showed.The investigation seeks to establish whether she and other officials in her administration favored firms owned by businessman Lazaro Baez in the bidding processes for dozens of public works in the southern region of Patagonia, many of which were overpriced or were not completed.Many experts suspect that the allegedly diverted capital would have returned to the hands of the Kirchner family through their companies. More

BENGALURU (Reuters) – South Korea’s central bank will raise its key interest rate again on Thursday to fight inflation, according to a Reuters poll of economists, but they are divided on how high borrowing costs will be by the year-end.Inflation in South Korea accelerated to an almost 24-year high in July of 6.3% and was expected to continue to rise for a few more months, leaving the Bank of Korea (BOK) with little choice but to remain aggressive. All but one of the 36 economists polled Aug. 16-22 forecast the Bank of Korea will raise its policy rate by 25 basis points to 2.50% at its Aug. 25 meeting. One expected a 50 basis point hike. If the majority view prevails, it would take rates to twice where it was before the pandemic. “With headline inflation accelerating in July and core inflation rising, containing price pressures will remain a top priority, with rate hikes on the cards,” noted Krystal Tan, economist at ANZ. “We maintain that the BOK’s rate hiking cycle will end in 2022.”Although inflation was expected to peak soon, and with stronger growth headwinds, economists were divided on where rates would be by the year-end. Three said the central bank would stop at 2.50%, half of respondents said at 2.75%, 14 said 3.00% and one had a 3.25% forecast. Most economists expected the central bank to then stop, making it one of the first major Asian central banks to end its monetary policy tightening. The Reserve Bank of New Zealand, Reserve Bank of Australia and Reserve Bank of India are not expected to reach their peak rates until 2023. “The BOK was really on the front foot when it came to the need for monetary policy normalisation. So, the fact we are expecting them to slow is really a trend we expect to see from other central banks in our region as well,” said Katrina Ell, senior economist at Moody’s (NYSE:MCO) Analytics. Nearly 90% of respondents, 30 of 34, who answered an additional question expected a 25 basis point hike in October but 53% expected no rise in November. The central bank has raised rates by 175 basis points since August 2021, including by an unprecedented half a percentage point in July. That along with worries of slowing global growth and weak Chinese import demand support the case for slowing the pace of rate hikes. Nearly 80%, 21 of 27 economists expected rates to be 2.75% or lower by end-2023. The median showed a 25 basis point cut in the first quarter of 2024. More