Economy

Alongside the sugarcane and soyabeans that sprout from his fields in the interior of São Paulo state, this year José Odilon De Lima Neto plans on sowing a different crop for the first time.“There may be an investment opportunity in wheat due to complications for summer planting in Ukraine and Russia,” said the farmer based near the city of Ribeirão Preto.International prices for the cereal have surged since Moscow invaded its neighbour, reflecting worries that the warring nations — which together account for about 30 per cent of all wheat trade — will struggle to deliver to the dozens of countries that rely on them for imports.As global food costs across the board touch record levels, according to a UN index, the conflict has compounded what the organisation’s food assistance agency says was already “destructive hunger”.Thousands of miles away, the signals from this nutrition crisis are rippling out in the South American breadbaskets of Brazil and Argentina, major sources of everything from soy and beef to maize and oranges.Many agricultural enterprises in the region are in line for a windfall from higher commodity prices, leading some such as De Lima Neto to expand output or even switch into new areas.But at the same time, elevated costs or looming scarcity of crucial inputs — such as fuel, fertilisers and animal feed — risk dragging on their ability to help guarantee global food security.A fall in production from Ukraine’s sunflower-oil sector — the world’s largest — is expected to help Argentine growers of soy, pictured, which can be used as a substitute  © Eitan Abramovich/AFP/Getty ImagesRussia’s assault on Ukraine began after decisions had been made for the summer planting season in Latin America and Brazil’s second corn crop, making it harder for producers to react immediately, said Vitor Andrioli, an analyst at consultancy StoneX.“A scenario where the conflict persists, and the prices of these commodities are sustained, would probably stimulate an expansion in the cultivation of grains and oilseeds on the continent,” he added.Although Brazil’s largely tropical climates limit wheat cultivation, it has exported more of the grain this year than in the whole of 2021. With advances in crop technology, experts believe the country — a traditional net importer of wheat — has the potential to become self-sufficient and even a net seller in the future.Caio Carvalho, president of the Brazilian Association of Agribusiness (Abag), cautioned that in the short term, however, the wider sector was unlikely to increase overall agricultural output hugely because of doubts over the duration of the war and where to ship to.“Producers cannot go on an adventure and expand supply if they don’t have the security of a market to sell to,” he said. While Brazil has strong sales in China, the Middle East and Russia, many richer economies remain relatively closed to its produce, he added.For now, Latin America’s dominant economy could assist in filling gaps in corn supply. Before the invasion, Ukraine was projected to be the third-largest corn exporter, just ahead of Brazil, according to a recent US Department of Agriculture report.

Similar to soy, it is mostly fed to animals, and Brazil is the third-largest producer behind only the US and China. Brasília’s state agriculture agency Conab estimates outbound corn shipments will increase by three-quarters in 2022.“It is a great opportunity,” said Cesar Ramalho, a grower and president of the industry association Abramilho. “Corn is at a very inviting price for Brazil to increase production”.Farmers in Argentina’s fertile Pampas region are planting more sunflower seeds to take advantage of the disruption. The plants adapt well to parched soil and need less fertiliser, an extra incentive given recent price rises for the chemical nutrients and forecasts for dry weather later this year.But critics of the Buenos Aires administration warn state intervention and high inflation of more than 50 per cent are discouraging further activity in the farming sector.Stricter protectionist measures, such as taxes of up to 33 per cent on exports and price controls on items such as bread, coupled with a chaotic exchange rate regime, could result in farmers waiting for domestic conditions to improve, they argue.“The risk is that the signal to plant more won’t reach them, and that’s bad for everyone, not just Argentina,” said Gustavo Grobocopatel, who heads one of the country’s largest farming groups, Los Grobo. “Argentina should be producing 40 per cent more than it does [in agriculture].”In addition, diesel shortages in Argentina have sparked trucker strikes — along with warnings about possible impacts on the harvest and transportation of crops.Another challenge is that this highly productive corner of the planet is still emerging from a period of severe drought that has damped growth in agricultural output and inflicted financial harm.For Brazil in particular one concern is fertilisers, which became more expensive before the war. The country imports 85 per cent of those chemical nutrients that it consumes, with about one-quarter from Russia.“For the planting season in September, it’s going to depend a lot on the availability of fertilisers. A lack could lead to a drop in productivity,” said Carvalho of Abag. “I’m very worried.”On the other side of the commodities rally buoying arable farmers, meat producers who rely on grains as animal feed are feeling the pinch.Already the world’s largest exporter of beef and chicken, analysts said Brazil could replace any volumes lost because of the war in Ukraine.Yet in certain meat categories, overseas demand is failing to offset higher input costs and weakened purchasing power at home, where poorer consumers are cutting back on the basics amid double-digit inflation.In Brazil’s central-west state of Goiás, pig farmer Euclides Costenaro is at the sharp end of oversupply and falling sales values. Like many of his peers he is downsizing his herd, from 5,000 sows to about 3,800.“Today each producer loses from R$200 to R$350 [$43 to $75] for each hog he resells,” he said. “The damage is very heavy, we have never experienced this before.”There are also difficulties for some livestock ranchers, such as Nabih Amin El Aouar, who has 3,000 head of cattle in the state of Espírito Santo.“Exports have accelerated, but this does not fully compensate for the drop in domestic consumption,” he said.Additional reporting by Carolina Ingizza in São Paulo More

The number of births in advanced economies has largely rebounded to levels before the coronavirus pandemic, a Financial Times analysis shows, a recovery that experts say was partly because of stimulus policies deployed to mitigate the economic impact of the crisis.Births began to fall sharply in late 2020 after Covid-19 took hold and people were confined to their homes in lockdown, worsening an already perilous demographic trend of population decline in wealthy nations. The trend mirrored drops during the 1918 flu pandemic, the Great Depression and the global financial crisis in 2008. But an analysis of national data shows a rapid rebound in most developed countries.“The short-term decline in births observed in many countries is consistent with other historical crises . . . but in the case of Covid-19, these declines have been more shortlived,” the UN said. This is largely because of government spending and efforts to make and distribute Covid vaccines. The economic uncertainty caused by the pandemic was “addressed by the stimulus packages and the expansionary reactions of central banks”, said Klaus Prettner, professor of economics at Vienna University of Economics and Business. The pandemic effect When many countries first imposed lockdowns to counter the pandemic in early 2020, sexual activity declined, according to a survey by French polling company Ifop. Between the end of 2020 and the first half of 2021, nine months after the first lockdowns, countries ranging from China to France reported their lowest number of births on record. Italy had fewer births in 2021 than at any time since the country was created in 1861.

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Fertility rates refer to the average number of babies a woman is projected to have over her lifetime. It is generally accepted by demographers that a country’s population can only grow without net inward migration if couples have at least 2.1 children on average. Many developed economies already have fertility rates well below that. Kate H Choi, director of the Centre for Research on Social Inequality, said people tended to have fewer children when faced with “a long-lasting, catastrophic event resulting in high levels of uncertainty”. Covid-era couples “may not wish to bring a child into this world if they don’t know where their next pay cheque is coming from”, she said.But births began to recover later in 2021 in countries including the US, the Nordics, Australia and Israel — returning to, and in some cases exceeding, the pre-pandemic trend in what demographers said was a catch-up effect.In England ​​and Wales, births decreased by 5 per cent in the first half of 2021 compared with the same period in 2019. By the second half of the year, the number of births had returned to the 2019 level. By the end of 2021, the countries had registered the first annual rise in births since 2015. After experiencing a sharp decline in births, Spain had more births in March and April 2021 than in the same period in 2020. In Germany, there were more births in March 2021 than in any other March in the past 20 years.In the US, the Census Bureau observed that the number of babies born between December 2020 and February 2021 was unusually low, equivalent to 763 fewer births each day in December. “That is very likely the result of the Covid-19 pandemic,” said Anne Morse, a demographer at the Census Bureau. By the second half of 2021, the US recorded the same number of births as the same period in 2019.Population experts and economists credit the monetary and fiscal stimulus launched by many governments in the early months of the pandemic as a crucial factor that helped stave off a longer-lasting decline in births. Karoline Schmid, who heads the fertility and population ageing section at the UN Department of Economic and Social Affairs, said stimulus initiatives played a role in preventing a steep drop in fertility rates by providing a financial buffer against economic uncertainty. “Fertility declines during and immediately after economic crises are caused by couples postponing childbearing due to rising unemployment, increasing job insecurity and reduced household income,” she said. “The monetary stimulus from governments in some countries helped to prevent sharp fertility drops early in the pandemic.”The baby bustThat still leaves the world facing the same demographic time bomb as before the pandemic: declining fertility rates that threaten to slow global growth and leave countries contending with the costs of ageing populations.The global fertility rate peaked at five in 1960 and has since been in freefall. As a result, demographers believe that, after centuries of booming population growth, the world is on the brink of a natural population decline. According to a Lancet paper published in 2020, the world’s population will peak at 9.7bn in about 2064, dropping to 8.7bn around the end of the century. About 23 nations can expect their populations to halve by 2100: Japan’s population will fall from a peak of 128mn in 2017 to less than 53mn; Italy’s from 61mn to 28mn.Low fertility rates set off a chain of economic events. Fewer young people leads to a smaller workforce, hitting tax receipts, pensions and healthcare contributions.“An economy with a labour shortage problem may experience higher labour costs, declining productivity and a lower standard of living,” said Choi.

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Christopher Murray, one of the Lancet report’s authors, said it was hard to overstate the economic and social impact the decline in fertility would have. “We will have to reorganise society,” he said.But the future does not have to be apocalyptic. As well as widely reported benefits to the environment, the decline in fertility could lead governments to invest more in education, according to Prettner. “When fertility rates decrease, governments have more resources to spend in schooling,” he said. “Many of the possible negative economic consequences of declining fertility can be compensated by the associated higher productivity that these children later have within the labour market.”Additional reporting by Valentina Romei in London More

BEIJING (Reuters) – China’s economy slowed in March as consumption, real estate and exports were hit hard, taking the shine off faster-than-expected first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs and the Ukraine war.The biggest near-term challenge for Beijing is the tough new coronavirus rules at a time of heightened geopolitical risks, which have intensified supply and commodity cost pressures, leaving Chinese authorities walking a tight rope as they try to stimulate growth without endangering price stability. Gross domestic product (GDP) expanded by 4.8% in the first quarter from a year earlier, data from the National Bureau of Statistics showed on Monday, beating analysts’ expectations for a 4.4% gain and picking up from 4.0% in the fourth quarter.A surprisingly strong start in the first two months of the year improved the headline figures, with GDP up 1.3% in January-March in quarter-on-quarter terms, compared with expectations for a 0.6% rise and a revised 1.5% gain in the previous quarter.Analysts say April data will likely be worse, with lockdowns in commercial centre Shanghai and elsewhere dragging on, prompting some to warn of rising recession risks.”Further impacts from lockdowns are imminent, not only because there has been a delay in the delivery of daily necessities, but also because they add uncertainty to services and factory operations that have already impacted the labour market,” said Iris Pang, Greater China chief economist at ING.”We may need to revise our GDP forecasts further if fiscal support does not come in time.”China’s shares fell, likely reacting to the March numbers and a weak outlook – the blue chip CSI300 index was down 0.6%, while the Shanghai Composite Index dropped 0.5%.WORSENING RETAIL SALES, JOBLESS RATEData on March activity showed retail sales contracting the most on an annual basis since April 2020 on widespread COVID curbs across the country. They fell 3.5%, worse than expectations for a 1.6% decrease and an increase of 6.7% in January-February. The job market is already showing signs of stress in March, a usually robust month for labour market as factories resume hiring after the Lunar New Year holiday. China’s nationwide survey-based jobless rate stood at 5.8% in March, the highest since May 2020, while that in 31 major cities hit a record 6.0%. The industrial sector held up better with production expanding 5.0% from a year earlier, compared with forecasts for a 4.5% gain. That was down from a 7.5% increase in the first two months of the year.Fixed asset investment, a driver of growth that Beijing is counting on to underpin the economy, increased 9.3% year-on-year in the first quarter, compared with an expected 8.5% increase but down from 12.2% growth in the first two months.Analysts at Capital Economics and Nomura believe the official GDP figures may have understated the slowdown last quarter.Capital Economics says growth in services production index for Q1 does not align with the expansion of the services sector in the GDP data, while Nomura said some of the March data, such as industrial production, are hard to reconcile with many other indicators of industrial activity.Home sales by value in March slumped 26.2% year-on-year, the biggest drop since January-February 2020, according to Reuters calculations, pointing to a deepening downturn in the property market.’HIGHLY COSTLY’ COVID-19 CURBSThe government’s determination to stop the spread of record COVID-19 cases has clogged highways and ports, stranded workers and shut factories – disruptions that are rippling through global supply chains for goods from electric vehicles to iPhones.The contribution from net exports to GDP growth fell to 3.7% in the first quarter from 26.4% in the fourth as momentum ebbed. Fu Linghui, a NBS spokesman, acknowledged the increase in downward economic pressure.”We will step up the implementation of macro policies, make every effort to stabilise the economic fundamentals, and strive to achieve the targets and tasks for the year,” Fu told a news conference. The People’s Bank of China (PBOC) said on Monday it would step up support for industries, firms and people hit by COVID-19 in its latest move to cushion them from the impact of economic slowdown.Late on Friday, the PBOC said it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity, although the reduction missed expectations.Analysts see less room for more China rate cuts, after the smaller-than-expected RRR reduction, which they say reflected the PBOC’s concern about inflation and U.S. monetary tightening.”The government faces a dilemma: how to balance economic growth and containing the outbreaks. Locking down large cities like Shanghai is highly costly,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “Such costs will become more visible in coming months.” More

A vessel docked at a jetty on Louisiana’s coast is claiming its cargo of liquefied natural gas. Ice forms on a pipe as chilled fuel extracted from fields as far away as Texas or Pennsylvania is sent into the tanker’s insulated hold for shipment overseas. Cheniere Energy’s Sabine Pass export terminal is one of seven operating in the US, all of them running flat out to feed a global market desperate for energy. Europe’s goal to cut dependence on Russian natural gas in response to Moscow’s war in Ukraine should be a bonanza for LNG export companies in the US, the world’s largest gas producer. Investors in these specialist companies are bullish, as reflected in a recent all-time high for Cheniere’s stock price. But prospects for more than a dozen new American liquefaction projects remain highly uncertain as construction costs rise, the US gas price soars and climate policymakers pursue a long-term shift away from fossil fuels and their associated emissions. Even the most advanced projects will take years to feed additional supplies to the world. The US began sending out LNG from shale gas six years ago, as new supplies unleashed through fracking prompted Cheniere to build export infrastructure at Sabine Pass, originally designed to handle imports. Total US LNG capacity now stands at 120bn cubic metres (bcm) a year. Three more plants due online by 2025 will bring 70 bcm of new capacity. Another 206 bcm worth of plants have federal regulatory approval but await a final green light from their sponsors. European Commission president Ursula von der Leyen announced a deal with US president Joe Biden last month under which the EU would guarantee long-term demand for another 50 bcm a year of LNG. The volumes would offset some of the 155 bcm of gas the EU imported from Russia last year. “I think everyone felt an enormous uplift over the course of the last three to four weeks,” said Dan Brouillette, a former US energy secretary in the Trump administration and now president of Sempra Infrastructure, which has a majority stake in Louisiana’s Cameron LNG plant. European attitudes to American fossil fuels had undergone a “sea change”, he said. US LNG executives now believe that another wave of new construction may be imminent. “The future for US LNG is off the charts,” said Michael Smith, chief executive of Freeport LNG, which operates an export terminal south of Houston. “Europe recognising that they need LNG as opposed to believing that they could get out of this [energy crisis] with just renewables . . . That’s a big positive step.” Jack Fusco, chief executive of Houston-based Cheniere, said Europe’s decision to include some natural gas in its green taxonomy and its decision to wean itself from Russian energy were “positive” signs of a more “realistic view” of LNG’s role in energy security and the transition to cleaner sources. No one expects all the US’s proposed capacity to be built. LNG plants are costly and take years to pay off. Before deciding to proceed, developers typically must line up purchase agreements with customers lasting two decades or more, covering at least 80 per cent capacity. Analysts are sceptical that the EU’s guarantee or soaring global LNG prices will end up spurring as much demand as project developers hope, given other efforts to diversify away from carbon-based energy. Brussels’ “RePowerEU” energy policy statement, released last month, was directed at breaking the dependence on Russian energy but also talked of “reducing faster the use of fossil fuels” in general. US LNG advocates say their fuel is a less carbon-intensive source of electricity than coal, meaning it could help quickly reduce emissions in some countries. However, methane leaks from gas infrastructure and the full lifecycle carbon intensity of the export plants can undermine this claim.Project developers say they can add carbon capture technology to lower emissions. Freeport has installed electric drives to power its gas liquefaction process. But European utilities’ long-term appetite would still be uncertain, said analysts. “There’s a big customer out there that wants LNG, but you’re not quite sure for how long,” said Nikos Tsafos, an LNG expert at the Center for Strategic and International Studies in Washington, referring to Europe. “If anything, they’re trying to get out of the gas business altogether very quickly.” Supply chain disruptions and tight labour markets can also weigh on new capacity, developers acknowledged. The newest terminal to open, Venture Global’s Calcasieu Pass in Louisiana, came online in just 29 months, but other new projects are moving at a slower pace. Costs are rising as inflation rips through the US economy. “We’re mostly a steel project,” said Smith. “And steel [prices] have doubled in the last two years.” Projects that might have cost $500mn for every million tonnes of LNG capacity may now be closer to $1bn, suggested Smith. US natural gas prices are still a bargain compared with Europe or Asia, but they have recently soared to the highest level since 2008 to surpass $7 a million British thermal units. Strong flows to LNG export terminals are one force behind the jump. LNG supply scarcity meant “a bunch of wealthy developed economies are competing for the same small pool of LNG”, said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis. Poorer Asian countries that the global LNG industry had counted on to drive growth might rethink their LNG import plans, he said.For now, most of the US LNG that could go to Europe is already sailing there, making up about 70 per cent of exports this year. The US is not in a position to immediately replace a sudden interruption of Russian supplies, especially while the EU also tries to replenish its storage for next winter. “I wish I had better news for Europe but it’s going to take . . . at least five-plus years to get anything of size done,” said Fusco.Additional reporting by Amanda Chu in Washington More

SINGAPORE (Reuters) – The yen won a brief reprieve after hitting fresh two-decade lows from Japanese policymaker comments on Monday, even as holidays confined the U.S. dollar to narrow ranges against most other currencies.The yen fell to a two-decade low of 126.795 in early Asian trading, before both Bank of Japan Governor Haruhiko Kuroda and Finance Minister Shunichi Suzuki voiced concerns and caused it to bounce as far as 126.25. But the rally proved short-lived and it was soon back around 126.57.With the Easter holiday in Australia, Hong Kong and other parts of Asia dulling trade in other currencies, the dollar remained strong and supported by a hawkish Federal Reserve while the euro was hamstrung by a lack of clarity on when rates in the euro zone would rise.At Monday’s lows, the yen was nearly 10% weaker than where it was at the beginning of March. It fell nearly 2% against the dollar last week, marking a sixth straight losing week.Win Thin, head of currency strategy at BBH Global Currency Strategy, said the dollar didn’t seem to have significant chart points halting a potential further run-up against the yen until a 2002 high near 135.15.  “We see low risk of FX intervention. Until the BOJ changes its ultra-dovish stance, the monetary policy divergence argues for continued yen weakness and intervention would likely have little lasting impact,” Thin wrote. Japanese policymakers have been vocal about their concerns around the falling yen, particularly after it slipped to the weaker side of 125 per dollar on April 11. While expectations are for the Bank of Japan to acknowledge rising inflationary pressures at the upcoming April 27-28 monetary policy review and not do more, analysts say the weak yen piles pressure on Kuroda to tweak its zero-rates, yield curve control policy soon.Kuroda made clear on Monday that while a weak yen could impact corporate profits, it was premature to debate any exit from that easy policy. Japanese Prime Minister Fumio Kishida said on Friday the central bank’s monetary policy is aimed at achieving its 2% inflation target, not at manipulating currency rates. Finance Minister Suzuki has spoken several times in the past weeks, warning that a weak yen is “bad” for Japan’s economy if rising costs of raw materials cannot be passed onto prices of goods sold.JPMorgan (NYSE:JPM) Securities analysts Benjamin Shatil and Sosuke Nakamura said the use of the word “bad” marked a change in tone. “We have long argued that the BOJ may need to blink if yen weakness is sufficient to cause political repercussions,” they wrote on Friday. “The risk to running short yen positions will be any capitulation in Kuroda’s thus-far positive assessment of yen weakness.”Meanwhile, concerns over global supply elevated oil prices further on Monday [O/R], adding to the headwinds for the energy-importing Japanese economy.HAWKISH FEDThe dollar stayed close to a two-year high versus the euro, supported by the unremitting hawkish comments from Fed officials.The euro was flat around $1.08, just off last week’s low of $1.0758, a level unseen since April 2020.The Fed last month delivered the first in what is expected to be a series of interest rate increases this year and into next to bring down 40-year high inflation. New York Fed President John Williams said on Thursday that a half-point rate rise next month was “a very reasonable option”, while Cleveland Federal Reserve Bank President Loretta Mester signalled rates should rise quickly.Last week, the European Central Bank confirmed plans to end its hallmark stimulus scheme in the third quarter, but stressed there was no clear timeframe for when ECB rates would start to rise, and that policy is flexible and can quickly change.Meanwhile, the Australian dollar hovered near its lowest in a month at $0.7383.Cryptocurrency bitcoin continued to straddle the $40,000 mark, last changing hands at $39,748. More

TOKYO (Reuters) – Bank Of Japan Governor Haruhiko Kuroda said on Monday that the recent sharp weakening in the yen could impact on Japanese firms’ earnings plans.It is desirable that currencies move stably reflecting economic fundamentals, Kuroda told a parliament session. More

COLOMBO (Reuters) – Sri Lanka’s worst economic crisis has triggered an unprecedented wave of spontaneous protests as the island nation of 22 million people struggles with prolonged power cuts and a shortage of essentials, including fuel and medicines.President Gotabaya Rajapaksa’s government has come under growing pressure for its mishandling of the economy, and the country has suspended foreign debt payments in an effort to preserve its paltry foreign exchange reserves.On Monday, Sri Lanka will begin talks with the International Monetary Fund (IMF) for a loan programme, even as it seeks help from other countries, including neighbouring India, and China.HOW DID IT GET TO THIS?Economic mismanagement by successive governments weakened Sri Lanka’s public finances, leaving its national expenditure in excess of its income, and the production of tradable goods and services at an inadequate level.The situation was exacerbated by deep tax cuts enacted by the Rajapaksa government soon after it took office in 2019, which came just months before the COVID-19 crisis.The pandemic wiped out parts of its economy – mainly the lucrative tourism industry – while an inflexible foreign exchange rate sapped remittances from its foreign workers.Rating agencies, concerned about government finances and its inability to repay large foreign debt, downgraded Sri Lanka’s credit ratings from 2020 onwards, eventually locking the country out of international financial markets.But to keep its economy afloat, the government still leaned heavily on its foreign exchange reserves, eroding them by more than 70% in two years.By March, Sri Lanka’s reserves stood at only $1.93 billion, insufficient to even cover a month of imports, and leading to spiralling shortages of everything from diesel to some food items.J.P. Morgan analysts estimate the country’s gross debt servicing would amount to $7 billion this year, with the current account deficit coming in around $3 billion. For a related graphic on Sri Lanka’s shrinking forex reserves, click https://tmsnrt.rs/3tho32LWHAT DID THE GOVT DO?Faced with a rapidly deteriorating economic environment, the Rajapaksa government chose to wait, instead of moving quickly and seeking help from the IMF and other sources.For months, opposition leaders and experts urged the government to act, but it held its ground, hoping for tourism to bounce back and remittances to recover.Newly appointed Finance Minister Ali Sabry told Reuters in an interview earlier this month that key officials within the government and Sri Lanka’s central bank did not understand the gravity of the problem and were reluctant to have the IMF step in. Sabry, along with a new central bank governor, was brought in as part of a new team to tackle the situation. But, aware of the brewing crisis, the government did seek help from countries, including India and China. Last December, the then finance minister travelled to New Delhi to arrange $1.9 billion in credit lines and swaps from India.A month later, President Rajapaksa asked China to restructure repayments on around $3.5 billion of debt owed to Beijing, which in late 2021 also provided Sri Lanka with a $1.5 billion yuan-denominated swap. For a related graphic on Sri Lanka’s foreign debt, click https://tmsnrt.rs/33M3AIQ WHAT HAPPENS NEXT?Finance Minister Sabry will start talks with the IMF for a loan package of up to $3 billion over three years.An IMF programme, which typically mandates fiscal discipline from borrowers, is also expected to help Sri Lanka draw assistance of another $1 billion from other multilateral agencies such as the World Bank and the Asian Development Bank. In all, the country needs around $3 billion in bridge financing over the next six months to help restore supplies of essential items including fuel and medicine.India is open to providing Sri Lanka with another $2 billion to reduce the country’s dependence on China, sources have told Reuters.Sri Lanka has also sought a further $500 million credit line from India for fuel.With China, too, the government is in discussions for a $1.5 billion credit line and a syndicated loan of up to $1 billion. Besides the swap last year, Beijing also extended a $1.3 billion syndicated loan to Sri Lanka at the start of the pandemic. More

The Chartered Management Institute said many businesses were wary of offering pay rises when other costs were soaring and some feared that consumer demand would soon falter.”We’ve not really seen the full effects of the Ukraine conflict filter through yet, and it’s clear that pressure is mounting across the board and there are undoubtedly some rocky times ahead,” Anthony Painter, the CMI’s director of policy, said.Pay settlements in the private sector averaged 3.2%, compared with 2.4% in the public sector, the CMI data showed, roughly in line with other similar surveys. While bigger pay rises would help ease the cost of living squeeze being felt by most British workers, the Bank of England is concerned that hefty pay rises could make it harder to get inflation back to target.Consumer price inflation hit a 30-year high of 7.0% in March, and some economists think it could reach double digits later this year.The BoE’s own survey of employers pointed to pay settlements of almost 5% this year, far higher than the usual trend.So far there has been little sign of increases on that scale. Last month, pay data company XpertHR said the average award in the three months to the end of February was 3%, the joint-highest since 2008. Three percent was also the average pay rise that businesses planned for 2022 as a whole, the Chartered Institute of Pay and Development (CIPD) said.Average annual wage growth excluding bonuses — which unlike pay settlement data includes raises due to job moves and promotions — was 4.0% in the three months to February, according to official data published last week.The CMI survey showed only about half of firms surveyed between March 31 and April 5 had definitely decided to raise pay this year, with 48% either deciding against a raise or unsure.By contrast, the XpertHR and CIPD surveys have previously shown less than 10% of employers intended to freeze pay. More