” If you have more trade barriers, it could lead to the reshuffling of global areas,” said Kimberly Crewther, senior director of the official figure Dairy Companies Association of New Zealand. The cheese industry’s top exporter in the world is New Zealand, which also serves as a hub for foreignContinue Reading
It was a triple whammy for economic data lovers.
The Bureau of Labor Statistics released its most recent inflation figures on June 12, 2024, day. The announcement was fairly good, showing that prices rose 3.3 % in the year to May 2024– less than some economists had expected.
The Federal Reserve held interest rates steady as forecasters had anticipated and released an updated set of financial projections as the conference came to a close, a few hours later.
What does it all mean? Economicist Christopher Decker was asked to explain by The Conversation US.
What are the main conclusions drawn from the most recent inflation review?
The May prices price– as measured by the Consumer Price Index for All Urban Consumers, or CPI- U – was down a little from April, but not by much. Generally, this implies that not much changed on the prices before, and it’s been like this for a while today.
This is n’t a bad thing, though. I prefer to view inflation in the long run: it has actually stabilized around 3.3 %. In fact, we’ve been around 3 % to 3.7 % for 12 months now. So we also have income and job growth as well as stable price rise, even if it is higher than the Fed’s target level of 2 %. The state of the economy is still powerful.
In terms of the details, power prices are down compared with previous month– but electricity prices tend to be dangerous, but that might be a speck in the data, not a true trend. The labour markets are also constrained. In May, average weekly earnings increased by 4.1 % over the same period last year, indicating that businesses must pay higher wages to attract and keep new hires.
In May, prices- adjusted profits increased 0.5 % from April to May of this year. Consumer spending, which accounts for two-thirds of the British gross domestic product, will likely increase as income outpace inflation. Payments increased by 272, 000 in May, away from 165, 000 and 310, 000 in April and March, both.
In brief, this statement, along with other new information reports, continues to show a very robust and stable economy.
Why has inflation stayed above the Federal Reserve’s 2 % goal for so long?
Accommodation costs and prices are the main causes of the inflation’s continued upwards of 2 %. Higher construction and maintenance fees, as well as a strong demand from people who are priced out of ownership, are driving rental prices upwards. House prices and mortgage rates remain high, making household purchases difficult, especially for primary- day homebuyers.
The Fed maintained interest rates today and indicated it may probably cut rates once more in 2024. However, politicians were considering three price cuts this year just three months ago. What changed?
The Fed is quite data- driven, and when the information changes, the Fed changes program.
Since March 2022, the Fed has raised costs more than ten days. This was done in an effort to halt economic expansion and thus halt prices. I believe that many policymakers believed that may cause the inflation rate to fall more quickly than it did. Instead, employment growth remained stronger than expected.
In many ways, the labour market is also working through Covid- related problems. Some workers slowly reentered the workplace. Thus, production was enhance to meet demand for goods and services. This meant that even with significantly higher inflation, there was room for the economy to grow.
Additionally, the U.S. experienced offer problems unlike anyone in recent memory. We’re likely also dealing with a few remaining effects around, as well. Higher prices helped, however, decrease prices down by not 2 % as a result.
Presently, time will tell if we are at a fresh standard. The Fed clearly does n’t think so. It’s still holding fast to 2 % prices. We might see some higher wage rises than pre-Covid costs if the labour market does seem to be returning to where it is right now. As businesses try to maintain profit profits while covering higher labour costs, this could lead to significantly higher inflation rates.
Why do so many Americans have mixed feelings about the market if inflation is steady and wages have increased?
People tend to compare the prices they paid years ago, in my opinion, because they do n’t care so much about month-to-month inflation as much. For example, the average cost of a few eggs is about US$ 2.70 now, whereas before Covid it was$ 1.46 or so. People remember that and feeling ripped off because they forgot that egg were$ 4.82 in the beginning of 2023 and have generally decreased since.
What do you anticipate happening throughout the year?
Even if the Fed’s 2 % inflation target is left out, the current macroeconomic data does n’t really suggest that we need to change interest rates. Economic growth is n’t slowing dramatically, so cutting rates is n’t necessary. And inflation is n’t accelerating, so increasing rates is n’t justified.
Holding prices continuous is currently the most prudent course of action for some potential homebuyers, as difficult as that may be.
What do you anticipate happening over the long term?
I was checking out the most recent “dot plot” from the Fed, which shows where each of the voting officials anticipates standard interest rates to end in 2024, 2025, and 2026.
The majority of officials believe that the federal funds rate, which is currently at 5.3 %, will stay at this level for the remainder of the year before dropping a little above 4 % in 2025. Most then believe it will accomplish 3.25 % or so by 2026. So they are betting on the need for price reductions in 2025 and 2026.
For me, this makes feeling, without a doubt, in 2025. Both the market and the employment industry are showing signs of sluggishness. Anticipate any moves toward price cuts to be continuous, though. A gradual lowering of the Fed’s policy is a good bet as long as there are n’t any significant increases in the key job and inflation data.
Christopher Decker is Professor of Economics, University of Nebraska Omaha
This content was republished from The Conversation under a Creative Commons license. Read the original post.
According to two sources with knowledge of the situation, Singapore’s Temasek Holdings is close to closing the deal with Shell regarding the sale of some assets from liquefied natural gas ( LNG ) trading company, which is scheduled to close in the coming days. Shell, the best LNG investor inContinue Reading
The first edition of the” Practical Guide on Venture Capital and Private Equity in Malaysia” ( Guide ) was released by the Securities Commission Malaysia (SC ) today and is now available for download.
This guide will help prospective venture capital (VC ) and private equity ( PE ) fund managers, service providers, and investors navigate Malaysia’s restrictive VC and PE operations ‘ policy landscape.
The Practical Guide on VC and PE in Malaysia, according to Dr. Awang Adek Hussin, the president of the SC, is “our commitment to creating a conducive environment for funding and innovation. We want to create a more vibrant group of professional traders to assist entrepreneurs in Malaysia by providing quality on the business landscape for VC and PE firms.
The Indonesian capital market’s alternative financing ecosystem includes both VC and PE. In order to foster promising startups and higher growth enterprises, VC and PE firms are crucial in fostering opportunities for local talent, innovation, and contribute to the expansion of the Indonesian economy.
The Guide’s main topics include information on local money market rules affecting the VC and PE industries, foreign trade policy, tax issues, fund organizing considerations, and other areas crucial to fund operations.
The SC’s efforts to promote a more powerful private business sector are reflected in the publication of the Guide in accordance with the Capital Market Masterplan 3. It will strengthen the capacity of professional fund managers and foster a more active investor base that can support investments into startups and micro, small, and medium-sized ( MSMEs ) with high growth.
This initiative is in line with the SC’s wider efforts to expand market-based financing options for MSMEs and mid-tier companies ( MTCs ).
The Guide also supports the regional KL20 plan, which seeks to establish Malaysia as a leading company ecosystem on a global scale.
SEUL: Denmark’s food agency has recalled North Korean instant ramen from a popular West Indian brand, cautioning noodle lovers that the warm noodle soup might lead to “acute poisoning.” The Danish Veterinary and Food Administration released a statement on Tuesday ( Jun 11 ) stating that three Samyang Foods noodlesContinue Reading
SINGAPORE: DBS Group plans to boost assets under management for its wealth business to S$ 500 billion ( US$ 369.7 billion ) by the end of 2026, said the unit’s head, as the top Singaporean bank bets on robust inflows into the country. Singapore’s benefit from strong inflows of moneyContinue Reading
Tokyo: On Wednesday ( Jun 12 ), the government of Japan passed legislation to require tech giants like Google and Apple to grant access to third-party mobile applications and payment systems in order to avoid paying significant fines. Similar to the new Digital Markets Act of the European Union, theContinue Reading
Following an anti-subsidies investigation, the European Union threatened on Wednesday ( Jun 12 ) to impose additional tariffs of up to 38 % starting next month on Chinese electric car imports, which could lead to a trade war. By launching the investigation last year in a bid to protect WesternContinue Reading
Without funding from Japan, many of Australia’s gas projects would n’t have gone ahead. Australia’s now-expensive fossil gas industry is being supported by large open loans from Japanese taxpayers. Japan is even gaining more business in the oil industry, and it exports more oil than it imports from Australia.
Japan is emerging as a fossil fuel hold as the earth transitions swiftly toward a clean energy potential. The world’s fifth- biggest market, Japan has long been dependent on foreign resources of fossil fuels. Japan has focused on fuel while China has filled its plains with solar fields.
These initiatives impede Australia’s ability to meet its climate targets and reverse the transition to clean electricity industries. These exporting industries are being impacted by new gas projects that threaten to deflect funding and workforce.
But this can alter. The government’s Coming Made in Australia policies include a significant investment in clean energy, green manufacturing, and natural exports, which could lead to a long-lasting partnership between the two countries.
Establishing new clean energy collaborations with energy-hungry Asian countries like Japan, China, and South Korea was increase climate assistance, foster fresh clean energy imports, and encourage investment.
Worried about energy security, Japan is subsidizing new offshore gas projects in Australia which probably would n’t go ahead otherwise.
The largest producer of foreign public funds for fuel production in the world is Japan. Japan has maintained the flow of the funds despite various countries ‘ commitments, including Australia, to stop global fossil fuel financing.
For example, last month, the Japan Bank for International Cooperation provided Australia’s biggest gas corporation, Woodside, with A$ 1.5 billion ( US$ 992 million ) in loans to develop the Scarborough gas field offshore from Western Australia.
Japanese power utility JERA also received A$ 1.2billion ( US$ 794 million ) from the Japanese bank to acquire a 15 % stake in the project, gaining rights to a share of the liquefied natural gas ( LNG ) produced.
New oil projects would be more unlikely to continue without this kind of funding.
Another sponsors are unlikely to intervene, it is suspected. According to remoteness and higher operating costs, oil production in Australia is comparatively cheap. Over the past ten years, American gas projects have generally been delivered late and over budget, giving investors poor returns.
American gas projects will fight to deliver gas at prices that are competitive with those that are expected in the future. In 2022, Russia’s invasion of Ukraine triggered a surge in demand for LNG. The world is currently dealing with a significant glut of oil.
In two years, significant new Gas volumes will be available from Middle Eastern, primarily Qatar, and North America, at the same time as oil demand declines in important markets. According to the American government’s personal analysis, the cost of producing LNG from these producers is significantly lower than the cost of producing it in Australia.
If we left it up to the business, Australia’s extremely weak gas imports would gain market share. But it’s not being left up to the business. To appear practical, Japan is underwriting fresh oil projects in order to make money-losing tasks seem attractive. And that makes it much more difficult for Australia to transition to a rewarding alternative business.
Yamagami Shingo, the embassy to Japan, claimed last year that American gas exports were essential to keeping Tokyo’s neon lights glowing.
In fact, Japan is then reselling more Gas to other Asian countries than it imports from Australia. Over the next ten years, Chinese gas companies have agreements to purchase more than Japan will use domestically, and they intend to sell the excess oil in other Asian markets.
This is a direct result of official policy, which supports Asian firms in supplying that need by providing financial support for oil transfer stations and gas-fired power vegetation and offering financial help for those that are in need of Southeast Asia.
This is not hidden. It’s an empty purpose. The Chinese government wants its companies to “handle” 100 million kilograms of LNG annually by 2030, which is far more than Japan will need to satisfy its energy needs.
Why? Maintaining impact in the region’s LNG market is crucial to Japan’s government’s individual energy security.
The oil market has attempted to portray gas as being more eco-friendly than fuel or as a transition fuel. In truth, oil is a risky fossil fuel. It’s generally gas, 80 times more potent in heating the earth than carbon monoxide. Since the Industrial Revolution, metal has added almost a third ( 30 % ) of the extra heat building up.
Meg O’Neill, the head of Woodside, claims that American gas exports” you help Asia decarbonize by replacing coal.” However, fuel has a higher carbon footprint than coal. Leaks of metal are quite prevalent throughout the fuel supply chain. For pollution to be on par with fuel and gas, you just need a very small leakage.
Japan’s personal power grid is green while it purchases and sells Asian gas. The government then plans to double the part of biofuels– rising from 18 % of energy generation in 2019 to 37 % by 2030 – while gasoline- fired power drops.
Japan’s need for oil at home is now falling. It fell 18 % in the generation to 2022. In 2023 only, demand for oil fell by 8 %.
By reducing its reliance on imported oil, switching to renewable electricity would increase Japan’s energy security even further. By 2035, according to recent research, Japan may have a 90 % clean power system.
In the five times to 2017, Australia’s gas market grew considerably. By 2019 Australia became the country’s largest LNG supplier. This is amazing given how isolated and comparatively little Australia’s oil reserves are, according to an analysis from the Institute for Energy Economics and Financial Analysis.
Australia’s transition to a fossil fuel giant was aided by foreign incentives, including Japan’s money. However, these subsidies wo n’t long serve our needs. The government wants to grow the green sectors for the future by continuing to permit discounted investment in new fuel projects, which divert investment, workplace, and supply chain capacity apart from these projects.
This does n’t mean turning our back on Japan. Japan has a great need for electricity. However, it may obtain it without using fossil fuels. Japan and Australia could work together to provide crucial minerals and green metals for batteries and renewable energy, clean ammonia for fertilizers and industries, and green gas for transportation and business.
Acknowledgments: Ben McLeod ( Quantitative analyst, Climate Council ) and Josh Runciman ( Lead analyst, Australian Gas, IEEFA ) provided data used in the article.
Wesley Morgan is Research Fellow, Griffith Asia Institute, Griffith University
The Conversation has republished this post under a Creative Commons license. Read the original post.
Bangladesh has proposed a contractionary funds in the legislature for the macroeconomic time 2024-25 starting July 1, 2024 in the face of unflinching global economic conditions and a significant dollar absence.  ,
Additionally, it anticipates being heavily rely on foreign debt for development projects and to borrow heavily from the finance industry.
The budget was put in place on June 6 by Bangladesh’s finance minister, Abul Hassan Mahmood Ali, who had been widely criticized for having no effective strategies to lower inflation, which had been at a high rate of 10 % for more than a year, causing severe pain for lower-mid-income groups of people as the condition deteriorated since the end of the war in Ukraine.
Only a few weeks after the local currency experienced a sizable depreciation against the US Dollar following the introduction of a” crawling peg” system to determine the exchange rate, the BDT7.97 trillion ($ 68 billion ) budget was agreed. This was in line with the International Monetary Fund’s ( IMF)’s ) recommendation to stop foreign currency reserves from falling as they were free.
Currently Bangladesh has just$ 18.6 billion of foreign currency reserves, according to the IMF’s computation method. However, the online trading supply now stands somewhat over$ 13 billion, hardly enough to cover three weeks’ of goods.
The government was forced by the paltry forex reserve to substantially reduce imports over the past few years, which negatively impacted business outputs and increased inflation.
Progress target ,
For the next fiscal year, the finances has proposed a 6.75 % fiscal progress, which economists and economists predict is not possible. The government has predicted 5.8 % growth at the end of the fiscal year while its initial growth goal was 7.5 %.
The government has also set a goal to reduce the current rate of nearly 10 % to 6.5 % in the upcoming fiscal year. The federal has planned to lower import duties on big, important commodities in order to achieve the target. The finance minister, a moment after presenting the budget to parliament, at a article- budget media briefing, but said, people will have to wait until next December to get the rate of inflation down to a” reasonable limit”.  ,  ,  ,
However, the economists ruled out the possibility of sluggish prices because they believe a duty cut on commodities alone would not be effective in lowering prices. Moreover, they believe the government, in the funds, has announced to change energy oil prices four times a month to reduce rebate spending, fuel prices will go further up in the coming days leading to the further escalation of inflation. A rise in fuel prices always leads to higher prices for other goods and services.
The finance minister’s proposed budget has a deficit of BDT 2.56 trillion, which accounts for 4.6 % of the nation’s gross domestic product ( GDP ). The finance minister wants to use domestic and foreign borrowing to pay off the deficit. Of the total, some BDT1.61 trillion will be borrowed from domestic sources of which BDT1.375 trillion will come from the banking sector.
Non- performing loans
Already Bangladesh’s banking sector is plagued with non- performing loans worth BDT1.82 trillion, the highest in the history of Bangladesh. Additionally, billions of taka are encased in the courts as loan defaulters are sued by banks.  ,
Five banks with poor financial health are set to merge with five relatively strong banks to avoid closure, in another sign of trouble. Exim Bank would acquire Padma Bank, Sonali Bank would acquire Bangladesh Development Bank, Bangladesh Krishi Bank would acquire Rajshahi Krishi Unnayan Bank, National Bank would buy United Commercial Bank, and City Bank is set to acquire BASIC Bank in accordance with potential merger plans, while City Bank is set to acquire BASIC Bank.
To support development projects, the government has set a goal of borrowing BDT970 billion from abroad in the upcoming fiscal year. With external debt already exceeding$ 100 billion in March, the target is viewed as very high. As the conflict in Ukraine continues, the world economy struggles, and Bangladesh is failing to permit the repatriation of profit by foreign investors due to its severe dollar dearth, economists fear that foreign direct investment will decline in the new fiscal year.  ,  ,  ,
Businesses believe that excessive government borrowing will dry up resources, which means that the private sector may not be able to grow their businesses. Employment generation will also be hindered severely, with the rate of unemployment increasing.
” The excessive borrowing by the government from the banking sector hinders the credit flow to the private sector”, Mahbubul Alam, president, Federation of Bangladesh Chambers of Commerce and Industry ( FBCCI), said in a reaction.
There is no directive in the proposed budget on how to help maintain local industry, especially given the country’s rising cost of doing business, according to Anwar Ul Alam Chowdhury, president of the Bangladesh Chamber of Industries (BCI).
The leading think tank, the country’s Centre for Policy Dialogue, claimed that the government did not take into account the impact of the proposed budget’s ongoing macroeconomic policy adjustments.
” The inflation projection for FY 2025 certainly appears to be overambitious”, the CPD said.
Dr. Salehuddin Ahmed, a former governor of Bangladesh’s central bank said, the proposed budget will fail to meet various targets as it does n’t have enough “bold steps”.
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