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Argentina has new economy minister after abrupt resignation – Financial Post

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BUENOS AIRES (AP) — Argentina got a new economy minister late Sunday, a day after the abrupt resignation of her predecessor shook the governing coalition at a time it was already facinga crisis of unity.

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Gabriela Cerruti, the presidency’s spokesperson, wrote on Twitter late Sunday that Silvina Batakis will now head the Economy Ministry, replacing Martin Guzman.

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The pick could be crucial for the administration of President Alberto Fernandez as it faces sharp internal divisions while Argentina is undergoing economic turmoil.

Batakis will be responsible for managing an economy burdened with inflation running at an annual rate above 60% and will play a key role in determining the future of the country’s recent deal with the International Monetary Fund to restructure $44 billion in debt. Many left-leaning members of the governing coalition oppose the IMF agreement.

Batakis was the economy minister of Buenos Aires province, the country’s most populous district, from 2011 to 2015 under then-Gov. Daniel Scioli, who was recently named the federal production minister.

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Guzman quit unexpectedly Saturday, posting his seven-page resignation letter on Twitter, and apponting a successor before the markets opened Monday was seen as particularly important to avoid a further slide by Argentina’s peso, which recently hit an all-time low against the dollar.

The economy also has been disrupted by trucker strikes over shortage of diesel.

Guzman was largely unknown when he became minister and was seen as a moderate in the governing coalition, which includes more left-leaning elements allied with Vice President Cristina Fernandez, a former president who still has a strong base of support.

Batakis, on the other hand, has a long history of public service and is seen as close to the vice president and her allies.

The vice president, who is not related to the president, has recently taken to publicly criticizing the administration’s economic policies in high-profile speeches that have put a spotlight on the rifts within the governing coalition.

Guzman’s resignation letter, which was released as the vice president was giving a speech in which she again criticized economic policy, suggested he stepped down at least in part due to a lack of political support.

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Economy

China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

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China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.

That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.

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German Business Outlook Hits One-Year High as Economy Heals

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German business sentiment improved to its highest level in a year — reinforcing recent signs that Europe’s largest economy is exiting two years of struggles.

An expectations gauge by the Ifo institute rose to 89.9. in April from a revised 87.7 the previous month. That exceeds the 88.9 median forecast in a Bloomberg survey. A measure of current conditions also advanced.

“Sentiment has improved at companies in Germany,” Ifo President Clemens Fuest said. “Companies were more satisfied with their current business. Their expectations also brightened. The economy is stabilizing, especially thanks to service providers.”

A stronger global economy and the prospect of looser monetary policy in the euro zone are helping drag Germany out of the malaise that set in following Russia’s attack on Ukraine. European Central Bank President Christine Lagarde said last week that the country may have “turned the corner,” while Chancellor Olaf Scholz has also expressed optimism, citing record employment and retreating inflation.

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There’s been a particular shift in the data in recent weeks, with the Bundesbank now estimating that output rose in the first quarter, having only a month ago foreseen a contraction that would have ushered in a first recession since the pandemic.

Even so, the start of the year “didn’t go great,” according to Fuest.

“What we’re seeing at the moment confirms the forecasts, which are saying that growth will be weak in Germany, but at least it won’t be negative,” he told Bloomberg Television. “So this is the stabilization we expected. It’s not a complete recovery. But at least it’s a start.”

Monthly purchasing managers’ surveys for April brought more cheer this week as Germany returned to expansion for the first time since June 2023. Weak spots remain, however — notably in industry, which is still mired in a slump that’s being offset by a surge in services activity.

“We see an improving worldwide economy,” Fuest said. “But this doesn’t seem to reach German manufacturing, which is puzzling in a way.”

Germany, which was the only Group of Seven economy to shrink last year and has been weighing on the wider region, helped private-sector output in the 20-nation euro area strengthen this month, S&P Global said.

–With assistance from Joel Rinneby, Kristian Siedenburg and Francine Lacqua.

(Updates with more comments from Fuest starting in sixth paragraph.)

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Parallel economy: How Russia is defying the West’s boycott

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When Moscow resident Zoya, 62, was planning a trip to Italy to visit her daughter last August, she saw the perfect opportunity to buy the Apple Watch she had long dreamed of owning.

Officially, Apple does not sell its products in Russia.

The California-based tech giant was one of the first companies to announce it would exit the country in response to Russian President Vladimir Putin’s full-scale invasion of Ukraine on February 24, 2022.

But the week before her trip, Zoya made a surprise discovery while browsing Yandex.Market, one of several Russian answers to Amazon, where she regularly shops.

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Not only was the Apple Watch available for sale on the website, it was cheaper than in Italy.

Zoya bought the watch without a moment’s delay.

The serial code on the watch that was delivered to her home confirmed that it was manufactured by Apple in 2022 and intended for sale in the United States.

“In the store, they explained to me that these are genuine Apple products entering Russia through parallel imports,” Zoya, who asked to be only referred to by her first name, told Al Jazeera.

“I thought it was much easier to buy online than searching for a store in an unfamiliar country.”

Nearly 1,400 companies, including many of the most internationally recognisable brands, have since February 2022 announced that they would cease or dial back their operations in Russia in protest of Moscow’s military aggression against Ukraine.

But two years after the invasion, many of these companies’ products are still widely sold in Russia, in many cases in violation of Western-led sanctions, a months-long investigation by Al Jazeera has found.

Aided by the Russian government’s legalisation of parallel imports, Russian businesses have established a network of alternative supply chains to import restricted goods through third countries.

The companies that make the products have been either unwilling or unable to clamp down on these unofficial distribution networks.

 

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