Програма компенсації витрат на оплату праці переселенців передбачає надання роботодавцям 6,5 тисяч гривень за кожного працевлаштованого
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Індія є найбільшим у світі імпортером харчової олії
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The U.S. president and members of his administration are avoiding the “R word” – recession – despite the assertion by opposition party politicians and some economists that the country’s economy now meets that definition.

Speaking in the White House State Dining Room on Thursday, President Joe Biden said Federal Reserve Chairman Jerome Powell, as well as “many of the significant banking personnel and economists, say we’re not in recession.”

He then outlined the job growth and high-tech investment during his administration, concluding “that doesn’t sound like a recession to me.”

Biden’s remarks came after the Commerce Department released data on Thursday showing the U.S. economy has contracted for a second straight quarter, a traditional benchmark for a recession.

The president and his administration’s chief financial officer, Treasury Secretary Janet Yellen, are to make remarks later in the afternoon about the nation’s economy.

The gross domestic product of the United States – the broad measure of goods and services produced in the country – shrank at a seasonally adjusted annual rate of 0.9 percent in the April through June period, according to the Commerce Department’s Bureau of Economic Analysis. That follows a 1.6% decline in this year’s first quarter.

“Popularly we are in a recession, because most people think that a recession involves two consecutive quarters of negative economic growth, and we’ve got that,” Desmond Lachman, an economist at the American Enterprise Institute, told VOA.

Consumer sentiment “now is close to record low levels, they’re struggling with high inflation, the wages are getting eroded, they’ve lost a lot of money on the stock exchange. So, consumers don’t feel good about the economy,” added Lachman.

Recessions in the United States are officially declared by the National Bureau of Economic Research, but such determinations are made in retrospect. Its definition of a recession is based on a significant decline in economic activity over numerous months, taking into consideration such factors as employment, output, retail sales, and household income.

“They [the BEA] only make that judgment, something like six months or a year after the numbers look like they’re indicating the recession. So, in short, it’s too early to say that we’re officially in a recession,” said Lachman.

In the meantime, economists outside the government and elected officials are free to spin the numbers to make their own declarations.

“The Biden White House can play word games and try and contort the English language as it sees fit in order to advance its radical and harmful agenda. What this administration cannot change is the fact that American consumer confidence continues to fall under Biden’s watch,” said Steve Moore, an economist with FreedomWorks, a conservative advocacy group. “Americans are overwhelmingly pessimistic about the state of the Biden economy, and no wordplay over the definition of ‘recession’ can change that.”

Numerous Republican members of Congress quickly took to Twitter immediately after the data was released to declare the country is now in a recession.

“Democrats threw us into recession,” said Senator Ted Cruz, a member of the Senate’s joint economic committee.

“Biden and his army of woke journalists can obscure this all they want, but they cannot escape this fact: America is in a recession,” declared Carlos Gimenez, a congressman from Florida and member of the House transportation and infrastructure committee. “Hardworking American families deserve so much better than what this administration has put us through in the last year.”

“The U.S. is officially in a recession, thanks to the Democrats’ reckless spending. Americans are suffering because of Joe Biden’s America-last policies,” said Jeff Duncan, a congressman from South Carolina and a member of the House Energy and Commerce committee.

Inflation in the country hit a 40-year high of 9.1 percent last month. The country’s central bank, the Federal Reserve, hiked interest rates on Wednesday by three-quarters of a percent, its latest such increase to try to tame price hikes, but a move some economists warn could trigger a recession.

“The problem with the Federal Reserve is they do too little, too late,” according to Lachman. “By the time that they started raising interest rates at the beginning of this year, the inflation genie was well out of the bottle – we had multi-decade highs in the inflation rate. The same thing is now occurring this time around that the Fed keeps raising interest rates, even though there are rather clear signs that the economy is slowing.”

Lachman, a former official of the International Monetary Fund, noted that the actions by the Federal Reserve have put a lot of developing economies under pressure as capital that had flowed to those countries has returned to the United States, and a stronger dollar is making it difficult for those countries to fund their balance of payment deficits.

“Once the United States economy slows, it means that the export markets for the emerging market countries isn’t as robust as it was before. So, we could see difficulty for the emerging market, certainly the remainder of this year, but there might be relief next year, once the Fed stops this interest rate hiking cycle and begins cutting interest rates,” predicted Lachman.

“Our goal is to bring inflation down and have a so-called soft landing, by which I mean a landing that doesn’t require a significant increase in unemployment,” Powell told reporters on Wednesday. “We understand that’s going to be quite challenging. It’s gotten more challenging in recent months.”
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A breakthrough agreement announced by Senate Democrats on Wednesday, which would dedicate hundreds of billions of dollars to addressing climate change and other Democratic priorities, is designed to raise federal revenues by increasing taxes on wealthy Americans and large corporations. But the agreement sidesteps an international tax agreement brokered by the Biden administration.

That agreement, which is meant to require large multinational companies to pay taxes in the countries where they do business and to pay a global minimum of 15% on profits worldwide, is opposed by Senator Joe Manchin, the conservative Democrat who has withheld his vote on a number of the Biden administration’s priorities. Manchin said he is concerned that U.S. companies will be placed at a disadvantage if the U.S. implements the law and other countries do not.

The 15% global minimum tax is distinct from a 15% minimum tax on corporations that is reportedly in the deal that Manchin struck with Senate Majority Leader Chuck Schumer.

The agreement in the new proposed deal applies to “taxable income” and takes many deductions and adjustments into account. The international deal applies to “book income,” which corporations report on financial statements to shareholders and is typically a much larger figure. 

Ironically, the failure to implement the law could harm U.S. tax revenues while doing little to benefit companies based here. A provision in the agreement allows other countries to impose additional taxes on multinational corporations if their home countries do not tax their profits at a minimum rate of 15%. 

According to Congress’s Joint Committee on Taxation, if the U.S. were to adopt the agreement and implement that rule, the Internal Revenue Service would collect an additional $23 billion in 2023, and nearly $319 billion in the 10 years ending in 2032. The committee says failure to adopt the rule could mean those revenues flow to other countries’ treasuries. 

Adoption slow

The U.S. is not the only country slow in adopting the new rules. European Union negotiations over implementation recently hit a snag when Hungary declared itself unwilling to raise taxes on its domestic corporations. The United Kingdom and Japan have drafted implementation guidelines, but they are not yet official. 

The overwhelming majority of countries that signed on to the accord have still not taken steps to actually put it in place. 

“This entire process has been very uncertain and difficult to predict,” Will McBride, vice president of federal tax and economic policy at the Tax Foundation, told VOA. “It’s actually introduced a lot of uncertainty into international tax, although it was initially pitched, and continues to be pitched, as a way to create certainty for taxpayers.” 

135-country agreement

The global minimum tax is part of a larger international taxation framework developed under the auspices of the Organization for Economic Cooperation and Development and the G-20 group of large economies. The deal brought together more than 135 countries in an effort to control “base erosion and profit shifting,” known by the acronym BEPS.  

BEPS refers to tax strategies employed by multinational corporations. The practice involves strategically placing operations in low-tax jurisdictions, thereby eroding the tax “base” of their home countries, and then “shifting” profits earned internationally so that they are paid in those low-tax jurisdictions.  

The OECD estimates that as much as $240 billion in global tax revenue is lost to BEPS every year.  

Two pillar

The agreement, finalized in 2021, has two pillars. The first includes a mechanism for allocating a share of large multinational corporations’ profits to the countries where their products and services are actually consumed, preventing those profits from being booked in tax haven countries. 

The second pillar includes a 15% minimum tax rate on those profits across all countries in the agreement. The pillar also contains a mechanism meant to prevent participating countries from reducing their tax rates in order to attract companies to their shores. If a country does not tax corporate profits earned within its borders at 15%, other countries have the ability to “top up” their tax assessments of those companies in order to bring its total tax rate up to 15%.  

The thinking behind the design is that it eliminates the benefits a corporation gets from moving to a low-tax country, while simultaneously encouraging governments around the world to adopt the 15% rule, because if they do not, other governments will collect the additional taxes anyway. 

“Under Pillar Two, it’s the country of residence that gets the first crack at taxing the foreign income of their multinationals,” Thornton Matheson, a senior fellow at the Urban-Brookings Tax Policy Center, told VOA. “But if they don’t do that, then the countries in which they operate can effectively tax their subsidiaries as if they were subject to such a rule.” 

“If the European countries were all applying this, it could undermine U.S. revenues,” she said, adding that such a situation would create an incentive for the U.S. to put the agreement into force. 

Doubts about effectiveness

Some experts remain doubtful that the global minimum tax, even if it were adopted universally, would actually end the practice of countries using financial incentives to attract corporations to their jurisdictions. 

Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told VOA that even with a 15% minimum tax in place and strictly enforced, there are a multitude of ways that governments can deliver other benefits that offset that burden. 

As an example, he pointed to the legislation currently working its way through Congress that would provide billions in subsidies and tax credits to the semiconductor industry in order to spur growth in U.S.-based production. 

“If you have a minimum tax of 15%, and then give $50 billion plus $24 billion of tax credits to semiconductor companies, what does that tell you? To me as an economist, that’s a negative tax. And other countries will do the same for industries that they regard as critical to their security or livelihood, or whatever the rationale is,” he said.

McBride of the Washington-based Tax Foundation noted that the agreement has an explicit carve-out that prevents direct subsidies from being counted as an offset to a company’s tax burden. 

“It actually incentivizes countries … to go with direct subsidies as a way to attract companies,” he said. 
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The United States is due to release economic growth data from April to June on Thursday, amid fears the economy could be approaching a recession.

Forecasters estimated slight growth in the second quarter of less than 1%.

The previous quarter saw the gross domestic product decline 1.6%.

A second consecutive negative quarter would meet the informal definition of a recession.

Thursday’s report comes a day after the Federal Reserve again raised the benchmark interest rate as it tries to bring down inflation.

Some information for this report came from The Associated Press and Agence France-Presse.
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Chinese authorities are promising to establish an initial rescue fund of $11.8 billion (80 billion yuan) to offset a looming crisis in the real estate sector, where homebuyers routinely purchase residences from developers’ plans and begin making mortgage payments before the dwellings are finished. 

By having customers purchase homes “off plan,” builders can receive construction financing and shift risks — such as costly pandemic-related supply chain delays and bankrupt builders — to the middle-class homebuyers. 

For many buyers, the risks seemed worth it. But then China’s COVID-cooled economy strained many family budgets, and draconian lockdowns stalled work on residential projects. As home prices fell, some buyers found themselves paying mortgages on properties worth less than what they had agreed to pay. That was followed by the tightening policies in August 2020, when the central government realized real estate developers’ debt was getting out of control, and draconian lockdowns stalled work on residential projects. 

Amid all this, many homebuyers announced they would stop making mortgage payments to banks until work resumed on unfinished projects. 

Experts say the boycott is a byproduct of two decades of insufficient oversight over a red-hot real estate sector. One economist likened the situation to a Ponzi scheme, a type of fraud that pays existing investors with funds collected from new investors. 

Reuters describes the promised rescue fund as the first step in creating a “war chest” of as much as $44 billion (300 billion yuan). The state hopes the effort, announced Sunday, will not only help property developers resolve a debt crisis but also restore confidence in the real estate sector. 

A state bank official who declined to be named due to the sensitivity of the matter told Reuters that the fund would initially be set at 80 billion yuan through People’s Bank of China and China Construction Bank. 

High risks, low supervision

Mr. Fang, a real estate developer in China and the United States who asked that VOA Mandarin not use his real name for fear of reprisal, said while U.S. banks supervise and control loans issued to off-plan property developers from groundbreaking to occupancy, Chinese banks offer less supervision. 

According to China’s presale housing regulation, funds received from sales of homes must be used to build them, a process supervised by the Ministry of Housing and Urban-Rural Development and banks.

In practice, however, poor supervision is common, according to Fang. 

In this environment, Chinese developers “want to take big risks,” Fang said. 

Instead of putting buyers’ mortgage payments toward construction of their homes, Fang said, Chinese developers buy more property. 

With the economy and housing market cooling off, it is “basically suicidal” to buy more land on the assumption that developing it will pay for finishing construction underway elsewhere, Fang said. 

‘A bit like a Ponzi scheme’

An economist in China, who requested anonymity due to fear of reprisal, told VOA Mandarin that real estate companies have never been regulated. 

“When the economy is good, with the continuous expansion, most of the properties can be delivered. But when the economy is not good, it becomes a bit like a Ponzi scheme. If there is no follow-up funding, they will not able to complete construction,” she said. 

A Chinese banking regulator said on July 21 that it will coordinate support to property developers in need of loans after homebuyers stopped making mortgage payments, usually putting the money into escrow accounts instead. 

At a press conference in Beijing last Thursday, Liu Zhongrui, director of the Statistical Information and Risk Monitoring Department of the China Banking and Insurance Regulatory Commission (CBIRC), said that banks and other government departments will meet reasonable financing needs of real estate developers. But he did not give details. 

“We actively strengthen the coordination and cooperation with the Ministry of Housing and Urban-Rural Development, the People’s Bank of China and other departments, and support local governments to more effectively promote the work of ‘guaranteeing the delivery of buildings, protecting people’s livelihood, and maintaining stability,'” Liu said. 

The earliest “mortgage boycott notice” by more than 5,000 homebuyers appeared in April 2021 in Taiyuan, in the northern province of Shanxi, after a local developer’s project languished unfinished for more than two years. 

Letters to banks

Last month, homeowners in Jingdezhen, in northeastern Jiangxi province, sent a letter to their banks announcing they were suspending mortgage payments because of the delayed delivery of residential units purchased off plan. Since then, homeowners of more than 300 unfinished residential projects nationwide have sent similar public letters to banks. 

Last week, some 200 frustrated home buyers in Wuhan demonstrated outside a bank regulator’s office, according to an article in The Wall Street Journal. 

It’s unclear how many homebuyers are involved in the protests because Chinese censors are clamping down on news of mortgage boycotts, Reuters reported.

A study, the “2022 National Unfinished Building Research Report,” published July 18 by the Shanghai-based E-House China Research and Development Institution, a think tank that analyzes the real estate market, found that 54% of homeowners who issued mortgage suspension notices came from the central China province of Henan, home to a billion-dollar banking scandal.

According to the report, the value of mortgage loans involving unfinished buildings nationwide was $133.2 billion (900 billion yuan) in the first half of 2022, accounting for 1.7% of the national mortgage balance. 

“This industry is a mess, and no one used this kind of quantitative analysis to analyze it before,” Yan Yuejin, the report’s author and the think tank’s director of research, told VOA Mandarin. 

Although 1.7% does not sound high, it is already very high and poses a serious risk for banks, Yan said. “The banks’ tolerance rate for this [kind of] nonperforming loan … should not exceed 1%.”
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Meta Platforms Inc. issued a gloomy forecast after recording its first ever quarterly drop in revenue Wednesday, with recession fears and competitive pressures weighing on its digital ads sales. 

Shares of the Menlo Park, California-based company were down about 4.6% in extended trading. 

The company said it expected third-quarter revenue to be in the range of $26 billion to $28.5 billion, which would be a second consecutive year-over-year drop. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv. 

Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv. 

The company, which operates the world’s largest social media platform, reported mixed results for user growth. 

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year, while daily active users handily beat estimates at 1.97 billion. 

Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6% revenue growth headwind in the third quarter, based on current exchange rates. 

Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter affected more severely as ad buyers reel in spending. 

Alphabet Inc., the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker, Google search, topping investor expectations. 

Snap Inc. and Twitter both missed sales expectations last week and warned of an ad market slowdown in the coming quarters, sparking a broad sell-off across the sector. 

On top of economic pressures, Meta’s core business is also experiencing unique strain as it competes with short video app TikTok for users’ time and adjusts its ads business to privacy controls rolled out by Apple Inc. last year. 

The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on “metaverse” hardware and software. 

Meta executives told investors they were making progress in replacing ad dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown. 

They added that Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, was now generating over $1 billion annually in revenue. 

However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday. 

“They are being greatly affected by everything,” Bokeh Capital Partners’ Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple.  

“Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram … Meta should really pay attention to that.” 

On Monday, two of Instagram’s biggest users, Kim Kardashian and Kylie Jenner, shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and “make Instagram Instagram again.” 

Not persuaded

CEO Mark Zuckerberg did not appear to be swayed, however. 

About 15% of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call. 

For now, at least, the metaverse part of Meta’s business remains largely theoretical. In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year. 

Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452 million, down from $695 million in the first quarter. 

Although Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals. 

Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2 billion in 2021. 

Its second-quarter operating profit margin fell to 29% from 43% as costs rose sharply and revenue dipped. 

In November, Chief Financial Officer David Wehner will become Meta’s first chief strategy officer. Susan Li, Meta’s current vice president of finance, will become CFO.
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«Наш експорт дає нам змогу не тільки мати валютну виручку, але й допомагати нашим партнерам вистояти проти російського енергетичного тиску»
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Поляки за перші три місяці повномасштабної агресії витратили на допомогу біженцям з України більше, ніж загалом на благодійність за 2021 рік
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The U.S. Senate has passed a $280 billion initiative that would boost domestic production of microchips and provide support for a key industry that competes with overseas countries including China. VOA’s Congressional Correspondent Katherine Gypson reports.
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