“The impossible choice facing central banks…
“…central banks are not going to be able to control inflation without inflicting considerable pain on the economy. Keeping inflation at 2pc might require interest rates so high that it creates a kind of perma-recession.”
“Fed searches for elusive soft landing.
“The critical question is whether the Fed can engineer a soft-landing, reducing inflation to its target of a little more than 2% from its current rate of 7% without pushing the economy into recession… soft landings have previously proved hard to achieve.”
https://www.reuters.com/markets/us/fed-searches-elusive-soft-landing-2022-02-02/
“America’s national debt surpasses $30 trillion for the first time…
“Government borrowing accelerated during the Covid-19 pandemic as Washington spent aggressively to cushion the economic blow from the crisis. The national debt has surged by about $7 trillion since the end of 2019.”
https://edition.cnn.com/2022/02/01/economy/national-debt-30-trillion/index.html
“Ireland’s monster €237bn debt: it hasn’t gone away…
“…it’s a ball and chain that we’ll be carrying into the future, swallowing valuable resources that could be used for a myriad of other pressing problems. Servicing it has cost us €60 billion over the past decade…”
“UK interest rate rise predicted as cost of living crisis deepens…
“Britons are braced for the Bank of England to increase interest rates on Thursday as the central bank seeks to tackle price pressures that have pushed annual inflation to a 30-year high of 5.4%.”
“Inflation in the euro zone surprised markets Wednesday, notching a new record high and piling yet more pressure on the European Central Bank to act.
“The cost of living for the 16 nations that share the euro currency rose to 5.1% in January, despite expectations for a sharp drop to 4.4%. December’s figure had come in at 5.0%.”
https://www.cnbc.com/2022/02/02/euro-zone-inflation-hits-new-record-piling-pressure-on-the-ecb.html
“Belarus bans transit of oil products, fertilisers from Lithuania…
“The tit-for-tat measures highlight the ongoing standoff between Belarus, which is backed by its neighbour Russia, and the West. Poland’s largest refiner PKN Orlen stands ready to redirect exports from its Lithuanian refinery to go through Poland instead of Belarus.”
“Russia has condemned a US decision to send extra troops to Europe to support its Nato allies amid continuing fears of a Russian invasion of Ukraine.
“Moscow said it was a “destructive” step which heightened tension and reduced the scope for a political solution.”
https://www.bbc.co.uk/news/world-europe-60238869
“Borrowing market nerves see lowest EM debt issuance since 2016.
“Government debt issuance in emerging markets was the lowest for any January since 2016, bankers have estimated, as the typically busy month faced nerves about both rising global interest rates and volatile geopolitics… “Net issuance” in 2022 is expected to be only 44% of the 2020 amounts.”
“Brazil to bid goodbye to single-digit interest rates…
“Brazil’s central bank is expected to lift the benchmark interest rate above 10% for the first time in nearly five years, and perhaps signal that it’s ready to start moderating the world’s most aggressive monetary tightening campaign.”
“Chile Signals Tax Rise to Cope With Growing ‘Social Pressures’…
“Chile’s government will need to raise revenue to cope with growing “social pressures,” according to one of the nation’s top economic policy makers… “In the future we think we will require more fiscal revenue,” Finance Minister Rodrigo Cerda, 48, who is leaving office shortly, said in a Bloomberg TV interview.”
“Argentina has been plunged into a fresh crisis after a crucial figure in the ruling Peronist coalition resigned on Monday in protest at the country’s outline deal with the IMF to restructure $44.5bn of debt.
“With the ink barely dry on Friday’s debt agreement, Máximo Kirchner announced he was quitting…”
https://www.ft.com/content/400d765b-e838-494b-822e-70cd1958a2c7
“South Africa’s state-owned power utility is resuming power cuts to prevent a total collapse of the grid as its coal-fired plants remain prone to breakdowns.
“Africa’s most-industrialized nation will undergo electricity rationing into next week, following last year’s record 1,150 hours of outages.”
““Zambia aims for IMF debt deal in May…
““I have to be optimistic, because in the absence of optimism where can Zambia go?” Finance Minister, Situmbeko Musokotwane told Reuters in an interview on Tuesday… In 2020, Zambia became the first pandemic-era sovereign default and it is buckling under a debt burden of more than 120% of GDP.”
https://www.cnbcafrica.com/2022/zambia-aims-for-imf-debt-deal-in-may-finmin/
“Hunger crisis looms in Nigeria’s ‘food basket’ amid conflict.
“Violence in northwestern Nigeria between farmers and herders over access to water and land has put food production at risk in Africa’s most populous nation… More than 1 million farmers in the state have been displaced because of the intercommunal violence between herders and farmers competing for water and land.”
“Mali Defaults on Domestic Debt After Economic Bloc’s Sanctions…
“Mali missed payments totaling about $31.6 million on its domestic debt after West Africa’s economic bloc imposed sanctions on the country following last year’s coup. Mali was unable to make coupon payments totaling 2.7 billion CFA francs ($4.65 million) due Jan. 28…”
“Morocco Aims to Import Chilled Gas Via Spain After Algeria Snub…
“The move comes after Algeria halted gas flows through the Maghreb-Europe pipeline, which runs to Spain via Morocco, amid a diplomatic spat between the two North African nations.”
“Algeria’s recurring food crises: The sign of an ailing economy…
“Beset by severe socioeconomic grievances, Algeria is now facing the most challenging economic situation since the 1988 October Riots, when thousands of young people took to the streets to protest…”
https://www.mei.edu/publications/algerias-recurring-food-crises-sign-ailing-economy
“Tunisia: President Saied acknowledges salary crisis after unions protest delays.
“Tunisian President Kais Saied on Tuesday demanded his government to pay salaries of civil servants on time, in the first acknowledgment of the late salaries crisis in the country.”
https://www.middleeasteye.net/news/tunisia-salary-crisis-saied-acknowledges-unions-threaten-protests
“Egypt eyes bread subsidy overhaul as global inflation bites.
“Egypt is considering replacing a popular bread subsidy with cash payments for the poor to protect the budget from soaring global wheat prices, but domestic inflation and a history of protests could make the government opt for a less ambitious reform.”
“General strike paralyzes Lebanon, amid economic crisis…
“Protesters blocked a number of main roads with burning tires in Beirut, the state news agency reported. Bus drivers also closed the road linking the northern city of Tripoli to Beirut, demanding the government to address the country’s economic crisis.”
https://www.yenisafak.com/en/world/general-strike-paralyzes-lebanon-amid-economic-crisis-3588809
“Turkey’s annual inflation soared to a 20-year high of 48.69% in January, data showed on Thursday, fuelled by President Tayyip Erdogan’s push for unorthodox interest rate cuts and a resulting crash in the currency late last year.
“Consumer prices jumped11.1% from the previous month, the Turkish Statistical Institute said, eating deeply into Turks’ earnings.”
https://www.reuters.com/markets/currencies/turkeys-inflation-surges-two-decade-high-487-2022-02-03/
“Turkey going through partial famine, warns farmers’ confederation founder…
““Turkey is going through a partial famine just now because it’s not a self-sufficient country. If the farmers and production are not supported and a sufficient amount of fertiliser is not stockpiled, it will go through much more severe problems.””
https://medyanews.net/turkey-going-through-partial-famine-warns-farmers-confederation-founder/
“Iran Gas Crunch Forces Mideast Buyers to Seek Alternative Supply.
“Iran’s tight gas market is reverberating across the Middle East, as a drop in its exports forces key customers Iraq and Turkey to seek alternative supplies and curb electricity output.”
“‘End game’: Iran nuclear talks nearing resolution or nuclear crisis, US warns…
“Iran is now a matter of weeks away from having enough fissile material to build a nuclear bomb… That puts the pressure on this new round of talks to reach a conclusion before time runs out.”
“Indian stocks suffer worst foreign outflows since global financial crisis.
“Foreign selling of Indian equities has reached the highest level since the global financial crisis, batting down valuations of top stocks as Narendra Modi’s government plans to use the listing of a state-run insurer to plug holes in the national budget.”
https://www.ft.com/content/86010e24-5345-4cff-a9bd-52558a831d98
“Sri Lanka seeks IMF advice amid worsening crisis.
“Colombo imposed a broad import ban to try to save foreign currency, and the island nation of 22 million has since seen shortages of food and fuel as well as electricity rationing, while rating agencies warn it might not be able to make payments on its $35 billion foreign debt.”
https://www.france24.com/en/live-news/20220202-sri-lanka-seeks-imf-advice-amid-worsening-crisis
“Over a Million Flee as Afghanistan’s Economy Collapses…
“…Afghanistan has plunged into an economic crisis that has pushed millions already living hand-to-mouth over the edge. Incomes have vanished, life-threatening hunger has become widespread and badly needed aid has been stymied by Western sanctions…”
https://www.nytimes.com/2022/02/02/world/asia/afghanistan-migration-refugees.html
“Companies raise over half a trillion dollars of debt in record Jan – Refinitiv.
“A record amount of more than half a trillion dollars of debt was raised in January by companies as issuers scrambled to take advantage of attractive funding conditions before global central banks led by the U.S. Federal Reserve begin a tightening cycle.”
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread (a little later than usual, as the Panopti-dog must visit the vet).
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