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Ties that bind the global economy are unraveling at a frightening pace – Economic Times

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Industrial output and retail sales in China slumped, indicating the government’s strict Covid Zero policy is causing the world’s second-largest economy to buckle and helping explain a larger-than-expected cut in a key interest rate.

In the US, firmer retail sales suggest consumers aren’t yet deterred by higher inflation, though increased

on credit cards may temper the optimism. The UK is suffering from its worst inflationary pressures in 40 years.

Russia’s gross domestic product rose at a slower pace in the first quarter, hindered by the initial impact of sanctions, and its central bank sees the economy shrinking as much as 10% this year.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

Asia

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China’s economy is paying the price for the nation’s Covid Zero policy, with industrial output and consumer spending sliding to the worst levels since the pandemic began and analysts warning of no quick recovery.

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Chinese banks cut a key interest rate for long-term loans by a record amount, a move that would reduce mortgage costs and may help counter weak loan demand caused by a property slump and Covid lockdowns. The five-year loan prime rate, a reference for home mortgages, was lowered to 4.45% from 4.6%, according to a statement by the People’s Bank of China.

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Japan’s cabinet approved a 2.7 trillion yen ($21 billion) additional budget to help households and firms hit by higher prices, as the government looked to shore up support ahead of a key summer election.

World

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The ties that bind the global economy together, and delivered goods in abundance across the world, are unraveling at a frightening pace.

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The global shipping bottlenecks rattling industries and consumers in the pandemic era were plain to see for the politicians, economists and investors gathering for a Latin American economic forum in Panama this week. There were 101 vessels waiting their turn to make the 40-mile journey across the Panama Canal Wednesday, six more than the average so far this year, according to data compiled by Bloomberg.

US

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Recent gains in overall retail sales, combined with solid earnings reports from retailers, foreshadow strong second-quarter consumption and suggest consumers aren’t yet deterred by higher inflation. But the spending binge — fueled more recently by increased credit card use — might not last.

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Like a supertanker, US debt-service costs only change course very slowly. But it’s happening now — and from Washington’s point of view, the new direction is the wrong one: they’re heading up.

Europe

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Britain’s worst bout of inflation in 40 years is quickly becoming a crisis both for Prime Minister Boris Johnson’s government and the Bank of England. Consumer prices surged 9% in the year through April, the fastest rate since March 1982, the Office for National Statistics said Wednesday in a report that marked a bleak moment for living standards.


Emerging Markets

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South Africa’s central bank this week raised borrowing costs by the most in more than six years, while Egypt delivered its largest hike in nearly half a decade to tackle soaring inflation. The Philippine central bank raised its key rate for the first time since 2018 and Paraguay lifted its benchmark to the highest level in more than a decade.

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Russia’s economic growth slowed in the first quarter, reflecting the initial impact of sanctions imposed following President Vladimir Putin’s invasion of Ukraine.

(With assistance from Maeva Cousin (Economist), Tom Orlik (Economist), Philip Aldrick, James Attwood, Bryce Baschuk, John Liu, Yujing Liu, Mirette Magdy, James Mayger, Liz Capo McCormick, Prinesha Naidoo, Olivia Rockeman, Zoe Schneeweiss, Yuko Takeo, Alex Tanzi and Lin Zhu)

(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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Minister Of The Economy Franz Fayot On Luxembourg’s Transition Towards A Green Economy – Forbes

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Just last week, Luxembourg’s Minister of the Economy, Franz Fayot, came to the cities of Toronto and Montreal as part of an economic mission organized by the Luxembourg Chamber of Commerce in close cooperation with the Ministry of the Economy. I had the opportunity to sit down with Minister Fayot at the InterContinental Toronto Centre, and get some insights into the Grand-Duchy’s economic transition towards sustainability.

A transitioning economy

With up to one-third of its GDP related to the finance sector, Luxembourg’s economy is widely dominated by the financial sector. However, the past 20 years have been characterized by a push for economic diversification, and increased transparency and regulations following the financial crisis, said Minister Fayot.

“What we are trying to do is diversify [the economy] even more into new sectors to make us less dependent on the financial sector and adaptable to new circumstances,” he said. “We are also more and more developing a green finance sustainable finance sector, which is doing very well.”

A green state responsibility

Minister Fayot, whose guiding principles are a strong welfare state and sustainability, firmly believes that the government must assume its pivotal role in shifting the economy towards sustainability — “both in terms of environmental sustainability, but also social sustainability,” he added.

In June 2020, an international consultation was launched to gather strategic spatial planning project ideas considering the climate-related challenges and social issues, and support for the country’s ecological transition towards a zero-carbon territory by 2050.

“We need to understand that we have to help businesses innovate, and invest in the future,” said Minister Fayot.

A rising startup ecosystem

Luxembourg has seen a steady growth in startups over the past decade.

Earlier this year, the Ministry of the Economy launched a strategic initiative aimed at providing a thorough understanding of the startup ecosystem based on data analysis and interviews with key stakeholders.

Luxinnovation, the national innovation agency, identified over 500 active startups offering innovative digital and data-driven solutions in its latest mapping.

These assessments will also provide relevant comparisons with international markets, and aim to identify the necessary next steps for development opportunities in the upcoming years.

“Our innovation agency is there to guide startups, but also other more established businesses, to get access to grants,” explained Minister Fayot. “We have a state aid framework in Europe which we have to comply with, but the main message is that there is an obvious need to co-finance innovation, particularly in times when we are in this transition towards a more green economy.”

Going above the limits of territory

Surrounded by Belgium, France and Germany, Luxembourg is one of the smallest countries in the world — slightly smaller than Rhode Island. Yet, despite its dependence on its neighboring countries’ energy supplies, it is making continuous efforts to increase its share of renewable energy by also investing in projects across its borders, said Minister Fayot.

“We don’t have that much sun in Luxembourg, and we don’t have an unlimited space to build wind power,” he said. “It’s a bit of a limiting factor, but it shouldn’t excuse anything.”

“We are investing a lot into energy efficiency,” he added. “We are trying to get people to e-mobility and pushing for geothermal heating and energy in new constructions.”

A growing space sector

Luxembourg might not be the first to come to mind when we think of space, but, the country owns one of the world-leading satellite operators, and is increasing its investment into space resources.

“The SpaceResources.lu is an initiative that we launched about six years ago, and it is very much focused on the space resources segment of the space industry,” he said. “We are not launching anything in space out of Luxembourg, but focusing on services like space traffic management.”

As part of the economic mission, a group of space companies participated in a distinctive program set up by the Luxembourg Space Agency in collaboration with the Canadian Space Agency. This included on-site company visits, workshops and B2B opportunities that led to the signing of a Memorandum of Understanding between the two national space agencies.

Stephanie Ricci contributed to this story.

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Edmonton needs a nighttime economic strategy, industry advocates say – CBC.ca

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Edmonton’s nighttime entertainment and hospitality venues need more support if the city is going to host big events like the Juno Awards next year, industry advocates say. 

At a meeting Wednesday, venue operators and business associations called on city councillors and administration to create a special office or person to directly support the nighttime industry. 

Puneeta McBryan, executive director of the Downtown Business Association, said the city’s existing economic development staff are overstretched on daytime operations alone, and said that nighttime industries need help. 

“Dedicated resources to this are absolutely essential,” McBryan told council’s executive committee. “We’re losing venues. If we haven’t already lost them, we’re at risk of losing them.”

McBryan said that potential gap in venues concerns her as Edmonton gets ready to host the Juno Awards next year. 

“I’m frankly really nervous about how many off-site venues we even have to host music events anymore, in our downtown,” she said. 

Ward papastew Coun. Michael Janz said he supports the idea of a nighttime economic office and echoed McBryan’s concerns about whether Edmonton will have sufficient spaces for the Junos next year. 

“One of the best parts about the Junos is not the awards, it’s the three weeks before and three weeks after when all the visiting artists are coming in and jamming out,” Janz said. 

Brent Oliver, a venue programmer and former manager of several music venues in Edmonton, spoke to the committee about the Junos, and said the event needs about a dozen spaces.

“It will likely be a stretch to try and get 11 or 12 venues at this point, and to try and also keep it walkable, I think is very important, which would mean trying to stay downtown,” he said. 

Dedicated office would help: advocates

Oliver also made the case to councillors for a designated nighttime economic office and strategy.

“Currently venues like the Starlite Room, theatres like the Citadel, bars and pubs along Jasper Ave. have to jump through various municipal and provincial departments to get permits, approvals, city support, enforcement and licensing,” he said.

He suggested a nighttime economy approach for the arts, sport and hospitality sectors would help businesses navigate issues around operating after work hours. 

“Our industry provides so much for Edmontonians and tourism, as well as a significant economic impact on the city,” he said. 

Organizers of music festivals, outdoor beer gardens and markets operating outside business hours have no one to call if there are last-minute or unforeseen questions in operating the event, McBryan said.

Oliver said after-hours issues became more obvious during the COVID-19 pandemic. 

“Many of my colleagues were left having to speak directly to city council members and elected officials to address issues of funding, safety and support,” he said.

Councillors directed city administration to report back ahead of the 2023-2026 budget cycle in the fall with a model to support the nighttime economy, and consider a designated person like a night mayor, as one of the potential options. 

Mayor Amarjeet Sohi acknowledged the need to develop the nighttime economy as part of a thriving city in entertainment, arts and culture. 

“And having more eyes on the street in the evening, on the weekends,” Sohi told reporters outside the meeting. “It is important that we have dedicated resources to support the growth of that sector.”

The Alberta government has recently allowed municipalities to create “entertainment districts” within a city, where there could be a suspension of open liquor laws, McBryan said. 

Other cities have nightlife economic strategies, a city report shows. 

Toronto has a nightlife action plan and the deputy mayor on council is the night economy ambassador, while Ottawa is developing a plan. 

Abroad, New York has a night mayor and Pittsburgh has a nighttime economy manager as well as action teams to address nighttime activities in public safety, hospitality, development, transportation, and personal accountability.

London, England, has an extensive strategy that includes a Night Czar, a post-pandemic plan with recommendations on visas, training, creative hubs, safety, and licensing, and a women’s night safety charter. 

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Economy

Copper Sinks Toward $8000 in Bleak Signal for Global Economy – Bloomberg

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Copper Sinks Toward $8000 in Bleak Signal for Global Economy  Bloomberg



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