CHINAMHORA, Zimbabwe - At Solomon Chakauya's grocery store in Zimbabwe's Chinamhora district outside Harare, there's no sign of the seasonal Christmas rush that he needs to keep his business afloat. Even in the country's toughest times, sales rocketed in the days before Christmas, but this year few people are able to buy anything. It is a far cry from the revived economy that President Emmerson Mnangagwa promised more than a year ago when he took over from the ousted Robert Mugabe. Instead, shortages of bread, cooking oil and fuel have worsened in recent months, banknotes become even scarcer and shop shelves have often been left bare. "In previous years, people would stream in to buy things like rice, oil, biscuits, sweets, soup powder and drinks. It was so busy I would be on my feet all day," Chakauya, 29, told AFP. "Things are tough and most people have no money." But over this holiday season, Chakauya has sometimes had only 4 customers a day, leaving him to kill time sitting in the … [Read more...] about News Zimbabwe’s economic crisis wipes out Christmas cheer
2007 economic crisis
BUENOS AIRES: Every morning, Ezequiel Gonzalez takes a two-hour bus ride from his Buenos Aires suburb to the city hospital where he's in charge of maintenance. And like many Argentines he is feeling first-hand the pinch of government austerity measures.Even working the maximum possible overtime, he earns 20,000 pesos (US$500) a month - which is not enough to afford the "asado" barbecue that traditionally brings Argentine families together on Sundays."That's just for birthdays. Meat has become too expensive," Gonzalez complains. "Enough! We can't keep living in a state of permanent sacrifice, the price of meat is going up every day."The economy is in a fragile state. The currency has lost more than 50 per cent of its value against the dollar since the start of the year, inflation is due to surpass 30 per cent by the end of 2018 and interest rates have just been hiked to a world-high 60 per cent.In a desperate bid to steady the ship, President Mauricio Macri agreed a US$50 … [Read more...] about Inflation and economic crisis: Argentines have had enough
All eyes are on the Turkish lira. Its decline has been precipitous – it has already lost more than 40% of its value against the US dollar this year. For Turkey, which has relied on the inflow of foreign credit, this poses terrible risks. Enormous debt coupled with a vicious attack for political reasons on the Turkish economy by the US government has pushed Turkey toward the precipice. Will Turkey’s descent take Europe with it and then, certainly, other middle-income countries? Is this the harbinger of a new global financial crisis that would be far more dangerous than the one in 2007-08? The dailyReport Must-reads from across Asia - directly to your inbox Financial instability The credit crisis of 2007-08 has not really ended. The problems posed by the collapse of the US housing market and the subsequent debt problems in world banking have not been fixed. Sober recommendations from the Basel Committee on Banking Supervision as well as from the International … [Read more...] about Could Turkey trigger the next global financial crisis?
It is hard to believe that highly educated Western journalists, commentators and scholars still believe the Chinese economy will be “buried under a mountain of debt,” having been wrong for more than 30 years. Well-known economic scholars like Nobel laureate Paul Krugman seems to have bought into the “Chinese economic collapse” narrative, saying China’s “emperors wear no clothes” in reference to the country’s stock-market correction of losing more than a third of its value after a threefold gain in 2017. Then there were critics like Gordon Chang, who gained some dubious fame for predicting China’s “coming collapse” in 2011. The dailyReport Must-reads from across Asia - directly to your inbox Instead of collapsing, the Chinese economy has in fact sustained relatively high annual growth rates estimated at more than 6.5%, favorably compared with the West’s less than 2% according to the International … [Read more...] about Why critics predicting China’s economic demise are wrong
NEW YORK: Not long ago the Federal Reserve expected to quietly shed nearly half of its US$4.5-trillion portfolio by around 2022, leaving little trace of the extraordinary steps it took to face down the financial crisis. But an unexpected market kink could force the Fed to scrap the plan two or three years early and permanently leave it holding US$1 trillion more than it wanted.The U.S. central bank is making adjustments on the fly and keeping its options open. "I don't think that's problematic in any way" to halt the process "somewhat earlier," William Dudley, the former New York Fed president and key architect of the portfolio strategy, told reporters last month.Yet if the world's largest holder of U.S. bonds tossed out its play book and effectively took on a more accommodative stance, the result could be an across-the-board easing of market borrowing costs, the foreign-exchange value of the dollar, and of the growing strains on emerging markets."The evidence that we have suggests … [Read more...] about Fed’s escape from crisis holdings could hit dead end