German Finance Minister forecasts 7% inflation in 2023
Germany’s finance minister expects inflation in Europe’s largest economy to fall to 7% this year and fall further from 2024, but believes high energy prices will become the new normal. Christian Lindner points out that 2% inflation is the target and should be a priority for the European Central Bank and the German government.
Bulgaria signs long-term gas deal with Turkey
Bulgarian state gas company Bulgargaz on Tuesday signed a long-term deal with Turkish state-owned Botas, which will give it access to neighbouring Turkey’s gas network and liquefied natural gas (LNG) terminals to facilitate supplies.
Bulgaria was almost entirely dependent on Russian gas, but is looking for alternatives after Moscow cut deliveries in April over Sofia’s refusal to pay in roubles.
China, Philippines agree to peacefully resolve differences, boost cooperation
China and the Philippines have agreed to establish a direct channel of communication between their foreign ministries over the South China Sea to manage disputes peacefully, they said on Thursday.
The agreement, which contained 14 elements aimed at calming security tensions and boosting economic cooperation, comes as the two countries strive to mend a relationship damaged since the Philippines won an arbitration award in 2016 that invalidated China’s expansive claims in the South China Sea.
German exports fall unexpectedly in November
German exports unexpectedly fell in November, as high inflation and market uncertainty continue to weigh on Europe’s largest economy despite the disappearance of supply chain problems.
Exports fell by 0.3 per cent in the month, data from the federal statistics office showed.November’s drop comes after October’s figures were revised upwards to 0.8 per cent growth from the 0.6 per cent fall initially reported.
Imports also recorded a larger than expected fall of 3.3% in November, compared to the consensus of a 0.5% decline. Shipments to the United States fell by 1.5% on a monthly basis in November, while exports to EU member states fell by 0.4%.
US pursues non-compete clauses that keep workers from better jobs
The US Federal Trade Commission, charged with enforcing antitrust law, proposed a rule that would prohibit companies from requiring workers to sign non-compete clauses, as well as some training reimbursement agreements, which companies use to prevent workers from leaving for better jobs, the agency reported on Thursday.
The proposed rule is the latest sign from the Biden administration of its support for workers, which includes backing a measure to make it harder for an employer to classify a person as an “independent contractor,” which generally means fewer benefits and legal protections.
Japanese minister calls for new world order to counter the rise of authoritarian regimes
Japan’s trade and industry minister said on Thursday that post-Cold War free trade and economic interdependence had strengthened authoritarian regimes and that the United States and like-minded democracies needed to counter them with a “new world order”.
“Authoritarian countries have accumulated enormous power, both economic and military,” Yasutoshi Nishimura said in a speech at the Center for Strategic and International Studies in Washington. “We must rebuild a world order based on the fundamental values of freedom, democracy, human rights and the rule of law,” he added.
New US sanctions against supplying Iranian drones to Russia
The United States on Friday issued new sanctions against suppliers of Iranian drones that have been used to attack civilian infrastructure in Ukraine during the conflict with Russia. Russia has been targeting vital Ukrainian infrastructure with barrages of missiles and drones since October, causing widespread power outages as the cold weather sets in.
Argentina and China formalise currency swap deal
Argentina and China have formalised the extension of a currency swap agreement, which will allow Argentina to boost its depleted foreign exchange reserves, according to the Argentine Central Bank.
The Argentine government needs to rebuild its reserves to cover trade costs and future debt payments, and boosting reserves is a key objective of the major debt deal with the International Monetary Fund (IMF).
President Alberto Fernandez announced the agreement in November last year and said then that it amounted to US$5 billion
The US House of Representatives voted overwhelmingly on Tuesday to create a select committee on China, using one of its first votes since Republicans took control to underscore members’ desire to counter Beijing’s growing international influence.
“We certainly don’t want it to become a place that perpetuates anti-Asian hatred,” McGovern said, citing past rhetoric such as former Republican president Donald Trump labelling COVID-19 “the China virus”.
Iranian oil exports close 2022 at record highs despite absence of nuclear deal
Iranian oil exports hit new highs in the last two months of 2022 and are off to a strong start in 2023 despite US sanctions.
Tehran’s oil exports have been limited since former US President Donald Trump exited a 2015 nuclear deal in 2018 and reimposed sanctions aimed at curbing oil exports and associated revenues to Iran’s government.
Exports have surged under his successor, President Joe Biden, who had sought to revive the nuclear deal, and have reached the highest level since 2019 by some estimates. This comes despite headwinds such as the stalling of those talks and competition from discounted Russian crude.
Croatia clashes with traders over ‘savage’ post-euro price hikes
The Croatian government and businesses are at loggerheads as the country’s traders reject measures to combat price hikes following the introduction of the euro, blaming inflation.
Costs rose as soon as Croatia replaced its kuna with the euro on 1 January, as traders rounded up prices in the new currency. This prompted the government to take action against traders on 5 January, warning them that it would impose fines, cancel energy subsidies or raise taxes unless they returned prices to pre-euro levels.
The traders’ association has rejected the government’s accusations, saying its members do not raise prices for profit, but because of the rising cost of raw materials and energy.
Iran’s currency falls to record lows amid isolation, sanctions
Iran’s currency has fallen to a record low against the US dollar amid the country’s growing isolation and possible EU sanctions against Tehran’s Revolutionary Guard or some of its members.
Ties between the EU and Tehran have deteriorated in recent months in the face of stalled nuclear talks. Iran has detained several European citizens and the bloc has become increasingly critical of Iran’s violent treatment of protesters and use of executions.
Africa must learn to feed itself, says Senegal’s President
Africa must produce more food instead of relying on imports and aid, Senegalese President Macky Sall told leaders gathered in the West African country’s capital for a summit on Wednesday.
The continent is facing the worst food crisis in its history, with more than one in five Africans – a record 278 million people – going hungry, according to UN estimates.
Heavy debt burdens from the COVID-19 pandemic and the war in Ukraine, which drove up fuel, cereal and edible oil prices and diverted aid, have added to long-term causes of food insecurity, such as climate change and conflict, experts say.
Philippines posts $4.6 billion trade deficit in December
The Philippines posted a trade deficit of $4.6 billion in December, the largest trade gap in three months, government data showed on Thursday. This brought the full-year trade deficit to $58.3 billion, compared with a $42.2 billion gap in 2021.
Imports in December fell 9.9 per cent to $10.3 billion from a year earlier, the deepest drop since January 2021, the Philippine Statistics Authority said.
Exports fell 9.7% to $5.7 billion, the biggest drop since August 2020.
In Madrid, on 31 January 2023
International Trade and Sanctions Department