The U.S. Federal Reserve is expected to impose a second major interest rate increase Wednesday in an effort to combat soaring inflation.

Observers say the central bank will likely announce an interest rate hike of three-quarters of one percentage point. The expected rate hike would be similar to one last month — the biggest boost in nearly three decades as the U.S. inflation rate soared to an annual rate of 8.6%, the highest in 40 years.

The U.S. economy has seen rising demand for goods and services among consumers as the global COVID-19 pandemic has steadily waned. But that has also led to the rising cost of most commonly used items, such as gasoline, food and clothing, as well as major items like cars, appliances and furniture.

The decision by the Federal Reserve to increase the interest rate consumers pay to borrow money is aimed at lowering such demand, which could help lower prices and bring inflation back down to the central bank’s target rate of 2% per year — but without pushing too far and causing a recession, which could lead to job losses and more economic pain.

All three major U.S. stock indices closed lower Tuesday after giant retailer Walmart cut its profit outlook and warned that rising prices of food and gasoline were prompting consumers to cut back on buying higher priced goods like electronics and clothes.

Some information for this report came from The Associated Press and Reuters.
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Two decades ago, China’s factory-driven economy awed the world as it expanded at more than 10% per year. But the country has missed double-digit growth over the past decade. The GDP shrank from April to June this year compared with the previous three months, though it topped the same quarter of 2021, but just barely.

Economists tell a consistent story about how the drop happened: Lockdowns to stop COVID-19 infections hurt factory work and export shipments. They say those setbacks added to financial hardships among China’s top property firms and the shocks of a 2021 crackdown on major Chinese tech icons. 

China’s $18 trillion economy, the world’s second largest after the United States, shrunk 2.6% from April to June compared to the first three months of the year. 

“China’s economy has seen signs of disruption since February due to the impact of COVID-19 outbreaks in a number of Chinese cities,” said Rajiv Biswas, executive director and Asia-Pacific chief economist at S&P Global Market Intelligence. He called industrial production, retail sales and port operations particular trouble spots. 

“The resulting disruption to retail sales and industrial production has been quite severe during April and May. And in Shanghai, port operations and logistics were also quite heavily disrupted during April,” Biswas said. 

Shanghai is China’s chief port city. The central government ordered lockdowns there in April. 

China’s economy grew close to 10% per year from 2003 to 2010, World Bank data show. Annual growth gradually slowed through 2019 before dipping to 2.2% in the first pandemic year, 2020, and rebounding to 8.1% last year.

Pressure on jobs, spending 

The lockdown-weary country recorded more than 6% unemployment in April, compared with nearly 5% (4.8%) at the end of 2021. Younger workers  and smaller firms have been hit especially hard, analysts say.  

Individuals contacted by VOA in Beijing, Shanghai and the inland city of Changsha this week said they knew about the employment crunch but felt their own jobs were stable.

“At least I don’t know of any friends around me who are jobless, and I’ve not heard that many complaints,” said a fashion importer who spoke on condition of anonymity.

Chinese consumers are now spending less than normal because they cannot go outside during mandatory closures, or they fear cuts in income from eventual job losses, said Alicia Garcia-Herrero, chief Asia-Pacific economist at French investment bank Natixis, who is based in Hong Kong. 

Retail sales grew at a low of 3% in June, even as lockdowns eased, Garcia said, pointing to “very negative sentiment as well as very slow growth in disposable income.”

“It is very clear that the household sentiment remains very negative, perhaps because of the uncertainty of future lockdowns as mass testing remains pervasive,” she said. 

Setbacks in property, tech, global confidence 

Last year, the economy was already faltering due to problems in real estate and tech. 

A number of big name Chinese property developers began to default on billions of dollars’ worth of loans last year, according to consultant firm Dezan Shira & Associates, who said homeowners who bought units through a “pre-pay model” are now refusing to pay mortgages on unfinished homes.

In tech, Chinese regulators began in cracking down on the country’s most powerful firms in late 2020, including e-commerce giant Alibaba Group and social media juggernaut Tencent. Regulators have cited concerns about monopolistic activity and data security.  

China’s economic malaise is worrying world markets because the “slope” of recovery is less steep than it was when COVID-19 hit in 2020, said Zerlina Zeng, a senior analyst at the CreditSights research firm in Singapore. Missed mortgage payments threaten the value assets, including property, she added.

Disruptions to export shipping and manufacturing in China have hobbled supply chains in much of the world, in turn adding to inflation and fears of recession.

Is the worst over? 

Officials in Beijing are nudging the economy forward again by spending on infrastructure. The GDP is already showing signs of recovery, Zeng said. Demand for cement and cars, including electric ones, is already up, she said. Officials are also relaxing last year’s tough stance on the tech industry, Zeng added.  

“Overall, we are seeing a better macro picture” this quarter, she said. “We think that for sure, [the economy] is going to recover but that the slope of the recovery is not going to be as good as what the market had expected back in the first quarter of this year.” 

Any future lockdowns will probably target neighborhoods rather than all of Shenzhen or Shanghai as the government did earlier this year, Zeng said. But she cautioned that China’s goal of 5.5% economic growth this year is “very ambitious.”

The government-run China Daily posted an investment bank editorial last week calling for 5.3% economic growth year on year from July through September, and 5.9% in the final months of 2022.
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Касаційний адміністративний суд у складі Верховного Суду підтвердив законність інспекційної перевірки, яка виявила численні порушення в діяльності менеджменту «Приватбанку» до 2016 року, заявляють у пресслужбі банку.

«За результатом саме цієї перевірки регулятор виявив численні порушення в діяльності менеджменту та колишніх власників ПриватБанку в період до 2016 р. та дійшов висновку про необхідність виведення банку з ринку як єдиної можливості врятувати його від банкрутства і зберегти фінансову стабільність в Україні», – йдеться у пресрелізі фінансової установи.

Суд задовольнив касаційну скаргу «Приватбанку» та відмовив у позові компанії, пов’язаній з колишніми власниками банку, про визнання протиправним та скасування розпорядження Нацбанку від 17.10.2016 щодо інспекційної перевірки.

«Це остаточне судове рішення по цій справі, що є важливою складовою частиною судової боротьби державного ПриватБанку з колишніми власниками щодо законності націоналізації банку. Ця перемога в суді підтверджує невпинну боротьбу банку за свої права і демонструє можливість дотримання верховенства права в Україні», – наголошують в «Приватбанку».

Уряд України 18 грудня 2016 року ухвалив рішення про націоналізацію «Приватбанку» і влив у його капітал понад 155 мільярдів гривень.

Ексвласники банку, його акціонери, найбільшими з яких на той момент були Ігор Коломойський і Геннадій Боголюбов, вважають проведену націоналізацію, внаслідок якої вони повністю втратили свої акції, незаконною, тоді як «Приватбанк» і держава вимагають від них додаткового відшкодування збитків.

Як заявили в НБУ, до націоналізації «Приватбанку» завдали збитків щонайменше на 5,5 мільярдів доларів. Коломойський назвав «маячнею» опубліковані Національним банком України дані.
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«КМУ не надав посадовим особам Нафтогазу дозволу виконати зобов’язання перед держателями євроблігацій», стверджують у компанії
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World economic growth is slowing and the prospects for a quick recovery are gloomy, the International Monetary Fund said Tuesday.

The IMF said it expects growth to slow from last year’s 6.1% advance across the globe to 3.2% this year, four-tenths of a percentage point lower than it forecast in April.

“A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize,” the IMF said. “Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while U.S. consumer spending undershot expectations.”

The Washington-based international finance agency said that “several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide – especially in the United States and major European economies – triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from [Russia’s] war in Ukraine.”

The IMF said the price of consumer goods, especially for food and energy, is increasing throughout the world. The cost is expected to rise by 6.6% in advanced economies this year and by 9.5% in emerging market and developing economies, with both figures up nearly a percentage point from the IMF’s earlier projection.

“The risks to the outlook are overwhelmingly tilted to the downside,” the IMF said.

It said the war in Ukraine “could lead to a sudden stop” of Russia’s export of natural gas to European countries and that “inflation could be harder to bring down than anticipated” if employers cannot find enough workers to meet their labor demands or inflation increases at a faster pace than expected.

The IMF said that a “plausible alternative scenario” to its already diminished forecast would be a world economy “in which risks materialize, inflation rises further, and global growth declines” to about 2.6% and 2% percent in 2022 and 2023, respectively, figures that would put growth in the bottom 10% of outcomes since 1970.

“With increasing prices continuing to squeeze living standards worldwide, taming inflation should be the first priority for policymakers,” the IMF said.

The IMF forecast came as policy makers at the U.S. central bank, the Federal Reserve, began two days of meetings in Washington with the expectation they will announce another three-quarters of a percentage point increase in the Fed’s benchmark percentage rate on Wednesday, an effort to curb rampant inflation in the U.S., the world’s biggest economy.

With June’s 9.1% year-over-year surge in consumer prices in the U.S. – the fastest pace in four decades – the Fed has already boosted its prime lending rate this year from near zero percent to 1.6% and expects to end 2022 at 3.4%.

Increases in the Fed’s interest rate reverberate through the U.S. economy, with higher borrowing costs for car loans and consumer goods. By making it costlier to borrow money, the Fed’s expectation is that consumers and businesses will cut their spending and thus help curb inflation.
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Сімсон зазначила, що розширення торгівлі електроенергією дозволить Україні отримати прибутки, а Євросоюзу – доступну електрику
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Кошти підуть на відновлення пошкодженої інфраструктури, надання комунальних, транспортних послуг, підготовку до опалювального сезону
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