Tag Archives: Inflation

SYDNEY (Reuters) – Australia’s economy is forecast to have grown the fastest in the past 12 years, although the country has yet to get out of trouble with fiscal stimulus easing and companies hit by the coronavirus are still reluctant to increase spending.

Official figures on Wednesday will show the economy grew by about 2.5% in the July-September quarter, according to a Reuters poll, bouncing back from its first recession since 1991. Gross domestic product slumped 7% in the previous three months as the coronavirus control brought it back. a lot of impact. the country came to a standstill.

Growth in the current quarter looks stronger as the state of Victoria, previously a hotspot for COVID-19, emerged from the lockdown of the marathon in October, while other states reopened widely in May. Most of Australia, including Victoria, has seen no new community cases for weeks.

Even so, the country’s central bank is expected to keep policy rates near zero and extend its A $ 100 billion ($ 73.86 billion) quantitative easing program next year as inflation and unemployment are likely to lower its target range for the time being.

“The biggest unknown is whether consumers and businesses are spending money,” said Peter Munckton, chief economist at the Bank of Queensland.

Business investment, badly needed to boost productivity and growth, is still frozen while unemployment has risen to 7.2% from below 5% before the pandemic and there is no sign of wage inflation.

“The central case economic forecast for the next two years is still not good enough,” added Munckton.

“Current projections have sharply reduced fiscal policy support in the next financial year. It also means that the Reserve Bank may have to further increase the size of its bond-buying program. “

However, the short-term prospects are better.

Preliminary data on Monday showed fewer Australians were on the government’s “Keeper of Work” temporary welfare payments in October as the economy continued to reopen, allowing more people to return to work.

Business and consumer confidence have surged in recent months while household spending has also surged. The price of housing and home loans has also increased.

Most economists have increased their GDP forecasts for the last two quarters of 2020.

A rise in GDP in the fourth quarter will see Australia and New Zealand into outliers, with growth in other parts of the developed world expected to slow as countries face a new wave of infections.

Some expect Australia’s economic output to return to pre-pandemic levels as soon as the first half of next year.

Conversely, several countries in the northern hemisphere should continue with lockdown conditions, suggesting “expectations for pre-COVID activity levels need to be pushed further into the future,” said Citi economist Josh Williamson.

Reporting by Swati Pandey; Editing Ana Nicolaci da Costa and Sam Holmes

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pakistan

Multan rallies against inflation, unrest: PPP | Instant News

November 28, 2020 NewsDesk

KHANGARH – South Punjab PPP Information Secretary and Member of the National Assembly Nawabzada Iftikhar Ahmad Khan said the Multan rally was intended to record public protests against inflation, unemployment, unrest and incompetent rulers. Speaking at a bustling press conference at his residence Saif Nagar Khangarh on Friday, Nawabzada Iftikhar Ahmad Khan added that incompetent rulers had so far arrested more than 300 PDM workers. Meanwhile they were forced to show their thumbs up on the short bond form for not attending the rally. On the other hand, more than 30 containers were placed around the venue last night and the roads were closed which was despicable. Khan has revived the era of dictatorship. He said Multan rallies would still be held while people from villages in South Punjab would participate in caravans. He said that Imran Khan and his team are pushing the country into economic woes, while people are forced to commit suicide because of inflation, he said that people pay nawafil to get rid of incompetent rulers and the PDM movement will only suffocate. by sending home the incompetent Prime Minister KHAN KHANGARH

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Brazil

UPDATE 1-Brazil’s stable currency to ease inflationary pressures, said the head of cenbank | Instant News

November 26, 2020 NewsDesk

(Adding details, quotes, graphics)

BRASILIA, Nov 26 (Reuters) – Brazil’s currency appears to have stopped weakening and is now stabilizing, suggesting the upward pressure on inflation from this year’s persistently weak exchange rate will disappear, Roberto Campos Neto, president of the central bank, said on Thursday. .

In an online interview with media outlet MyNews, Campos Neto said the central bank is taking a longer-term view on inflation, and there is little to suggest long-term price pressures have changed much or inflation will exceed the bank’s target next year.

“We see that the exchange rate has stopped (weakened), or has been at this level for some time, so we think this effect (on inflation) will weaken,” said Campos Neto.

The Brazilian real has become one of the worst performing currencies in the world this year, falling nearly 30% against the dollar due to record low interest rates and uncertainty surrounding the government’s fiscal stability.

This, along with rising food prices and strong consumer demand thanks to the government’s emergency aid payments, has pushed inflation to the point where many economists now say the central bank will start raising interest rates early next year than they previously expected.

The real fell as low as 6.00 per dollar earlier this year but has recovered, and is now testing a key technical level on the 200-day moving average.

Campos Neto said the central bank is not looking at daily inflation, but is taking a longer-term view.

“It’s not just the central bank that thinks long-term inflation expectations won’t increase. The market doesn’t think so either. It’s important to show this, “he said.

The central bank’s official inflation targets for this year, next year and 2022 are 4.00%, 3.75% and 3.50%, respectively. According to the central bank’s latest weekly survey of economists, inflation will fall this year and next year, reaching 3.50% by 2022.

But producer price inflation data on Thursday showed upward pressure remained strong, with factory gate prices in October rising at a record monthly 3.4%.

Reporting by Jamie McGeever and Marcela Ayres; Edited by Toby Chopra and Paul Simao

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Germany

Germany’s second partial lockdown is weighing on consumer morale | Instant News

November 26, 2020 NewsDesk

BERLIN (Reuters) – German consumer morale fell further into December as a partial lockdown to curb a wave of the coronavirus in Europe’s second largest economy hit household income expectations as well as their willingness to buy, a survey showed on Thursday.

FILE PHOTOS: People wearing face masks take pictures on the shopping street Schloss Strasse, as the coronavirus disease (COVID-19) outbreak continues, in Berlin, Germany, 24 October 2020. REUTERS / Fabrizio Bensch

The GfK Institute said its consumer sentiment index, based on a survey of about 2,000 Germans, fell to -6.7 in November from -3.2 in the previous month.

The figure missed Reuters forecasts for a narrower decline to -5.0.

GfK consumer expert, Rolf Buerkl, said although retail shops have remained open so far, the closure of restaurants, bars, hotels and entertainment venues since November 2 has clouded consumers’ moods.

The increasing number of COVID-19 increases uncertainty so that more Germans are holding back their money, Buerkl added.

“The hopes for a speedy recovery that emerged in early summer are definitely dashed,” said Buerkl.

German business morale also fell in November, suggesting that the economy will shrink in the fourth quarter due to new restrictions, the Ifo agency said on Tuesday.

Germany’s infection rate has risen and its cases are close to one million, with daily deaths from COVID-19 hitting a record 410 on Wednesday.

Chancellor Angela Merkel agreed with the leaders of Germany’s 16 federal states to extend and tighten measures against the coronavirus until at least December 20 and they are likely to extend this to January, he said on Wednesday.

“Only a real drop in infections and easing of restrictions will bring even more optimism,” said Buerkl, adding that the rate of infection in the coming weeks will determine whether consumer sentiment can stabilize again.

The consumer climate indicator predicts the development of real private consumption in the following month.

A reading of the indicator above zero indicates growth in private consumption from year to year. Below zero values indicate a decrease compared to the same period last year.

According to GfK, a one-point change in the indicator corresponds to a 0.1 percent year-on-year change in private consumption.

The “willingness to buy” indicator represents a balance between positive and negative responses to the question: “Do you think now is a good time to buy big things?”

The income expectations sub-index reflects expectations about developments in household finances in the next 12 months.

The additional business cycle expectations index reflects the assessment of those who question the general economic situation in the next 12 months.

Reporting by Riham Alkousaa; Edited by Michael Nienaber

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The UK postponed changes to the RPI inflation to encourage bond investors | Instant News

November 26, 2020 NewsDesk

LONDON (Reuters) – UK finance minister Rishi Sunak on Wednesday said there would be no changes to the outdated Retail Price Index before 2030, to boost inflation-related government bondholders.

In 2013, British statisticians said the measure was overestimating inflation, and have since urged the government and the public to use measures based on the Consumer Price Index, which is usually about 1% lower a year.

But the RPI remains widely used not only to calculate interest payments on 343 billion pounds of index-linked bonds but also for student loans and annual rail rate increases, some pensions and many commercial contracts.

Because of the RPI’s role in the bond market, statisticians need permission from the finance ministry to make any changes that take effect before 2030.

Bond prices linked to short and medium term inflation surged on news of the delay. The real yield on bonds linked to the main 10-year index fell 9 basis points, representing the biggest daily price increase since September 8.

Last year, the UK Statistics Authority requested permission to recalculate the RPI to be in line with CPIH, a CPI measure that includes an estimate of the cost of additional housing.

The UK finance ministry said last year it would consider implementing reforms between 2025 and 2030, which would lower interest payments to bondholders.

But on Wednesday, Sunak said a change to the RPI would be too disruptive for bond investors, with Britain raising a financial record 485.5 billion pounds this year, of which 33.2 billion pounds will be in gilts on the index.

“I will not be able to offer my approval for the implementation of such a proposal before the maturity of the final specific index gold by 2030,” Sunak said in a letter to UKSA.

UKSA said it would change the RPI by February 2030, as soon as legally possible.

RPI critics say past failure to change it has effectively cost the public billions of pounds in extra interest payments on government bonds.

This is argued by bond investors who say that in recent years, the increase in the RPI rate has been a factor in the price of bonds when they are sold by the government.

Pension consultants Lane, Clark & Peacock said some pension funds will face deficits, even with changes pending.

“The schemes that have suffered the most are those that have invested heavily in index-linked government bonds and have increased returns in terms of CPI,” said LCP partner Jonathan Camfield.

Reporting by David Milliken; Edited by William James and Catherine Evans

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