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Tag: World economy

  • The ‘greatest tragedy’ would be if central banks don’t finish the job on inflation, Larry Summers says

    The ‘greatest tragedy’ would be if central banks don’t finish the job on inflation, Larry Summers says

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    Larry Summers at the World Economic Forum in Davos, Switzerland.

    David A. Grogan | CNBC

    Central banks not finishing what they have started in bringing inflation back to Earth would be the “greatest tragedy” for the global economy, according to former U.S. Treasury Secretary Larry Summers.

    Central banks around the world have tightened monetary policy aggressively over the past year in a bid to get inflation under control, with annual consumer price increases running at multi-decade or even record highs across most major economies.

    Economists are turning cautiously optimistic as recent data has suggested a slowdown in inflation, which may enable policymakers to ease and eventually stop their aggressive cycle of interest rate hikes.

    Speaking on a CNBC-moderated panel at the conclusion of the World Economic Forum in Davos, Switzerland, on Friday, Summers said economists and business leaders at the summit were experiencing an “exhilaration of relief” but cautioned policymakers against resting on their laurels.

    “Hyperpopulists lost elections and accepted their defeat, Europe has not frozen, recession has not come, China has adjusted its policies towards the world and inflation has decelerated. Those are all positive things and reasons why we should feel better than we felt a few months ago,” Summers told CNBC’s Geoff Cutmore.

    “But relief must not become complacency. Inflation is down, but just as transitory factors elevated inflation earlier, transitory factors have contributed to the declines that we’ve seen in inflation and as in many journeys, the last part of a journey is often the hardest.”

    Although recent data has shown signs that inflation is entering a sustained downward trajectory, it remains well above most central banks’ targets. As such, policymakers have maintained a hawkish tone despite the perceived economic risks of persistent high interest rates.

    “The greatest tragedy in this moment would be if central banks were to lurch away from a focus on assuring price stability prematurely and we were to have to fight this battle twice,” Summers said.

    He added that he had been encouraged by recent comments from Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde.

    “We have to carry through, because if inflation were to be allowed to surge back, that would put not just price stability, not just standards of living for some of the lowest income people at risk, but also pose very substantial risks to cyclical stability,” he said.

    “At the same time, we need to remember both in our countries and around the world the importance of those who have been left behind and are bearing the greatest burden from all of these necessary adjustments. That too is going to be crucial in the years ahead.”

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  • Bank of Japan defends yield curve control measures, intends to stick to ultra-easy monetary policy

    Bank of Japan defends yield curve control measures, intends to stick to ultra-easy monetary policy

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    Bank of Japan Governor Haruhiko Kuroda on Friday defended the central bank’s decision to widen the trading band in its yield curve control program and committed to continuing the BOJ’s “extremely accommodative” expansionary monetary policy.

    Speaking during a panel session at the World Economic Forum in Davos, Switzerland, Kuroda said it was “not wrong” for the BOJ’s board to widen its tolerance range for the yield on its 10-year government bond from 25 basis points to 50 basis points last month.

    Since the move, 10-year JGB benchmark yields have exceeded the upper ceiling several times.

    His comments at Davos come shortly after the central bank defied market expectations by sticking to a core tenet of its ultra-loose monetary policy.

    The BOJ on Wednesday opted to keep its ultra-dovish -0.1% interest rate unchanged and maintained its yield curve tolerance band. The decision prompted the Japanese yen to fall against the U.S. dollar and followed weeks of bond market turmoil during which yields jumped.

    It leaves the BOJ at odds with other major central banks, which have hiked interest rates in a bid to tackle rising inflationary pressure.

    Japan’s inflation rate jumped to a fresh 41-year high in December. The rate is still relatively low when compared to some other countries. Nonetheless, the world’s third-largest economy reported core consumer prices rose to 4% on an annualized basis in the final month of last year, double the central bank’s target of 2%.

    Morning commuters in front of the Bank of Japan headquarters in Tokyo, Japan, on Jan. 16, 2023.

    Bloomberg | Bloomberg | Getty Images

    “We expect, probably from February this year, inflation rates start to decline and [in] fiscal year 2023 as a whole, [the] inflation rate will be less than 2%. So, we decided to maintain the current extremely accommodative monetary policy for the time being,” Kuroda said, largely attributing rising inflation to an import price hike.

    “Our hope is that wages start to rise and that could make [the] 2% inflation target to be met in a stable and sustainable manner, but we have to wait for some time,” he added.

    Kuroda’s one regret

    Alongside bond market turmoil, rising inflation is likely to amplify pressure on Kuroda, who is slated to retire in early April, to end the central bank’s ultra-loose monetary policy.

    Asked whether he had any regrets during his almost decade-long reign, Kuroda replied, “I think in the last nearly 10 years during which I have been governor of the Bank of Japan we tried to eradicate deflation and that certainly we have been successful in eradicating … And we tried to recover economic growth.”

    “All in all, I think the government’s policy coupled with the Bank of Japan’s extremely accommodative monetary policy has been successful in changing the Japanese economic structure and growth prospect, but unfortunately 2% inflation target has not been achieved in a sustainable and stable manner,” Kuroda said.

    “So that is the only regret I have,” he added.

    — CNBC’s Jihye Lee contributed to this report.

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  • In hindsight, monetary policy everywhere was too expansionary: Swiss central bank chief

    In hindsight, monetary policy everywhere was too expansionary: Swiss central bank chief

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    “We probably all underestimated inflationary pressure in 2021,” Jordan told CNBC.

    Bloomberg / Contributor / Getty Images

    Monetary policy was “too expansionary” in previous years and the current surge in consumer prices has not yet been brought under control, the chairman of the Swiss National Bank Thomas Jordan said Friday.

    “Probably with the benefit of hindsight monetary policy was all over the place a little bit too expansionary,” Jordan said when asked by CNBC’s Joumanna Bercetche if the current economic situation would be different if the central banking community had reacted quicker to signs of inflation.

    “We probably all underestimated inflationary pressure in 2021,” Jordan told CNBC on a panel at the World Economic Forum in Davos.

    While inflation will likely come down in 2023, having hit a three-decade high in Switzerland in August and a record high in the euro zone in October, Jordan said that the jump from 4% to 2% will be tough.

    “Core inflation is not coming down quickly,” Jordan said. “It will be much more difficult to bring inflation from 4% to 2% — so the commitment of central banks to go back to price stability will be absolutely essential,” he added.

    Tighter monetary policy ‘is necessary’

    Jordan highlighted that price stability should be the “absolute priority” for central banks, but he was unable to say whether a recession was on the horizon.

    “Hopefully it comes with limited impact on the real economy but this is difficult to predict,” he said.

    Changing wage expectations and companies’ responses to rising inflation show that it will be difficult to bring inflation down, and that even tighter monetary policy may be in the cards in Europe and the U.S., according to the central bank chairman.

    “Inflation is still at a level that tighter monetary policy is necessary,” Jordan told CNBC.

    The dollar rose to a session high against the Swiss franc after his comments, hitting 0.9211 at 9.30 a.m. London time after trading near 0.9164 earlier in the day.

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  • The whole West is threatened if an aggressor isn’t challenged, Dutch PM says

    The whole West is threatened if an aggressor isn’t challenged, Dutch PM says

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    Europe needs to do more to support Ukraine, according to the Dutch prime minister.

    Bloomberg / Contributor / Getty Images

    Dutch Prime Minister Mark Rutte said Thursday it was imperative that Europe continued to stand up to Russia’s aggression, saying the region had to do “everything we can to help Ukrainians.”

    “If an aggressor is not challenged and can go about his business, it won’t end with Ukraine. The whole West is threatened,” Rutte told CNBC, as he discussed Europe’s response to the war in Ukriane at the World Economic Forum in Davos.

    Rutte referenced the 1938 Munich Agreement in his discussion with CNBC’s Steve Sedgwick, where the allied forces agreed that Czechoslovakia would surrender its border regions and defenses to Nazi Germany.

    “People feel that this is about values, that we cannot accept one country invading another country … It is also about our collective safety,” he added.

    Rutte also said Europe needs to do more to help Ukraine, but that the issue of sending tanks is “a sensitive decision.”

    “I do agree there is an argument to send [tanks] to Ukraine. There is also an argument to take the decision in conjunction with others, including our friends in the U.S.,” he said, adding that he was “fairly optimistic” that the situation “could get to a landing spot.”

    “We have to do everything we can to help Ukrainians,” Rutte said.

    Ukraine has repeatedly asked its Western allies to provide tanks to help it fight Russia, which has caused tension between European countries, with some fearing the provision of weapons could further provoke Moscow.

    But the region could be close to reaching an agreement.

    “My understanding is that a deal has essentially been worked out,” John E. Herbst, senior director of the Atlantic Council’s Eurasia Center and a former U.S. ambassador to Ukraine, told CNBC Monday.

    “We know that the laggard here has been Germany, and it seems that the Germans have now been persuaded that one, they’ll let other countries which have Leopard tanks send them to Ukraine — that, I’m confident of — and I also think it’s highly likely, but I’m not as confident, that you’ll see Germany send some Leopards as well,” he said.

    When asked about Germany’s contributions, Rutte said the country has always “done whatever needed to be done” to help Ukraine.

    — CNBC’s Holly Ellyatt contributed to this report.

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  • UK Labour leader Starmer slams PM’s Davos no-show, touts new ‘inverse OPEC’ alliance

    UK Labour leader Starmer slams PM’s Davos no-show, touts new ‘inverse OPEC’ alliance

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    DAVOS, Switzerland – Jan. 19, 2023: Keir Starmer, leader of the Labour Party, during a CNBC panel session on day three of the World Economic Forum (WEF).

    Stefan Wermuth/Bloomberg via Getty Images

    U.K. opposition Labour Party leader Keir Starmer on Thursday hit out at Prime Minister Rishi Sunak for opting not to attend the World Economic Forum in Davos, Switzerland.

    On a CNBC-moderated panel in Davos, Starmer said he had been meeting with business leaders and policymakers to promote the idea of a Clean Power Alliance should Labour win the next general election in 2024.

    The international body, which Starmer characterized as an “inverse OPEC,” would seek to address the joint economic challenges of climate change, renewable energy job creation and household energy costs.

    “I think our prime minister should have showed up — I absolutely do. One of the things that has been impressed on me since I’ve been here is the absence of the United Kingdom,” Starmer told the panel.

    “That’s why I think it’s really important that I’m here and that our Shadow Chancellor Rachel Reeves is here, as a statement of intent that should there be a change of government, and I hope there will be, the United Kingdom will play its part on the global stage in a way I think it probably hasn’t in recent years.”

    Sunak was not the only world leader to skip the summit, with U.S. President Joe Biden, French President Emmanuel Macron and new Brazilian President Luiz Inácio Lula da Silva also absent.

    British Business and Energy Minister Grant Shapps is in the Swiss Alps in Sunak’s absence, and told CNBC on Thursday that it was appropriate that he attend, as his role in government is to secure business investment and jobs for the U.K.

    “[Sunak] may well come another year, but right now in the midst of the energy crisis caused by Ukraine being invaded by Putin, with all of the trauma that we’ve gone through with Covid and much else, he is at home focusing — as a brand new prime minister, by the way, two or three months into the job — on the domestic priorities,” Shapps said.

    “I’m here because I’m actually, technically, if you like, the right person to have in Davos.”

    Sunak spent Thursday on a visit to Morecambe in the northwest of England as part of a series of trips to promote his government’s “leveling up” funding.

    ‘Inverse OPEC’

    Labour holds a massive polling lead over Sunak’s ruling Conservative Party ahead of the next general election slated for 2024. The latest Ipsos voting intention poll published this week gave Labour a 26 point lead with a 49% share of the vote to the Conservatives’ 23%.

    Starmer vowed that in the event that Labour does take power in Westminster in 2024, his government would work with the private sector in the U.K., where renewable energy contracts are estimated at nine times cheaper than oil and gas, to unlock employment and innovation opportunities.

    UK Business Secretary: Prime Minister Sunak is at home focusing on domestic priorities

    “The prize here is huge in terms of energy security and that shouldn’t be something which is national. It’s in all of our interests to have energy security, it’s in all of our interests to make sure that Putin can’t weaponize energy across the world, whether it’s now or any time in the future,” Starmer said.

    “There’s an element of course of each country trying to rise to this challenge themselves but there is also this element of mutual cooperation in this in relation to the mutual threats that we are facing, and that’s why I’m very keen to develop this idea of Clean Power Alliance, which is an inverse OPEC in the sense that the purpose is to drive down those prices across the globe.”

    OPEC, or the Organization of the Petroleum Exporting Countries, is a permanent intergovernmental alliance of 13 major oil producing nations that negotiate adjustments in their respective production in order to retain stability in global oil prices.

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  • Irish premier hopeful of post-Brexit trade talk breakthrough — but ‘we’re not there yet’

    Irish premier hopeful of post-Brexit trade talk breakthrough — but ‘we’re not there yet’

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    Taoiseach Leo Varadkar talking to the media outside the Stormont hotel on Jan. 12.

    Brian Lawless – Pa Images | Pa Images | Getty Images

    Irish premier Leo Varadkar on Thursday said there has yet to be a breakthrough over Northern Ireland’s post-Brexit trade rules, but expressed hopes that an agreement is within reach.

    “We’re not there yet. I am hopeful that we will get there,” Taoiseach (Irish Prime Minister) Varadkar told CNBC’s Steve Sedgwick at the World Economic Forum in Davos, Switzerland.

    “I think certainly Prime Minister [Rishi] Sunak and the British government seem to be very serious about coming to an agreement and settling this issue. And I think there is increased flexibility from the European Union side, which includes Ireland, around coming to an agreement.”

    Varadkar recognized other issues that require attention, “The protocol is important, but there is war in Ukraine, there is a global recession underway, an energy crisis, inflation and Europe and the U.K. need to work together.”

    He added that “any kind of barrier to further cooperation that we can remove is in the interest, I think, of everyone.”

    His comments come shortly after Ireland’s Finance Minister Michael McGrath spoke of growing optimism and “welcome signs of progress” surrounding negotiations between the U.K. and European Union.

    “The talks are ongoing and there does appear to be a better mood overall, more positive discussions underway between the EU and the U.K.,” McGrath told CNBC’s Joumanna Bercetche on Wednesday.

    “And I think it is in everyone’s interests that a negotiated agreement would be reached soon, so that we can have free-flowing trade across the Irish Sea, between Britain and Ireland — North and South — and we protect the Good Friday Agreement and peace,” he said.

    Britain and the European Union on Monday agreed to work in a “constructive and collaborative spirit” to resolve a post-Brexit trade dispute over Northern Ireland.

    “The two sides discussed the range of existing challenges over the last two years and the need to find solutions together,” European Commission Vice-President Maros Sefcovic and British Foreign Minister James Cleverly said in a joint statement.

    More positive Brexit discussions between UK and EU underway, says Irish finance minister

    This follows months of talks to conclude a bitter political dispute over the Northern Ireland protocol, part of the post-Brexit trading agreement that requires checks on some goods entering Northern Ireland from the rest of the U.K.

    Northern Ireland’s power-sharing government collapsed almost a year ago, when the Democratic Unionist Party quit in protest against an effective border in the Irish Sea.

    Varadkar said last week that he was hopeful it would be possible to come to an agreement on the protocol and repair relations with Northern Ireland’s political parties. However, he said a deal may not necessarily lead to the restoration of Northern Ireland’s executive.

    — CNBC’s Matt Clinch contributed to this report.

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  • Former Indian central bank governor says a soft landing will be ‘very hard’ for the Fed

    Former Indian central bank governor says a soft landing will be ‘very hard’ for the Fed

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    Rajan Raghuram at Jackson Hole, Wyoming August 24, 2018. 

    David A. Grogan | CNBC

    The U.S. Federal Reserve will find it “very hard” to engineer an economic soft landing after its cycle of aggressive interest rate hikes, according to former Reserve Bank of India Governor Raghuram Rajan.

    The Federal Open Market Committee in December raised its benchmark interest rate by 50 basis points to a target range between 4.25% and 4.5% — its highest level in 15 years — as it continues to fight sky-high inflation.

    After a string of promising data releases indicated softening inflation, markets believe that the central bank is ready to ease its foot off the brake. Market pricing now suggests a hike of just 25 basis points at the Fed’s February meeting.

    Fed officials have emphasized that the fight to bring inflation back towards the FOMC’s 2% target is not over. A key market concern is that a further tightening of monetary policy could tip the U.S. economy into recession.

    “They need to bring down inflation, however as soon as they think they’ve done enough and pause, markets are going to be very reactive, they’re going to celebrate,” Rajan told CNBC’s Arjun Kharpal at the World Economic Forum in Davos, Switzerland. “As they celebrate, it does the opposite of what the Fed wants, it loosens financial conditions quite a bit. People see their stock portfolios go up, they go out and spend. That’s exactly the wrong reaction.”

    Rajan suggested that the Fed’s ideal scenario is for the public to cautiously rein back spending and open up room for inflation to subside, as well as freeing up some slack in the so-far stubbornly tight U.S. labor markets.

    Rajan, now a Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth, said the Fed is therefore likely to “err on the side of doing more rather than doing less,” slightly overtightening and pushing unemployment higher in order to ensure that the downward inflationary trajectory is sustainable.

    Jerome Powell has done a pretty good job, says billionaire investor David Rubenstein

    While this approach may work if the knock-on effects are “linear” — translating a little overtightening by the Fed to a small overshoot on unemployment — he noted the risk of a cliff edge effect in labor markets.

    “If people are not firing workers because they see it is very hard to hire workers — nobody’s firing, it’s very hard to hire workers, let me keep on my workers — once you see enough slack build up in the labor market, you say ‘it’s easy to find workers, let me fire the ones I had in a hurry,’ and then you get a mass layoff effect,” Rajan explained. “Is it linear or is it non-linear? We don’t know.”

    Housing market domino effect

    Rajan also pointed towards the potential U.S. housing implications, after mortgage rates dropped to 6.23% last week. They stood in a 6.5% to 7% range for much of 2022, even as house prices stabilized.

    “Nobody’s selling, therefore the little demand is met by little supply. What’s [it] going to take [for] people to sell? Right now, they’re not selling because they can’t buy,” Rajan said. “I have a 3% mortgage, I can’t afford a house at 7% so I’m not going to sell because I can’t buy. If I get laid off, I can’t make my mortgage payments, I have to sell — that’s when the mortgage market takes a downturn, the housing market takes a downturn, prices fall — that’s another downside potentially.”

    Rajan stressed that the labor and housing market cliff edge is the “dire scenario” and that the most likely outcome was a slight U.S. recession. He refused to rule out a soft landing, which avoids two consecutive quarters of negative growth.

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  • The UK is fiscally unstable, says North Sea oil CEO

    The UK is fiscally unstable, says North Sea oil CEO

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    A British Union flag flies near Big Ben at the Palace of Westminster, in London, UK, on Monday, Oct. 24, 2022.

    Jason Alden | Bloomberg | Getty Images

    The U.K. is fiscally unstable and this has led the government to indulge in “short-termism” by slapping oil majors with windfall taxes, according to Amjad Bseisu, CEO of EnQuest.

    Speaking to CNBC at the World Economic Forum in Davos, Switzerland, on Tuesday, Bseisu said the North Sea petroleum exploration and production company now sees Asia as its biggest growth area, rather than the U.K. or Europe.

    In November, the British government raised an existing windfall tax on oil company profits from 25% to 35% until 2028. This takes the overall levy rate for North Sea producers to 75%, once the 40% corporation tax charge is applied.

    The windfall tax sought to redirect bumper profits arising from soaring oil and gas prices into programs to subsidize household energy bills, as the country battles a historic cost-of-living crisis.

    “It’s definitely short-termism, especially [given] that the energy industry needs to invest in renewables and needs the cash flow,” Bseisu said, adding that Europe and the U.K. need investment in renewables and that “increasing taxes is the last thing you want to do” to achieve that aim.

    “[The] stability of fiscal regimes is important, but also the energy security and the supply of internal energy is extremely important.”

    U.K. Prime Minister Rishi Sunak initially introduced the windfall tax in May, when he was finance minister in Boris Johnson’s government, prior to Johnson’s resignation in July. Sunak was appointed leader of the Conservative Party and prime minister in late October, following the brief and economically tumultuous tenure of Johnson’s successor Liz Truss.

    In November, new Finance Minister Jeremy Hunt expanded the levy on energy profits, while announcing a slew of other tax hikes and spending cuts, as the government looked to plug a substantial hole in the country’s public finances.

    Energy crisis: The worst is over for Europe, Enel CEO says

    “The U.K. is particularly unstable fiscally, which I think affects the long-term views on investments. You can do short-cycle investments but long-cycle investments are difficult in a very volatile (environment),” Bseisu said.

    “There’s a lot of public pressure to tax oil companies with high profits, even though the profits are not being made in the U.K. — for example, [for] many of the majors, it’s maybe 5% now in terms of their net income in the U.K.”

    Bseisu suggested that the political instability meant that the new government “wanted a fix,” but called the increase to the windfall tax “unfortunate because it’s affecting the industry quite badly.”

    Harbour Energy, the largest offshore oil and gas producer in British waters, on Wednesday revealed that it would be forced to cut jobs, with a spokesperson telling Reuters that the windfall tax was largely to blame.

    “Europe has done something smaller but I think the U.K. stands out in this respect — the U.S. hasn’t really taxed companies since I think 20 or 30 years ago,” he said.

    “It is a volatile business, we were losing money two years ago — significant amounts of money, hundreds of billions in the industry — and prices did peak, but at the price they are today, they are lower than they were before the invasion.”

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  • Greta Thunberg says Davos elite are prioritizing greed and short-term profits over people and the planet

    Greta Thunberg says Davos elite are prioritizing greed and short-term profits over people and the planet

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    Swedish climate activist Greta Thunberg on Thursday accused the political and business elite at the World Economic Forum in Davos, Switzerland, of prioritizing self-interest and short-term profits over people and the planet.

    “We are right now in Davos where basically the people who are mostly fueling the destruction of the planet, the people who are at the very core of the climate crisis, the people who are investing in fossil fuels etcetera, etcetera and yet somehow these are the people that we seem to rely on solving our problems,” Thunberg said.

    “They have proven time and time again that they are not prioritizing that. They are prioritizing self-greed, corporate greed and short-term economic profits above people and above planet.”

    “These people are going to go as far as they possibly can as long as they can get away with it. They will continue to invest in fossil fuels, they will continue to throw people under the bus for their own gain,” she added.

    Thunberg said it was an “absurd” situation that the world seems to be listening to Davos delegates rather than those on the frontlines of the climate emergency.

    The 20-year-old was released by police earlier this week after being detained alongside other climate activists for protesting the expansion of a coal mine in the tiny village of Luetzerath in Germany.

    “Yesterday I was part of a group that peacefully protested the expansion of a coal mine in Germany. We were kettled by police and then detained but were let go later that evening,” Thunberg said on Wednesday via Twitter. “Climate protection is not a crime,” she added.

    Thunberg said it was an “absurd” situation that the world seems to be listening to Davos delegates rather than those on the frontlines of the climate emergency.

    Fabrice Coffrini | Afp | Getty Images

    Alongside IEA Executive Director Fatih Birol, Thunberg took part in the CNBC-moderated panel with youth climate advocates Vanessa Nakate, Helena Gualinga and Luisa Neubauer.

    The four climate activists arrived in Davos having recently composed an open letter to the CEOs of fossil fuel companies through the non-profit website Avaaz. Thunberg, Nakate, Gualinga and Neubauer called on the executives of energy giants to “immediately stop” opening new oil, gas or coal extraction sites and said they intended to keep protesting in the streets in “huge numbers.”

    “We know that Big Oil knew for decades that fossil fuels cause catastrophic climate change, misled the public about climate science and risks [and] deceived politicians with disinformation sowing doubt and causing delay,” the letter says.

    What haven’t we said? What haven’t we done? What haven’t we communicated enough?

    Vanessa Nakate

    climate activist

    It adds that fossil fuel executives “must end these activities as they are in direct violation of our human right to a clean, healthy, and sustainable environment, your duties of care, as well as the rights of Indigenous people.”

    Failure to act immediately, the activists warn, comes at a time when citizens around the world “will consider taking any and all legal action to hold you accountable.” More than 900,000 people added their names to the letter as of Thursday afternoon.

    ‘Dirty deals’ in Davos

    Luisa Neubauer, climate activist and one of the main organizers of the Fridays for Future movement in Germany, on the same panel Thursday that she spent the last week with Thunberg and many others “defending livelihoods against coal diggers” in western Germany.

    “And many people then said ‘oh that is an interesting change in scenery coming from the mud in Luetzerath to Davos.’ We walked through the dirty mud in Luetzerath and now we are in Davos witnessing dirty deals being made so I’m not sure how much of a change that actually is,” Neubauer said.

    IEA chief Fatih Birol, Greta Thunberg and other youth activists discuss the climate crisis at Davos

    “We don’t see the sense of urgency reflected in action,” said Helena Gualinga, an Indigenous youth climate advocate from Ecuador.

    “Indigenous communities, Indigenous peoples, youth, scientists, we have all been pointing towards a direction [but] the oil industry is not going there, the world leaders are not going there,” she added.

    The fossil fuel industry has sought to underline the importance of energy security amid calls for a rapid transition to renewables, typically highlighting that demand for fossil fuels remains high.

    To be sure, the burning of fossil fuels such as coal, oil and gas, is the chief driver of the climate crisis.

    “What haven’t we said? What haven’t we done? What haven’t we communicated enough?” Ugandan climate activist Vanessa Nakate said on Thursday.

    Nakate said it was evident that in most cases, the countries and areas around the world least responsible for the climate emergency were typically the hardest hit.

    IEA says investment is ‘magic word’

    Asked why new fossil fuel production projects were going ahead despite opposition from both the IEA and climate campaigners, Executive Director Fatih Birol said, “The issue is we have to keep the temperature increase to 1.5 degrees Celsius. If it goes above that, the rather fragile equilibrium of our planet will be distorted — we will all be in trouble.”

    “We need to get energy from clean carbon-free form energy sources and to do that, the magic word is investment.”

    Birol said the world currently invests about $1.5 trillion in clean energy, but this needs to increase to $4 trillion in order to be in line with climate targets.

    “If we do that … then we don’t need any more coal, we don’t need any more oil and gas. [We don’t need any] new investments there, but the point of departure is making clean energy investments and having a clean, secure energy future for all,” Birol said.

    The IEA’s Birol said the world had “never, ever seen an energy crisis of this depth and complexity” following Russia’s full-scale invasion of Ukraine in February.

    Anadolu Agency | Anadolu Agency | Getty Images

    The climate emergency is one of the main themes for this year’s annual meeting in the Swiss Alpine town of Davos, which brings together roughly 1,500 business leaders.

    Addressing delegates during a special address on Wednesday, U.N. Secretary-General Antonio Guterres condemned fossil fuel giants for ignoring their own climate science. He accused the oil and gas industry of seeking to expand production despite knowing “full well” that their business model is incompatible with human survival.

    “Some in Big Oil peddled the big lie,” Guterres said. “And like the tobacco industry, those responsible must be held to account.”

    Thunberg has previously excoriated the climate inaction of the world’s political and business leaders at WEF, saying in Jan. 2019, “Our house is on fire.”

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  • Ad mogul sees Meta rebounding ‘extremely strongly,’ Amazon ad revenue hitting $100 billion

    Ad mogul sees Meta rebounding ‘extremely strongly,’ Amazon ad revenue hitting $100 billion

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    Sir Martin Sorrell, Executive Chairman, S4 Capital.

    Eóin Noonan | Sportsfile | Getty Images | Web Summit

    Advertising titan Martin Sorrell believes Meta will rebound “extremely strongly this year” and sees a promising outlook for U.S. tech giants, despite a bruising 2022 and mass layoffs.

    U.S. tech companies have let go of more than 60,000 employees in the last year, as slowing economic growth, higher interest rates in response to soaring inflation and competitive challenges squeezed margins and hammered the stock prices of tech behemoths.

    Facebook parent Meta in November announced plans to eliminate 13% of its staff, amounting to more than 11,000 employees. It also issued bleak fourth-quarter guidance that wiped out around a quarter of its market cap, pushing the stock to its lowest since 2016.

    A broad slowdown in online ad spending and competition from new rivals such as TikTok, along with challenges associated with privacy changes to Apple’s iOS, have hampered the social media group’s business over the past year.

    The company has also taken a substantial hit from its massive investment in building its augmented reality world known as the metaverse — a strategy that has proven divisive among analysts and investors.

    Sorrell, executive chairman of U.K. advertising agency S4 Capital, expects Meta to address most of its business challenges in 2023, while benefiting from China’s reopening.

    “I think you’ll see Meta come back extremely strongly this year, on the back of reels and business messenger, to deal with the competition from TikTok and other short form video competitors,” Sorrell told CNBC on the sidelines of the World Economic Forum in Davos, Switzerland.

    “Google had a solid year last year, and I think they’ll have a strong year this year. Amazon increased its advertising revenues from $31bn to $41bn, and I think [it] will hit $100bn in time, despite what you’re seeing in terms of jobs and hiring.”

    He also suggested that the reopening of the Chinese economy would be “huge” for big tech firms, noting that outbound Chinese business, or Chinese companies expanding their businesses abroad, were historically the second-largest profit centers for the likes of Meta, Amazon and Google parent Alphabet.

    Sorrell launched S4, which operates in both the digital advertising and digital transformation spaces, after leaving ad giant WPP in 2018. S4 on Wednesday confirmed its full-year guidance, and Sorrell said his clients’ advertising spending priorities in 2023 would be “topline growth in activation and performance” and “reducing [the] cost of digital transformation.”

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  • Top pharma CEO says Covid likely to become endemic, urges investment in pandemic preparedness

    Top pharma CEO says Covid likely to become endemic, urges investment in pandemic preparedness

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    Novartis said in August that it plans to spin off its generics unit Sandoz to sharpen its focus on its patented prescription medicines.

    Bloomberg | Bloomberg | Getty Images

    The chief executive of Swiss pharmaceutical giant Novartis on Thursday warned the coronavirus pandemic will likely settle into an endemic phase and renewed calls for policymakers to sufficiently finance pandemic preparedness.

    “If you look over the last two years, we have populations that have built up immunity, you have a virus that’s continuing to make shifts, but I think what we’re going to settle into is more of an endemic environment with respect to coronaviruses and the Covid virus specifically,” Vas Narasimhan, CEO of Novartis, told CNBC at the World Economic Forum in Davos, Switzerland.

    “That will mean we will have sporadic outbreaks, we will have populations at risk that need to continue to be vaccinated but I would expect as it has been the case with other coronaviruses over the last centuries that the human populations will adapt and will come to a kind of resolution with this virus.”

    Narasimhan, who has previously warned that future pandemics are bound to happen, made clear that world leaders must learn from the coronavirus crisis to be in a better place for future pandemics.

    “I think what is really important now is we turn our attention to pandemic preparedness for the future,” Narasimhan said.

    “I’m not sure we have learned our lessons of the past that we need to invest in [research and development], we need to invest more in preparedness to be ready for the next pandemic — and I think that should be on the global agenda,” he added.

    ‘Straining credulity’

    His comments come shortly after U.N. Secretary-General Antonio Guterres warned the world’s failure to prepare for future pandemics is “straining credulity.”

    Speaking at WEF on Wednesday, Guterres said, “Somehow — after all we have endured — we have not learned the global public health lessons of the pandemic. We are nowhere near ready for pandemics to come.”

    Last month, China abruptly ended most Covid-19 controls, leading to a surge in infections among the population of 1.4 billion.

    Beijing reported on Saturday that almost 60,000 people with Covid had died in hospital since the country dropped its strict Covid restrictions last month, a sharp increase from previous figures.

    Asked whether it makes pharmacological sense for some governments to take a tough line on the entry of Chinese citizens into their country following Beijing’s reopening, Narasimhan replied, “I think from an epidemiological standpoint, you can certainly call it into question because in the end, we’ve learned the hard way these viruses will move regardless, and they don’t really pay attention to national borders.”

    “I continue to believe open borders and open economies are the right solution for the global order,” he added.

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  • China’s recovery may mean the Fed will have to hike rates longer

    China’s recovery may mean the Fed will have to hike rates longer

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    SHANGHAI, CHINA – Tourists pose for a photo at the Shanghai Disney Resort as the resort kicked off a month of festivities from January 13 to February 10 to celebrate the upcoming Chinese New Year.

    China News Service | China News Service | Getty Images

    As the end of China’s stringent Covid restrictions quickens the country’s economic recovery, concerns about pent-up Chinese demand — and the inflation that may follow — could mean bad news for the U.S. Federal Reserve.

    Economic data indicates that the Fed’s aggressive rate hikes are pulling down U.S. inflation, but China’s demand could make commodity prices return to levels from early 2022, before the U.S. central bank embarked on its journey of hiking rates to bring down inflationary pressures.

    “In our view … a stronger China increases the chances of a stubbornly hawkish Fed,” Tavis McCourt, institutional equity strategist at Raymond James, said in his 2023 Outlook.

    “With China, we do need more of everything – if that drives enough demand to get commodity prices back up closer to where they were in the spring of last year, then that puts the progress we’ve seen on inflation in a much more tenuous position,” he said.

    With activity expected to pick up from China, demand for a variety of commodities will drive , McCourt said.

    “As consumers are allowed out of their apartments, and start becoming more mobile, there’s going to be more gasoline demand and more jet fuel demand,” he said. “Demand is going to come back really quickly.”

    Commodity prices have indeed seen significant gains since December, when China announced plans to lift some of its strictest Covid measures.

    Three-month copper futures on the London Metal Exchange traded at $9,436 on Thursday morning – up around 12.5% month-to-date. Aluminum prices also rose 11.7% in January, FactSet Data showed.

    In fact, Fed officials have voiced concern over China’s economy as a factor that could reverse its efforts to tame inflationary pressures in the U.S. economy.

    SHANGHAI, CHINA – JANUARY 15: Travellers crowd at the gates and wait for trains at the Shanghai Hongqiao Railway Station during the peak travel rush for the upcoming Chinese New Year holiday on January 15, 2023 in Shanghai, China.

    Kevin Frayer | Getty Images News | Getty Images

    St. Louis Fed President James Bullard said China’s reopening, paired with a lower chance of a recession in Europe, may cause inflation to reaccelerate.

    “They’ve abandoned their Covid-zero policy and are moving toward reopening of China sooner than was previous expected, so that sounds like renewed upward pressure on the margin on global commodity markets,” Bullard said during a roundtable talk hosted by the Wall Street Journal on Wednesday.

    “I’m nervous that will lead to upward pressure on inflation more generally – that’s a risk that we have to factor in when making in monetary policy,” he said. “Some of the factors that went in favor of the transitory story of 2022 may be reversing here,” he said.

    ‘Limited spill-overs’

    China’s reopening may bring inflation worries, but the spillover effects onto the global economy could be limited, according to Morgan Stanley.

    “As the recovery [in China] is driven more by consumption and not investment, we see limited spill-overs to inflation in the rest of the region,” the firm’s economists, led by Chief Asia Economist Chetan Ahya, said in a Wednesday report.

    “Global goods demand/supply balances matter more, and with global goods demand still deflating, it will further limit any spillover effects to the region’s inflation,” they said.

    One analyst said commodity prices may have “exploded” but questioned whether that would continue.

    “Aluminum prices have exploded really in the past several months, on the same speculation … regarding China reopening,” Wolfe Research’s managing director Timna Tanners said on CNBC’s “Street Signs Asia.

    “We definitely question whether or not it’s sustainable or supported by the data, but it is hard to fight some of this momentum into the reopening trade,” she said.

    “We don’t necessarily think that there will be this huge spurt of activity in consumption or aluminum, but again, if the market thinks that, and inventories are low and there is some restocking before Chinese New Year, the momentum has really been powerful.”

    Read more about China from CNBC Pro

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  • Building gains into housing stocks and how to trade the sector

    Building gains into housing stocks and how to trade the sector

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    CNBC’s Diana Olick digs into today’s housing data. With CNBC’s Melissa Lee and the Fast Money traders, Tim Seymour, Karen Finerman, Dan Nathan and Guy Adami.

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  • Ukraine’s Zelenskyy tells Davos supplies of Western tanks must outpace another Russian offensive

    Ukraine’s Zelenskyy tells Davos supplies of Western tanks must outpace another Russian offensive

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    “Mobilization of the world must outpace a next military mobilization of our joint enemy,” Zelenskyy said via videoconference at the World Economic Forum in Davos, Switzerland.

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    Ukrainian President Volodymyr Zelenskyy on Wednesday said the supplies of Western tanks must outpace another Russian attack, reviving Kyiv’s push for the delivery of heavily armored vehicles amid fears the Kremlin could soon launch a new mobilization drive.

    “Mobilization of the world must outpace a next military mobilization of our joint enemy,” Zelenskyy said via videoconference at the World Economic Forum in Davos, Switzerland.

    “The supplying of Ukraine with air defense systems must outpace Russia’s next missile attacks. The supplies of Western tanks must outpace another invasion of Russian tanks.”

    “The restoration of security and peace in Ukraine must outpace Russia’s attacks on security and peace in other countries. A tribunal for military crimes must prevent new ones,” Zelenskyy said.

    His comments come amid speculation that Russian President Vladimir Putin may be poised to announce another mobilization round.

    Analysts at the Institute for the Study of War, a U.S.-based think tank, said Tuesday that Putin may announce “a second mobilization wave in the coming days, possibly as soon as January 18.”

    Zelenskyy and senior Ukrainian officials have repeatedly urged Western allies to provide heavy military vehicles and weapons in order to help defeat Russia’s nearly year-long onslaught.

    Poland, France and the U.K. have recently pledged to send tanks to the Ukrainian military, while Finland says it could also donate a small number of German-made Leopard 2 tanks to help Kyiv protect itself.

    Germany’s government said last week, however, that it has no plans to provide Ukraine with the Leopard 2 tanks.

    ‘Another horrible day for Ukraine’

    Earlier on Wednesday, the three main figures of Ukraine’s Interior Ministry died in a helicopter crash in a suburb of the capital Kyiv.

    The helicopter fell near a kindergarten and a residential building in Brovary with the cause of the crash being investigated.

    Ukraine’s Interior Minister Denys Monastyrskyi, First Deputy Minister Yevhenii Yenin and the Interior Ministry’s State Secretary Yurii Lubkovych were among those killed in the crash.

    Ukrainian authorities said at least 14 people died in the crash. Initially, reports indicated 18 people had died in the crash, although this has since been revised.

    Zelenskyy described the incident as a “tragedy” and led delegates at Davos in a minute’s silence “to honor the memory of every person Ukraine has lost.”

    Separately, Ukrainian first lady Olena Zelenska said at a news conference that it was “another horrible day for Ukraine.”

    — CNBC’s Holly Ellyatt contributed to this report.

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  • IEA chief expects Russia to lose the energy battle, sees major difficulties for Moscow’s exports

    IEA chief expects Russia to lose the energy battle, sees major difficulties for Moscow’s exports

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    The IEA’s Birol said that prior to Russia’s full-scale invasion of Ukraine on Feb. 24 last year, “Russia was the number one energy exporter to the world.”

    Natalia Kolesnikova | Afp | Getty Images

    International Energy Agency (IEA) Executive Director Fatih Birol believes Russia will lose its energy war with the West, saying China and India’s crude oil purchases will likely fall short of offsetting the fall in shipments to Europe.

    “Europe is having major economic problems, but for Russia, Europe was a very, very important client,” Birol told CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland.

    Last week, an independent analysis from the Center for Research on Energy and Clean Air showed that revenues from Russia’s fossil fuel exports collapsed in December, significantly hampering President Vladimir Putin’s ability to finance the war in Ukraine.

    The Finnish think tank’s report found that the first month of the European Union’s ban on seaborne imports of Russian crude and the G-7′s price cap had cost Moscow an estimated 160 million euros ($173.4 million) per day.

    It said that the Western measures were largely responsible for a 17% fall in Russia’s earnings from fossil fuel exports in the final month of 2022. A spokesperson for Russia’s Finance Ministry did not respond when asked to comment on the report’s findings.

    Birol described Russia as “the number one energy exporter to the world” prior to Moscow’s full-scale invasion of Ukraine on Feb. 24 last year.

    Roughly 75% of Russian gas exports and 55% of its oil exports went to Europe, Birol said, before the EU sought to rapidly wean itself off Moscow’s fossil fuels.

    “So, to find a client for gas and oil so easily to replace Europe will be extremely difficult,” he said. “I know that there are some countries in Asia, [such as] China and India, that are benefitting from this situation, and they are buying a lot of Russian oil, but I would be very careful to believe that those countries’ imports will, both in volume terms and revenue terms, combine to what Europe was doing.”

    “Russia will face major difficulties both for oil and gas exports and, in my view, when we look at the next couple of quarters and years, Russia will lose the energy battle,” Birol said.

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  • John Kerry says thawing U.S.-China tensions could make a huge difference to climate fight

    John Kerry says thawing U.S.-China tensions could make a huge difference to climate fight

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    Kerry said he hopes the resumption of diplomatic talks with China can make a “huge difference” in the fight to prevent the worst of what the climate emergency has in store.

    Fabrice Coffrini | Afp | Getty Images

    U.S. climate envoy John Kerry on Wednesday said he hopes that the resumption of diplomatic talks with China can make a “huge difference” in the fight to prevent the worst of what the climate emergency has in store.

    “We very much hope to be able to find the pathway to a breakthrough that could make a huge difference,” Kerry told CNBC’s Tania Bryer at the World Economic Forum in Davos, Switzerland.

    Asked whether he had met with China’s Vice Premier Liu He at WEF, Kerry replied, “I know that he is here. I’ve not yet had a chance to either bump into him or see him, but I’d be happy to. It would be something that I would want to do.”

    The U.S. and China formally resumed stalled climate talks with China late last year following a meeting between President Joe Biden and President Xi Jinping.

    The announcement came during the COP27 climate summit in Sharm el-Sheikh, Egypt, where many delegates had expressed deep concern about the lack of cooperation between the world’s two largest economies and top greenhouse gas emitters.

    A White House readout of the meeting at the time said that Biden and Xi had “agreed to empower key senior officials to maintain communication and deepen constructive efforts on these and other issues.”

    Kerry said Wednesday that U.S. diplomats had since had several meetings with their Chinese counterparts, “and we will be talking very shortly.”

    Loss and damage

    Government ministers and negotiators from nearly 200 countries agreed at COP27 to create a new fund to compensate poor nations for the “loss and damage” they’re experiencing as a result of extreme weather worsened by climate change.

    The summit made history as the first to see the topic of loss and damage funding formally make it onto the COP27 agenda — 30 years after the issue was first raised by climate-vulnerable countries.

    Speaking ahead of COP27, Kerry said Washington would not be “obstructing” talks on loss and damage in Sharm el-Sheikh. His comments meant that, for the first time ever, the U.S. was finally willing to discuss reparations at the U.N. climate conference.

    Asked how much the loss and damage fund is worth and where the money will come from, Kerry replied, “Those questions are legitimate, but they were all left specifically to the process this year to try and provide the answers to those things.”

    Kerry said it is typically the case that the countries least responsible for the climate crisis were being hit the hardest by its impacts.

    “You don’t have to work hard, unless you have no heart and no brain, to understand the degree to which justice is critical, inclusivity is critical, and action is critical. Urgent action to begin to reduce those emissions fast enough that we do what the scientists are telling us we must do which is avoid the worst consequences of the crisis,” Kerry said.

    “We only avoid the worst consequences if we can hold the Earth’s temperature increase to 1.5 degrees — and we’re on the edge,” he continued.

    “There are some scientists who will tell you we have already blown past it, there are some who will tell you, ‘no, we may be to have a little overshoot but we can do a claw back and come back and hold onto the 1.5.’ All I know is we’re not on track for 1.5, we should be, we need to be, and we need to do everything in our power to move in that direction,” Kerry said.

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  • Credit Suisse CEO says outflows have reduced ‘very significantly’ as overhaul progresses

    Credit Suisse CEO says outflows have reduced ‘very significantly’ as overhaul progresses

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    Switzerland’s second largest bank Credit Suisse is seen here next to a Swiss flag in downtown Geneva.

    Fabrice Coffrini | AFP | Getty Images

    Credit Suisse is seeing a sharp reduction in client outflows, as the embattled Swiss lender progresses with its major strategic overhaul, new CEO Ulrich Koerner told CNBC on Wednesday.

    The bank in November projected a $1.6 billion fourth-quarter loss after announcing a raft of measures to address persistent underperformance in its investment bank and a series of risk and compliance failures. It also revealed at the time that it had continued to experience substantial net asset outflows.

    “The outflows, as we said, have reduced very significantly, and we are seeing now money coming back in different parts of the firm,” Koerner said on the sidelines of the World Economic Forum in Davos, Switzerland.

    As part of the overhaul, Credit Suisse shareholders in November greenlit a $4.2 billion capital raise, including a new private share offering that will see the Saudi National Bank become the largest interest holder, with a 9.9% stake.

    Koerner said the transformation towards a “new Credit Suisse” was going well.

    “We laid out a very clear plan, and we talked to all different stakeholder groups in the last three months, as you would expect,” he said.

    “I think the plan, the strategy resonates very much. We are in full execution swing, so I think we are making really good progress.”

    Credit Suisse has also reached out to tens of thousands of clients in Switzerland and around the world for feedback, Koerner said.

    “That has generated very positive momentum, and I think this is momentum that travels with us through 2023,” he added.

    ‘Zero concerns’ over Klein business acquisition

    Koerner confirmed that the reported departure of 10% of Credit Suisse’s investment bankers in Europe was part of its previously announced plans to cut 2,700 jobs by 2023 and reduce headcount by a total 9,000 by 2025.

    As part of the overhaul, Credit Suisse will spin off and rebrand its U.S. investment banking division as CS First Boston. The new unit will be headed by former Credit Suisse board member Michael Klein. Credit Suisse is reportedly on the verge of buying Klein’s boutique investment advisory firm.

    A more normalized interest rate environment is much better for the world, Credit Suisse CEO Körner says

    Koerner insisted that he had “zero concerns” about conflicts of interest, stressing that the bank could deal with the situation “in the utmost professional way.”

    “I am really looking forward for Michael to join, because Michael is an excellent banker, he is an excellent dealmaker, and he is very entrepreneurial, and that is why I want to go together with him on a journey.”

    U.S. investor Harris Associates has more than halved its stake in Credit Suisse since June 2022. Koerner said he could not judge the firm for its timing, but “we will certainly have discussions.”

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  • China’s economy will be ‘on fire’ in the second half of 2023, StanChart chairman says

    China’s economy will be ‘on fire’ in the second half of 2023, StanChart chairman says

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    Standard Chartered Bank (SCB) in downtown, brand logo and office building in Shanghai.

    Andy Feng | iStock Editorial | Getty Images

    China’s economy will be “on fire” in the second half of 2023 as the economic performance of East and West diverges, according to Standard Chartered Chairman José Viñals.

    The reopening of the Chinese economy following several years of strict “zero-Covid” measures has buoyed sentiment among economists that the global growth and inflation picture may be less bleak than initially feared this year.

    OECD Secretary-General Mathias Cormann earlier this week said the reopening was “overwhelmingly positive” in the global fight to tackle sky-high inflation.

    Chinese GDP grew by just 3% in 2022, official figures revealed earlier this week, its second-slowest growth rate since 1976 and well below the government’s target of around 5.5%. However, shorter-term data indicated a quicker-than-expected recovery as pandemic-era measures are wound down.

    The reopening has proven tricky, with China reporting a huge rise in Covid cases and deaths in recent weeks.

    While acknowledging the human cost of the increased death toll, Viñals suggested that the resulting widespread immunity some analysts have suggested is emerging, in conjunction with the reopening of borders, will enable the economy to “surprise to the upside” in 2023.

    “In the second half of the year, I think that the Chinese economy is going to be on fire and that is going to be very, very important for the rest of the world,” he told CNBC at the World Economic Forum in Davos, Switzerland.

    “This is not just coming from the reopening from Covid but also coming from the support that the government is providing with their fiscal policy, support for the property sector which is extremely important, and also reducing the intensity of regulation or the regulatory crackdown on some sectors like the IT sector, so I think all of those things are going to be very important positives.”

    Emerging market resurgence

    As well as a contrast between global economic performance in the first and second half of the year, Viñals also suggested that there will be a divergence between the eastern and western hemispheres, with Asia and the Middle East driving global growth in 2023.

    Read more about China from CNBC Pro

    Despite the Federal Reserve‘s aggressive monetary policy tightening and a strong U.S. dollar in 2022, emerging market economies in large part proved surprisingly resilient.

    Viñals said the structural improvements that helped insulate many EM economies would also enable them to flourish in years to come.

    “Not all emerging markets are created equal and they have very different exposures to the higher dollar and higher interest rates in the United States, and those who are more affected negatively are those which have high foreign currency indebtedness,” he said.

    China's economy will continue to struggle, says wealth management firm

    “There are a number of low income countries and lower middle income countries which have definitely gone into difficulties, but for the vast majority of emerging markets, things are going well.”

    He pointed in particular to India and some of the Southeast Asian nations that suffered a ripple effect during the “taper tantrum” in 2013, in which a sharp sell-off in markets prompted the Fed to slow the pace of Treasury sales.

    “I think that the improvement in the fundamentals of emerging markets, the improvement in the accumulation of foreign exchange reserves, better economic policies, better governance, all of that helps attract confidence or preserve confidence and I think that is a big plus for them,” Viñals said.

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  • ‘Big Oil peddled the big lie’: UN chief slams energy giants for ignoring their own climate science

    ‘Big Oil peddled the big lie’: UN chief slams energy giants for ignoring their own climate science

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    U.N. Secretary-General Antonio Guterres said that without further action, humanity was on course for a global temperature increase of 2.8 degrees Ceslius.

    Sean Gallup | Getty Images News | Getty Images

    U.N. Secretary-General Antonio Guterres on Wednesday condemned fossil fuel giants for ignoring their own climate science, accusing the oil and gas industry of seeking to expand production despite knowing “full well” that their business model is incompatible with human survival.

    “Some in Big Oil peddled the big lie,” Guterres said during a special address at the World Economic Forum in Davos, Switzerland. “And like the tobacco industry, those responsible must be held to account.”

    His comments come shortly after research showed how Exxon Mobil, one of the world’s largest oil companies, accurately forecast global heating as long ago as the 1970s only to then spend decades publicly contradicting their own research.

    The study, published last week in the journal Science, said that Exxon’s private projections of global temperature rise were often more accurate than world-leading NASA scientists. Exxon has since denied the accusations.

    Research papers have previously found that Exxon was aware of the dangers of global heating since the late 1970s, while other oil industry bodies knew of the risks associated with burning fossil fuels since at least the 1950s.

    The burning of fossil fuels, such as coal, oil and gas, is the chief driver of the climate emergency.

    “Every week brings a new climate horror story,” Guterres said, warning that the commitment to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels was “going up in smoke.” This temperature threshold is the aspirational target set in the landmark 2015 Paris Agreement.

    It is recognized as crucial because beyond this level, so-called tipping points become more likely. These are thresholds at which small changes can lead to dramatic shifts in Earth’s entire life support system.

    Guterres said that without further action, humanity was on course for a global temperature increase of 2.8 degrees Celsius.

    “The consequences will be devastating. Several parts of our planet will be uninhabitable. And for many, this is a death sentence,” he said.

    “But it is not a surprise,” Guterres said. “The science has been clear for decades. I am not talking only about U.N. scientists. I am talking even about fossil fuel scientists.”

    U.N. Secretary-General Antonio Guterres recently called out what he described as the “massive public relations machine raking in billions to shield the fossil fuel industry from scrutiny.”

    Sean Gallup | Getty Images News | Getty Images

    Referring to the research published in Science last week, Guterres said, “Just like the tobacco industry, they rode rough-shod over their own science.”

    “Today, fossil fuel producers and their enablers are still racing to expand production, knowing full well that this business model is inconsistent with human survival,” he continued.

    “Now, this insanity belongs in science-fiction, yet we know the ecosystem meltdown is cold, hard scientific fact.”

    The world’s leading climate scientists warned last year that the fight to keep global temperature rise under 1.5 degrees Celsius had reached “now or never” territory. The U.N.’s Intergovernmental Panel on Climate Change reaffirmed calls for a substantial reduction in fossil fuel use to curb global heating.

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  • Second half of the year will be better as China surprises to the upside: Standard Chartered

    Second half of the year will be better as China surprises to the upside: Standard Chartered

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    José Viñals, chairman of Standard Chartered, says Asia and the Middle East will drive growth this year, with China’s reopening also providing a boost.

    08:34

    Wed, Jan 18 20234:55 AM EST

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