Global News August 29, 2018

  1. BBC
  2. Global News August 29, 2018

“Argentina Asks IMF to Quicken Payments From $50 Billion Line.”

Argentine President Mauricio Macri asked the International Monetary Fund to speed up disbursements from its $50 billion credit line to ease the nation’s financial crisis.
The request reflects the pressure policy makers are under to reassure investors that the government will have enough money to fund itself through next year without incurring more debt. The country’s borrowing costs soared in recent months as it heads for its second recession in three years with inflation above 30 percent and the world’s highest interest rates.
Macri is in a jam almost three years after taking over from a socialist government with a pledge to normalize the economy and restore growth, facing down massive fiscal and current-account deficits that have spooked investors. While officials had wagered that obtaining the IMF credit line in June would calm nerves and buy the government some time, the selloff in Argentina’s currency has continued — it’s now down 40 percent this year — putting pressure on inflation and threatening to throttle growth.
IMF officials didn’t respond to requests for comment on Macri’s statement, nor did they issue their own communique.
Argentina received the first $15 billion disbursement from the IMF in June and the government was expecting to get an additional $3 billion in September. Macri didn’t say how much he had requested from the fund. IMF economists and technicians are in Argentina this week in meetings with government members to review portions of the agreement.


“U.S. second-quarter GDP growth raised to 4.2 percent; consumer spending cut.”

U.S. economic growth was a bit stronger than initially thought in the second quarter, notching its best performance in nearly four years and putting the economy on track to hit the Trump administration’s goal of 3 percent annual growth.
Gross domestic product increased at a 4.2 percent annualized rate, the Commerce Department said on Wednesday in its second estimate of GDP growth for the April-June quarter. That was slightly up from the 4.1 percent pace of expansion reported in July and was the fastest rate since the third quarter of 2014.
The slight upward revision to growth last quarter reflected more business spending on software than previously estimated and less imports of petroleum. Stronger software spending and a smaller import bill offset a downward revision to consumer spending.
Compared to the second quarter of 2017, the economy grew 2.9 percent instead of the previously reported 2.8 percent. Output expanded 3.2 percent in the first half of 2018, rather than the 3.1 percent estimated last month. The Trump administration has set a target of 3 percent annual growth, which economists say is unsustainable because of structural constraints.
Robust growth in the second quarter was driven by one-off factors such as a $1.5 trillion tax cut package, which provided a jolt to consumer spending after a lackluster first quarter, and a front-loading of soybean exports to China to beat retaliatory trade tariffs.
There are signs some of the momentum was lost early in the third quarter. The government reported on Tuesday that the goods trade deficit jumped 6.3 percent to $72.2 billion in July as a 6.7 percent plunge in food shipments weighed on exports.


BBC News
“Russia’s Putin softens pension reforms after outcry.”

Russian leader Vladimir Putin has softened planned pension changes following angry protests and a slump in his approval rating. He said the retirement age for women would be increased from 55 to 60 instead of to 63. But a five-year increase for men, to 65, would stay.
In a rare TV address, Mr Putin said the country’s working-age population was shrinking, making change essential. Unions have warned that many will not live long enough to claim a pension. Russian men have a life expectancy of 66 while for women it is 77, the World Health Organization says.
The issue has seen support for Mr Putin fall to 64% from 80%, according to VTsIOM state pollster. Mr Putin said the move to raise the retirement age for men and women had been delayed for years and risked causing inflation and increasing poverty.
Postponing it further would threaten the stability and security of Russian society, he said. «Any further delay would be irresponsible. Our decisions should be just and well-balanced,» he added.
Under the new plan, to be implemented from 2019, the retirement age for men will be increased gradually from 60 to 65. Before Mr Putin’s intervention women were to have to work another eight years from 55 to 63 – their planned retirement age has now been reduced to 60.


“Technology Shares Advance, Pound Strengthens.”

U.S. stocks held at fresh records, with technology shares pacing gains, as investors awaited the next developments on trade. The pound rallied after the European Union revived hopes of a Brexit deal before the U.K. exits the common area in March.
The S&P 500 Index churned near 2,900, a level it first breached Tuesday, as and Alphabet rose following an upbeat report from Morgan Stanley. Data that showed strength in the American economy bolstered the greenback. Emerging-market assets were under pressure and Treasuries edged higher.
Earlier, shares in Japan and Australia set the pace as the MSCI Asia Pacific Index climbed, though stocks in China dropped. The pound was steady as traders weighed news that the deadline for a Brexit deal may slip. The euro weakened after the Italian government was reported to be hoping for a new program of European Central Bank bond purchases.
Investors appear to lack some conviction as the Northern hemisphere’s traditional vacation period grinds to a close. U.S. stocks remain at an all-time high, while the rest of the world has been playing a gradual game of catch-up. However risks abound, from legal threats to President Trump’s administration and turmoil in emerging markets to ongoing trade tension between the world’s major economies.
Elsewhere, the Australian dollar dropped with bond yields as expectations for central bank interest-rate increases were slashed. Emerging-market currencies retreated as Turkey’s lira fell a third day.