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WTO slashes global trade growth forecast; Accelerating U.S. Consumer Prices — Macro Snapshot

RIYADH: The impact of the Russian-Ukrainian war pushed up consumer price levels in the United States last month, as the cost of gasoline hit record highs, squeezed incomes in the Great Britain despite unemployment falling to its lowest in 50 years and led to a revision of the World Trade organization’s global growth forecast from 4.7 to 3 percent this year.

Retail inflation in India has accelerated to its highest level in 17 months, and inflation in Argentina is expected to reach its highest growth this year. Sri Lanka temporarily suspended external debt payments and Chinese export growth likely slowed, while Australia’s trade conditions picked up in March.

Retail inflation in India

Retail price inflation in India accelerated to almost 7% year-on-year in March, its highest level in 17 months and above the upper limit of the central bank’s tolerance band for a third consecutive month, which forced it to raise its key rates.

Annual inflation based on consumer prices in March reached 6.95%, pushed by higher prices for petroleum products and some food products. The figure was above economists’ forecast of 6.35% year-on-year in a Reuters poll and 6.07% the previous month.

March inflation in Argentina

Argentina’s inflation rate in March will exceed 6% to reach the strongest monthly consumer price growth since the start of the year, the economy minister said on Monday, as the country struggles to struggling with a long period of soaring costs for many goods and services.

“The (consumer price) index will exceed 6%, it will be the highest of the year,” Economy Minister Martin Guzman said in an interview with local channel C5N. He added that international market pressures were also weighing on the South American country’s price rise.

Annual inflation this year is estimated at around 60%, according to the bank.

Consumer prices in the United States

U.S. monthly consumer prices rose the most in 16½ years in March as Russia’s war on Ukraine pushed the cost of gasoline to record highs, arguing in favor of a 50 basis point interest rate hike from the Federal Reserve next month.

The consumer price index jumped 1.2% last month, the biggest monthly increase since September 2005, the Labor Department said Tuesday. The CPI rose 0.8% in February.

WTO lowers growth forecast

The World Trade Organization on Tuesday revised down its forecast for world trade growth this year to 3% from 4.7% due to the impact of the Russian-Ukrainian war, and warned of a potential food crisis caused by soaring prices.

The report from the global trade watchdog said the dispute, now in its seventh week, had damaged the global economy at a critical time as the coronavirus pandemic – and Chinese lockdowns in particular – continue to weigh on the recovery.

“The economic repercussions of this conflict will extend far beyond Ukraine’s borders,” WTO Director-General Ngozi Okonjo-Iweala said at a press conference presenting the findings.

UK unemployment rate lowest since 2019

Britons’ incomes fell the most since 2013 in February, after adjusting for soaring inflation, despite unemployment falling to its lowest in nearly 50 years, underscoring the challenges facing the Bank of ‘England.

The unemployment rate fell to 3.8% in the three months to February, from 3.9% previously, according to official figures, matching a rate last seen at the end of 2019 and which has not been lower. since 1974.

Annual growth in average non-bonus earnings fell from 3.8% to 4%, but remained below the rise in inflation – which reached 6.2% in February – and led to a decline of 1. 3% of its true value, the Office for National Statistics said.

“Soaring inflation casts a large shadow over an otherwise buoyant labor market,” said Nye Cominetti, an economist at the Resolution Foundation think tank.

Sri Lanka suspends debt payments

Sri Lanka will temporarily suspend external debt payments to avoid a default, the central bank governor said on Tuesday, with its limited foreign exchange reserves needed for imports of essential items such as fuel.

“It has come to a point where paying off the debt is difficult and impossible. The best action that can be taken is to restructure the debt and avoid default, Governor P. Nandalal Weerasinghe told reporters.

Sri Lanka is due to begin talks with the International Monetary Fund on a loan program next week as the country suffers from prolonged power cuts as well as food and medicine shortages.

China’s trade growth

China’s export growth likely slowed in March as the war in Ukraine dampened global demand, while imports likely fell amid signs that widespread anti-COVID lockdowns have weakened domestic consumption, it revealed on Tuesday. a Reuters poll.

Exports likely rose 13% in March, from a year earlier, compared with 16.3% year-on-year growth for the January-February period, according to a median forecast from a Reuters poll of 19 economists .

Imports in March were estimated to be 8% higher than a year earlier, according to the survey, down from the 15.5% growth seen in the first two months of the year. The slowdown in growth was partly due to sluggish domestic demand and production disruptions, both caused by the ongoing COVID-19 outbreaks, analysts said.

Chinese economic data for January and February are often combined to remove distortions caused by the shift in the Lunar New Year holiday schedule.

Poll economists expect a trade surplus of $22.4 billion in March, up from $13.8 billion a year earlier.

Trade data will be released on Wednesday.

Australia business terms

A measure of Australian business conditions rebounded sharply in March as businesses reported strong sales and labor conditions, while soaring costs pushed retail prices higher in a worrying sign for inflation.

Tuesday’s National Australia Bank survey showed its business conditions index doubled to +18 in March, while confidence added 3 points to +16.

The upbeat result is likely to be welcomed by Prime Minister Scott Morrison, who is in the midst of a tough election campaign.

Inflation expectations remained elevated at 5.8%, reflecting cost of living pressures from gasoline, food and housing.

All that price foam has yet to deter buyers, with the ABC’s measure of household spending intentions jumping 9.2% in March to a record high, driven by travel, transport and retail.

The strength in spending, combined with a 13-year low for unemployment, suggests that the economy as a whole put in a strong performance in the first quarter.