S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

Reuters/File
Reuters/File
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Updated 05 April 2022

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

RIYADH: South Korea’s consumer prices rose at their fastest pace in more than a decade in March as the Ukraine war fueled surging energy and commodity costs, adding pressure to the central bank ahead of its rate decision meeting next week.

The consumer price index for March rose 4.1 percent from a year earlier, official data showed on Tuesday, the fastest increase since December 2011 and outpacing a 3.8 percent rise tipped in a Reuters poll. 

Core inflation, which excludes volatile food and energy costs, also jumped 2.9 percent from a year earlier, staying at the rate seen in February. The sustained rise in core prices shows surging fuel and raw materials costs are feeding through to consumers.

Japan’s household spending

Japan’s household spending rose for a second consecutive month year-on-year in February, helped by a flattering comparison with last year’s sharp pandemic-induced slump but the consumer sector is now facing growing headwinds from soaring prices.

Households cut spending from the previous month as pandemic curbs, rapid food and fuel price rises and the coronavirus kept wallets shut, casting a shadow over the world’s third-largest economy.

In a sign of trouble for consumer sentiment, real wage growth stagnated in February as global inflationary pressures weighed on household purchasing power.

“Prices will outpace wage gains from now on, so consumption will be on a sluggish trend,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Romania lifts interest rate 

Romania’s central bank lifted its benchmark interest rate by half a percentage point to 3 percent on Tuesday and said inflation would rise more than expected as fuel and food prices would outpace a government energy support scheme.

The bank raised its lending facility rate to 4 percent from 3.50 percent and its deposit rate to 2 percent from 1.5 percent, and said it would retain firm control over market liquidity.

All analysts polled by Reuters had expected Tuesday’s hike, with a median forecast for the benchmark rate at end-2022 at 4 percent.

Australia’s hike interest rate

Australia’s central bank on Tuesday opened the door to the first interest rate increase in more than a decade as it dropped a previous pledge to be “patient” on policy, a major surprise that sent the local dollar to nine-month highs.

Wrapping up its April policy meeting, the Reserve Bank of Australia kept its cash rate at 0.1 percent but noted inflation had picked up and was likely to rise further, while unemployment had fallen faster than expected to 4.0 percent.

“Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labor costs,” said RBA Gov. Philip Lowe in a statement.

Italy’s service sector 

Growth in Italy’s service sector slowed in March as the war in Ukraine weighed on demand, a survey showed on Tuesday, the latest sign of weakening momentum in the eurozone’s third-largest economy.

S&P Global’s Purchasing Managers’ Index Index for services fell to 52.1 in March from 52.8 in February, while remaining above the 50 mark that separates growth from contraction.

The reading beat the median forecast of 51.5 in a Reuters survey of 14 analysts.

The sub-index for new business in the service sector came in at 52.6 in March compared with 52.9 in February.

Growth in France

France’s services sector grew at a faster rate in March, a survey showed on Tuesday, although businesses’ confidence over the outlook weakened due to inflation and uncertainty caused by Russia’s invasion of Ukraine.

S&P Global said that while French business activity had benefited from the removal of COVID-19 health protocols in the country, its measure of business confidence had fallen to a 14-month low in March.

S&P Global said its purchasing managers index for services rose to 57.4 points in March from 55.5 in February — exactly in line with an earlier flash estimate.

Canada’s exports 

Canada’s exports rose 2.8 percent in February to a record high, driven mostly by energy products, while imports climbed 3.9 percent from the previous month, led by metals, data from Statistics Canada showed on Tuesday.

The country’s trade surplus with the world narrowed to C$2.66 billion ($2.14 billion), slightly below analyst forecasts of C$2.9 billion. But exports came in above expectations at C$58.75 billion, with imports also beating at C$56.08 billion.

Energy exports rose 7.8 percent to a record high, making up more than two-thirds of the total increase, while exports of non-energy products were up 1.2 percent. In volume terms, exports were up 0.6 percent.

US trade deficit 

The US trade deficit barely budged from a record high in February, suggesting that trade remained a drag on economic growth in the first quarter.

The Commerce Department said on Tuesday that the trade deficit dipped 0.1 percent to $89.2 billion in February. Data for December was revised to show a $89.2 billion shortfall, still an all-time high, instead of the previously reported $89.7 billion.

Economists polled by Reuters had forecast a $88.5 billion deficit. Trade has subtracted from gross domestic product growth for six straight quarters.


China launches $28bn loan facility to support manufacturers

China launches $28bn loan facility to support manufacturers
Updated 28 September 2022

China launches $28bn loan facility to support manufacturers

China launches $28bn loan facility to support manufacturers
  • Yuan ends at weakest since global financial crisis, hits record low

BEIJING, SHANGHAI: China’s central bank said on Wednesday it has set up a relending facility worth more than 200 billion yuan ($27.59 billion) to help manufacturers and other companies upgrade their equipment, as part of a push to revive flagging demand.

The People’s Bank of China said in a statement that it will provide low-cost funds to financial institutions and guide them to lend to firms to support such upgrades. The loans will be issued on a monthly basis, and the interest rate for qualified firms will be no higher than 3.2 percent from Sept. 1, 2022 to Dec. 31, 2022, the central bank added. China’s one-year loan prime rate is currently 3.65 percent.

The lending facility will support sectors including education, health, culture, tourism and sports, electric vehicle chargers, urban underground facilities, new infrastructure and industrial digital transformation, the central bank said.

The PBoC has increasingly relied on structural, or targeted policy tools, including low-cost loans, to support the slowing economy, as it faces limited room to cut interest rates for fear of fueling capital flight and inflation.

The PBoC has rolled out relending facilities to support the transport, logistics and storage sectors that have been hit hard by COVID-19, as well as carbon emission reduction, tech innovation and elderly care.

On Sept. 14, China’s Cabinet announced steps to support equipment upgrades by companies, extending a raft of measures to bolster the COVID-ravaged economy.

Onshore yuan

China’s onshore yuan extended losses on Wednesday to end the domestic session at its lowest level against the dollar since the global financial crisis of 2008, while the offshore yuan hit a record low, pressured by expectations of more US rate hikes.

Currency traders said the yuan was reacting to broad greenback strength in global markets as the dollar hit a fresh two-decade peak against a basket of currencies, buoyed by safe-haven demand and a hawkish Federal Reserve.

In onshore markets, the yuan finished the domestic trading session at 7.2458 per dollar, its weakest such close since January 2008 and down 658 pips or 0.91 percent from previous late night close of 7.18.

The offshore yuan followed suit and weakened 1.15 percent on the day to trade at 7.2635 around 0830 GMT.

Fuel export

China may tweak a proposed sharp increase in refined fuel export quotas for this year by extending the plan into next year, as it weighs the benefits to the economy of higher exports against low domestic stocks and operational challenges, four sources told Reuters.

However, the four sources with direct knowledge of the matter — and three others — said the government was still reviewing the matter.

The market has been widely expecting China to release a fifth batch of fuel export quota of up to 15 million tons for the rest of the year, which would be its largest so far in 2022 and lift China’s sagging exports.

The proposal from refiners’ planning departments, following a government call to boost trade, has led some refiners to ready an increase in output to take advantage of the quota.


Consultancy agreement signed to launch Jordanian-Iraqi economic city

Consultancy agreement signed to launch Jordanian-Iraqi economic city
Updated 28 September 2022

Consultancy agreement signed to launch Jordanian-Iraqi economic city

Consultancy agreement signed to launch Jordanian-Iraqi economic city
  • Industries on the site will benefit from free trade agreements and have access to over 1bn consumers without customs restrictions

AMMAN: The Jordanian-Iraqi Industry Company and the Coalition for Engineering Consultancy have signed a contract for the provision of services for a Jordanian-Iraqi border economic city project, Jordan News Agency reported.

The engineering consultancy firm will be involved in all stages of finding a developer to carry out the project, including the creation of tender documents, according to the agreement. 

Following the signing ceremony, the company, which is owned by Jordan and Iraq, announced the start of administrative and procedural steps for the project. 

The economic city will strengthen Jordanian-Iraqi business cooperation, and spur development in western Iraq and eastern Jordan. 

The company said in a statement that industries operating in the economic city will benefit from free trade agreements signed by Jordan with many countries, and have access to more than 1 billion consumers without technical or customs restrictions.

It added that the project “constitutes an opportunity to build Jordanian-Iraqi economic integration in many fields, especially industrial ones.”

The joint economic city will be built on the Jordan-Iraq border, with both countries making land available for construction.

 


Bahrain-based Eat App raises $11m in a series B funding

Bahrain-based Eat App raises $11m in a series B funding
Updated 28 September 2022

Bahrain-based Eat App raises $11m in a series B funding

Bahrain-based Eat App raises $11m in a series B funding

RIYADH: Bahrain-based restaurant reservation platform, Eat App, raised $11 million in a series B funding round.

The funding round included venture capital firms MEVP, 500 Startups, Derayah VC, Dalah Albaraka, Ali Zaid Al-Quraishi and Brothers, and Rasameel Investment Company.

The firm seeks expand globally and invest in product development to support restaurants and guest experience.

“Looking back, the pandemic impacted Eat App greatly. While it caused a drop in revenue, it was also one of the largest accelerators of the business, as restaurants were forced to implement digital tools,” Nezar Kadhem, co-founder and CEO of Eat App, said in a statement.

Founded in 2015, Eat App currently operates in Bahrain, Dubai, Abu Dhabi, and Doha, with more than 800 restaurants on its platform.


Aramco’s Wa’ed Ventures leads French AI firm Alteia’s funding round

Aramco’s Wa’ed Ventures leads French AI firm Alteia’s funding round
Updated 28 September 2022

Aramco’s Wa’ed Ventures leads French AI firm Alteia’s funding round

Aramco’s Wa’ed Ventures leads French AI firm Alteia’s funding round

RIYADH: Alteia, a European artificial intelligence and industrial software company, announced that it closed its latest funding round led by Wa’ed Ventures, Saudi Aramco’s venture capital arm.

Alteia will utilize its funding to increase its presence in the Kingdom by opening an office in Dhahran to support companies in the region as well as invest in research and development.

“To have the world’s leading energy company invest in Alteia through its investment arm is a strong show of faith in our trajectory, and weighs in the value of contextualized, actionable visual data as the foundation to shape a more efficient, more sustainable industrial future,” Benjamin Benharrosh, co-founder of Alteia, said in a statement.


Egypt B2B marketplace Mazaya raises $5m in pre-seed round

Egypt B2B marketplace Mazaya raises $5m in pre-seed round
Updated 28 September 2022

Egypt B2B marketplace Mazaya raises $5m in pre-seed round

Egypt B2B marketplace Mazaya raises $5m in pre-seed round

RIYADH: Mazaya, an Egypt-based B2B e-commerce marketplace, raised $5 million in a pre-seed round, said a statement issued on Tuesday.

The funding round was led by financial investment firm Raya Trade and Distribution, it added.

The company will use the funds to boost its operation in Egypt as well as expand into new markets and other verticals.

“The funds raised will allow us to quickly scale our operations and expand to other markets beyond Egypt, we have plans to launch our services in Nigeria before this year-end,” Amir Aboul Fotouh, Mazaya co-founder, said.

The Mazaya App provides retailers and merchants of electronic goods and home appliances the ability to procure inventory for their stores from all major brands.

“The platform conveniently supports merchants, particularly small merchants who do not receive adequate services, with the ability to scale their business through a superior level of service and a wide range of electronic devices from all international and local brands at the click of a button,” Bassem Megahed, CEO of Raya Trade and Distribution, said in a statement.

The company also plans to offer financial services and support to their retailers by offering credit facilities and flexible payment options.