Government & Agencies

Flying PIIGS nations stir rethink in Europe’s core

12 Aug 2024

Former crisis economies like Spain, Greece and Italy have outpaced France and Germany by up to 20% since the pandemic. Lower exposure to manufacturing, a tourism boom and Brussels funds all helped. The role reversal may push Berlin to tolerate looser fiscal and monetary policy.

Putin’s hostage deal is chilling for C-suites

9 Aug 2024

The exchange of 24 prisoners between Russia and the West marked the first time a convicted murderer was swapped for journalists or dissidents jailed to serve as barter currency. If these practices become a habit, businesses will have to rethink where they deploy staff.

UK financial watchdog’s H2O thwack has a downside

8 Aug 2024

The fund group will repay 250 mln euros after the FCA said it bought esoteric bonds and didn’t declare conflicts. The deal gets money to investors quicker than if a fine had been levied. But, at just a fraction of what some clients are claiming, the settlement risks looking soft.

UK riots present ‘gilet jaune’ threat to Starmer

8 Aug 2024

Britain’s anti-immigration riots pose a big challenge to new PM Keir Starmer. Spending his limited budget on prisons and police is his best hope of avoiding future violence. If he fails like France’s Emmanuel Macron did with anti-tax protesters, his premiership may never recover.

US election crimps fixes for energy, weed and more

6 Aug 2024

Presidential contests can bury unglamorous issues in dire need of attention. Take power lines: legislation awaits to help the huge queue of energy projects, equal to more than doubling US capacity, hook up to the grid. Despite broad agreement, the election cycle stymies progress.

Thames Water fix is a stretch, but possible

6 Aug 2024

The indebted UK utility’s struggles to raise the 3 bln pounds it needs imply impending doom. But while the details are tricky, there remains scope for the UK to offer guarantees or find a way to haircut creditors. A new investor armed with these could yet make a decent return.

Bangladesh becomes global firms’ next big unknown

6 Aug 2024

Protests may ease now Prime Minister Sheikh Hasina has fled. But her ouster after 15 years of iron-fist rule leaves the economically struggling country of 170 mln vulnerable. Companies like H&M and Inditex that depend on it for garment-making face an anxious time ahead.

Airlines’ margins head to lower cruising altitude

2 Aug 2024

Carriers from $2 bln Air France-KLM to $7 bln Lufthansa reported healthy demand in the first half of 2024. But earnings are falling as expenses bite. With the switch to sustainable aviation fuel threatening to push costs ever higher, investors are bracing for smaller margins.

Oil is an imperfect gauge of Middle East risk

31 Jul 2024

Brent crude prices rose 2.5% after senior Hezbollah and Hamas leaders died in strikes blamed on Israel. Oil traders have grounds to see the danger of a wider war as limited, but automated trading may increasingly act to muffle any concerns. It’s hard to tell which is right.

China looks to the little guy for spending boost

31 Jul 2024

Beijing wants to raise wages for low- and middle-income groups to lift consumption. Combined with higher taxes on the wealthy, that's wise. Yet those policies are unlikely to deliver immediate growth. Officials will have to lean on fiscal expansion to hit their GDP target.

UK’s half-empty fiscal glass is slowly filling up

30 Jul 2024

Finance minister Rachel Reeves announced public spending cuts to fill a 22 bln pound hole left by the old government and raise pay for teachers and doctors. She will also need to hike taxes. But a better financial picture in future years tempers her gloomy narrative.

India’s water stress is a growing sovereign risk

29 Jul 2024

Erratic rainfall is one reason the country's economic growth may slow to 7% this year. Too much and too little H2O affects everything, from cities to power plants to farming. Climate change coupled with weak state capacity is making it worse. Yet it's an underappreciated problem.

Paris Olympics warrant medal for budget restraint

26 Jul 2024

The French capital has forked out $9 bln on the Games, but compared to some previous hosts the cost overruns have not been excessive. Pre-existing infrastructure helped. Given France’s political ructions and high deficits and debt, such relative sangfroid is well timed.

Donald Trump may dent but not dethrone King Dollar

26 Jul 2024

The US currency’s long-predicted demise has so far failed to materialise. The former president’s possible return to the White House is a reason to reconsider. While the greenback remains unassailable as the de facto global standard, its days of cyclical strength may be numbered.

India wants to be China’s gateway to the West

26 Jul 2024

Rather than integrate into its neighbour’s supply chain, the South Asian country wants to court Chinese investment. Its annual economic survey lays out a way for firms from Shein to BYD to keep selling in Western markets. A lot rides on how the Sino-American trade war plays out.

China’s slump hints at a unique liquidity trap

25 Jul 2024

Record money supply has failed to revive growth. As the impact of monetary loosening fades, Beijing is ready to spend on welfare to encourage savers to consume. Inspiring the private sector to invest in a ‘socialist market economy’ is a trickier part of the problem to solve.

China stocks’ ‘policy put’ is breaking down

24 Jul 2024

Chinese markets' bull run has come undone as hopes for significant stimulus crumble. Without follow-through on vows to shore up the economy, trading cycles could grow shorter and more volatile as speculators race to profit off fleeting rallies spurred by signals from Beijing.

Tech poster child poses a problem for Korea Inc

23 Jul 2024

Billionaire Brian Kim’s arrest for his role in a K-Pop deal adds to his Kakao empire's mounting legal woes. Its dominance in messaging also is a regulatory headache. Yet a tough crackdown on the company could jeopardise the country’s new breed of promising global businesses.

Big business curbs India’s populist instinct

22 Jul 2024

Bengaluru's home state of Karnataka backed down from a plan to force firms to hire more locals following a strong industry backlash. It's a relief for employers from Goldman Sachs to AB InBev. But pressure from the jobs crisis is building and will keep rearing its ugly head.

China rate cuts usher in next stimulus stage

22 Jul 2024

Days after Party leaders unveiled sweeping pledges to revive the $17 trln economy, the central bank unexpectedly cut key lending rates. It's a modest move but helps the PBOC establish a new benchmark and signals Beijing's urgency to speed up reforms. More policies will follow.