China’s factory activity contracted unexpectedly in July after bouncing back from COVID-19 lockdowns the month before, as fresh virus flare-ups and a darkening global outlook weighed on demand, a survey showed on Sunday.

The official manufacturing purchasing managers’ Index (PMI) fell to 49.0 in July from 50.2 in June, the National Bureau of Statistics (NBS) said, below the 50-point mark that separates contraction from growth and the lowest in three months.

Analysts polled by Reuters had expected a reading of 50.4.

“The level of economic prosperity in China has fallen, the foundation for recovery still needs consolidation,” NBS senior statistician Zhao Qinghe said in a statement on the NBS website.

Continued contraction in the energy-intensive industries, such as petrol, coking coal and ferrous metals, contributed most to pulling down the July manufacturing PMI, he said.

Sub-indexes for output and new orders fell by 3 points and about 2 points in July, respectively, while the employment sub-index edged down by 0.1 point.

Weak demand has constrained recovery, Bruce Pang, chief economist and head of research at Jones Lang Lasalle Inc, said in a research note. “Q3 growth may face greater challenges than expected, as recovery is slow and fragile,” he added.

The official non-manufacturing PMI in July fell to 53.8 from 54.7 in June. The official composite PMI, which includes manufacturing and services, fell to 52.5 from 54.1.

China’s economy barely grew in the second quarter amid widespread lockdowns, and top leaders recently signaled their strict zero-COVID policy would remain a top priority.

Policymakers are prepared to miss their GDP growth target of “around 5.5%” for this year, state media reported after a high-level meeting of the ruling Communist Party.

Beijing’s decision to drop mention of the target has doused speculation that the authorities would roll out massive stimulus measures, as they often have in previous downturns.

Capital Economics says that policy restraint, along with the constant threat of more lockdowns and weak consumer confidence, is likely to make China’s economic recovery more drawn-out.

Faltering recovery

After a rebound in June, the recovery in the world’s second-biggest economy has faltered as COVID flare-ups led to tightening curbs on activity in some cities, while the once mighty property market lurches from crisis to crisis.

Chinese manufacturers continue to wrestle with high raw material prices, which are squeezing profit margins, as the export outlook remains clouded with fears of a global recession.

China’s southern megacity of Shenzhen has vowed to “mobilize all resources” to curb a slowly spreading COVID outbreak, ordering strict implementation of testing and temperature checks, and lockdowns for COVID-hit buildings.

The port city of Tianjin, home to factories linked to Boeing and Volkswagen, and other areas tightened curbs this month to fight new outbreaks.

According to World Economics, the lockdown measures had some impact on 41% of Chinese companies in July, though its index of manufacturing business confidence rose significantly from 50.2 in June to 51.7 in July.
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Danira Ford is a lifelong resident of New Orleans, Louisiana. Like tens of thousands of the city’s inhabitants, she has struggled to find an affordable place to live for her and her five children.

“Affordable housing would bring stability,” she said.

“My kids can’t play sports, be in band or get tutored on their homework because mommy needs to pick up extra shifts to cover rent,” Ford continued. “An affordable home would let them live more like normal children.”

A 2018 report by the United States Department of Housing and Urban Development (HUD) estimated that 80% of New Orleans households pay more for housing than they can afford. The Greater New Orleans Fair Housing Action Center recently estimated that 30,000 families in the city are languishing on a waitlist for an affordable housing voucher from the Housing Authority of New Orleans. By issuing a voucher, the city is agreeing to pay up to a certain amount of the voucher holder’s rent.

But the problem extends far beyond New Orleans. In a May 2022 news release on the Biden Administration’s housing supply action plan the White House said that while estimates vary, financial research company Moody’s Analytics estimates that the shortfall in the housing supply is more than 1.5 million homes nationwide.

In a 2021 white paper “Overcoming the Nation’s Daunting Housing Supply Shortage,” by Moody’s Analytics, co-authored by Jim Parrot, a nonresident fellow at Urban Institute, and Mark Zandi, chief economist at Moody’s, the U.S. has less housing available for rent or sale now than at any point in the last three decades.

As federal, state and local officials search for solutions, an ongoing affordable housing crisis is having real effects on residents.

Ford and her family, for example, have been waiting for an affordable housing voucher for more than a decade. Without it, she has cobbled together only enough money to live in the farther reaches of the metropolis, away from many of its amenities.

“It’s far from my work, it’s far from my kids’ schools, it’s far from grocery stores, it’s far from public transportation, it’s far from friends,” Ford said. “When it’s all you can afford, what choice do you have? But, also, what kind of life is it?”

Getting pushed out

Since the onset of the coronavirus pandemic, potential homebuyers and renters across the U.S. have seen real estate prices skyrocket and the supply of available units plummet. According to a Pew Research Center study last year, 85% of Americans said availability of affordable housing was a problem in their community. Forty-nine percent of respondents indicated it was a major problem, up from 39% just three years earlier.

According to HUD, housing becomes a problem when a household spends more than 30% of its income on home-related costs. This is known as “cost burdened,” a designation that applies to nearly 1 in 3 Americans.

Exacerbating the problem, Real Estate brokerage company Redfin found rent has risen sharply over the past two years, as much as 40% in some metro areas, while according to data this year from the U.S. Bureau of Labor Statistics, real wages — or the amount workers earn relative to inflation — has actually fallen by 1.2% since the end of 2019.

Workers can no longer afford to purchase or rent homes in the neighborhoods they once could.

“The result is that thousands of residents — mostly people of color — get pushed farther and farther outside of desirable neighborhoods,” said Maxwell Ciardullo, director of policy and communications at the Louisiana Fair Housing Action Center.

Evidence of the trend isn’t hard to find in New Orleans. Just east of the city’s famed French Quarter, the Bywater neighborhood was once considered a dangerous area, a perception that helped keep rents low. Over the past 20 years, however, helped in large part by its faring better than most during Hurricane Katrina, the Bywater has seen one of the area’s most rapid increases in home and rental prices.

“And that’s resulting in a demographic shift,” Ciardullo told VOA. “In the year 2000, the census tract that encompasses most of the Bywater had 74% Black residents. Just 20 years later, that was down to 37%.”

Multifaceted problem

A crisis of this magnitude stems from many causes.

The white paper blames the shortage of affordable housing primarily on the 2008 financial crisis. In the years that followed, a shortage of land, lending, labor and building materials drove up the cost of building new homes. This cut into contractors’ profit margins and reduced their incentive to build.

The coronavirus pandemic exacerbated the problem as more Americans sought larger homes where they could telework and live comfortably during lockdowns.

“In New Orleans, we were certainly experiencing these issues,” Ciardullo said, “but we also had some unique challenges, such as an aged housing stock and a lot of gentrification.”

“You used to be able to buy a home for really cheap,” said Alton Osborne, co-owner of the Bywater Bakery. In the 1990s, he bought a home in the neighborhood that he still owns today.

“They were blighted, but at least they were affordable,” Osborne said. “Nowadays, you have a lot of people who moved here from out of town and bought those homes, rehabilitated them, and now they’re worth a lot more. Is it a good thing? Is it a bad thing? It’s complicated, but what’s certain is a lot of people don’t have enough money to live in this neighborhood anymore.”

Short-term rentals

One of the most high-profile reasons for New Orleans’ lack of affordable housing is the prevalence of short-term rentals, through Airbnb and other services, popular with the throngs of tourists who visit the city.

“In the Bywater, you’ve got entire blocks now taken over by Airbnb,” Osborne said.

According to the Inside Airbnb website, which looks at the rental service’s impact on communities, the city has more than 5,500 short-term rental units on Airbnb alone — dwellings that could otherwise go to local tenants. Renting to tourists at high prices also tends to drive up the rents on other types of units.

It’s simple math, according to Bywater Neighborhood Association President John Guarnieri.

“A landlord can make a ton more money renting short term on something like Airbnb than they can by renting to locals with a long-term lease,” he said. “It’s not even close.”

New Orleans City Council has worked in recent years to combat the problem by passing laws regulating how much of each property can be used as a short-term rental, as well as limiting the number of guests allowed per unit. Additionally, fees from each booking are used to contribute to a citywide affordable housing fund.

“It’s a good and important step,” said Ciardullo, “but enforcement has been severely lacking so far.”

In addition to attempting to regulate short-term rentals, lawmakers across the U.S. have sought to address the affordable housing crisis with proposals as varied as raising the minimum wage, mandating rent control, subsidizing affordable housing and pursuing partnerships with developers.

In New Orleans, the City Council passed a zoning ordinance that allows the construction of larger buildings if a percentage of those units are made available at affordable prices.

Policies like these can take years to bring about tangible results, but several large projects in the Bywater are said to be close to breaking ground. But forcing change in a neighborhood can trigger resistance from existing residents.

“As neighbors, we’ve learned to fight back against so much development,” said Julie Jones, president of the Neighbors First for Bywater organization. “It’s just too much for one neighborhood to be expected to take. We like our Bywater as it feels now.”

Jones is far from alone. As each housing project is announced, more residents seem to worry about its effect.

For example, a plot of land awaiting development into a 90-unit mixed income residential building currently serves as a de facto park for the community. As the project’s groundbreaking nears, neighbors bemoan the eventual loss of this greenspace.

New Orleanian Danira Ford just shakes her head.

“I understand they enjoy that space,” she said, “but for families like mine, affordable housing like this would change our lives. We’re not talking about a park. We’re talking about a home and a new and better life.”
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Pakistan’s military chief has reportedly sought help from the United Sates in securing the early disbursement of an International Monetary Fund loan as the high price of energy imports pushes the cash-strapped South Asian nation to the brink of a payment crisis.

General Qamar Javed Bajwa spoke by phone to Deputy U.S. Secretary of State Wendy Sherman earlier this week and raised the issue, government sources told VOA late Friday on condition of anonymity.

Pakistan last week reached a staff-level agreement with the IMF for the revival of a multibillion-dollar bailout package. However, the deal is subject to approval by the lender’s board, which is due to meet in late August. Islamabad is expected to get about $4.2 billion under the loan program, starting with an initial tranche of about $1.2 billion.

Foreign Ministry spokesperson Asim Iftikhar Ahmad has confirmed the phone contact between Bajwa and Sherman but did not share details.

“Well, I understand conversation has taken place, but at this stage, I am not in direct knowledge of the content of this discussion,” Ahmad told a weekly news conference in Islamabad.

A State Department spokesperson in Washington would not directly confirm whether the conversion had taken place.

“U.S. officials talk to Pakistani officials regularly on a range of issues. As standard practice, we don’t comment on the specifics of private diplomatic conversations,” the spokesperson told VOA.

Nikkei Asia first reported Friday on the Bajwa-Sherman contact, saying the Pakistani military chief asked for the White House and Treasury Department to use their leverage to help speed up the release of the loan. The United States is the largest shareholder in the IMF.

“Yes,” the sources in Islamabad said when asked whether the two officials had spoken on the matter involving the IMF loan disbursement. The outcome of Bajwa’s appeal was not known immediately, however.

Critics attributed the delay in the release of the loan to Pakistan’s track record of not living up to commitments to undertake crucial economic reforms.

Late on Friday, Bajwa also spoke by phone to General Michael Erik Kurilla, the commander of the U.S. CENTCOM.

The army’s media wing in a statement quoted its chief as telling Kurilla that Pakistan “values its relations with (the) U.S. and we earnestly look forward to enhance mutually beneficial multi-domain relations based on common interests.”

The statement quoted U.S. commander as pledging “to play his role for further improvement in cooperation with Pakistan at all levels.”

The approval of the IMF program is key to Pakistan’s access to other avenues of finances for the country, including the World Bank and the Asian Development Bank.

Pakistan’s central bank foreign exchange reserves have dwindled to just about $8.5 billion, barely enough to cover a few weeks of imports, and its currency has fallen to historic lows against the U.S. dollar in recent days, with inflation at its highest in more than a decade.

Shortly after negotiating the deal with the IMF, Prime Minister Shehbaz Sharif’s coalition government said it would “very soon” receive the first tranche of $1.17 billion.

But Sharif is under increasing pressure from ousted Prime Minister Imran Khan, who is demanding the government step down and hold snap general elections in Pakistan.

Khan criticized Bajwa for reaching out to Washington, saying “it is not the job of an army chief to talk to the U.S. on financial matters.” The deposed prime minister told local ARY television channel in an interview the army chief’s move had demonstrated that neither the IMF nor foreign governments trust the Shehbaz administration.

Analysts noted, however, that both civilian and military leaders in Pakistan have traditionally conducted economic dealings with Washington, citing the army’s role in  Pakistani politics and foreign policy matters.

Khan alleges Shehbaz conspired with Washington to orchestrate his government’s ouster in a parliamentary vote of confidence in April, triggered in part by rising inflation. The U.S. rejects the charges.

The former prime minister indirectly also has accused the military chief of playing a role in his removal from office, charges the army rejects as politically motivated.

Khan and his Pakistan Tehreek-e-Insaf party are campaigning hard to stage a comeback in the next election widely expected to be held by October. The opposition leader has organized and addressed massive anti-government public rallies across Pakistan since his ouster.
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Кошти планується спрямувати до державного бюджету на пріоритетні видатки, в тому числі – на першочергові соціальні й гуманітарні платежі
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The European Union’s statistical office, Eurostat, on Friday estimated inflation is expected to reach a record 8.9% in July, while the Eurozone and EU economy overall continued to grow during the first quarter of 2022.

In its report, Eurostat indicated inflation in July was driven largely by the energy sector with 39.7% growth, down from 42% in June. The food, alcohol and tobacco sector follows, with a rise of 9.8%, compared with 8.9% in June. The non-energy industrial goods sector grew 4.5% compared with 4.3% in June, and the services sector grew 3.7%, compared with 3.4% in June.

For months, inflation has been running at its highest levels since 1997, when record-keeping for the euro began, leading the European Central Bank to raise interest rates last week for the first time in 11 years and signal another boost in September.

Meanwhile, Eurostat also reported Friday the eurozone’s seasonally adjusted GDP increased by 0.7% and by 0.6% in the EU overall, compared with the previous quarter. In the first quarter of 2022, GDP had grown by 0.5% in the euro area and 0.6% throughout the EU.

The positive numbers come despite stagnant growth in Germany, Europe’s largest economy. France showed modest 0.5% growth, while Italy and Spain exceeded expectations with 1 and 1.1% economic expansions, respectively.

Eurostat says the numbers for both GDP growth and inflation are preliminary flash estimates based on data that are incomplete and subject to further revision.

The Associated Press, citing regional economic analysts, reports a rebound in tourism following the COVID-19 pandemic helped drive economic growth. The analysts caution, however, that inflation, rising interest rates and the worsening energy crisis are expected to push the region into recession later this year.

Some information for this report was provided by the Associated Press.
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Рішення пояснили наміром мінімізувати спекуляції на валютному ринку в умовах війни
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