Headlines

Global corporate profits in the third quarter are likely to fall for the first time in 18 months after record earnings in April-June, Reuters calculations showed, as the spreading COVID-19 Delta variant squeezes supply chains and raises labour costs. Massive fiscal stimulus to support economic recovery and loosened pandemic curbs generated high consumer demand in the second quarter, and companies contending with disrupted supplies and falling inventories raised prices to offset rising input costs.

The highly-infectious Delta variant has shut down factories in largely unvaccinated parts of Asia, throttling supply chains and contributing to rising consumer prices at a time when many thought the worst of Covid-19 supply disruptions were in the past, the Wall Street Journal reported. A gap has formed between the demand for goods in the well vaccinated U.S. and the capacity of sparsely vaccinated manufacturing countries to meet it, building inflationary pressure.

Not quite a decade ago, the potential for defective Takata Corp. air bags to explode in a crash erupted into the global auto industry’s most complex and far-reaching safety crisis in history. While roughly 100 million of them were recalled worldwide, more than 14 million as of early July still hadn’t been fixed in the U.S. alone, in addition to an unknown but likely substantial number in the rest of the world.

South Africa’s economy is 11% bigger than previously estimated, after statistics authorities changed the way they calculate gross domestic product, Bloomberg News reported. GDP at current prices measured 5.52 trillion rand ($369 billion) in 2020, compared with a previous estimate of 4.97 trillion rand, said Joe de Beer, deputy director-general of economic data at Statistics South Africa, told reporters Wednesday in the capital, Pretoria. The economy remains Africa’s second-biggest, lagging behind Nigeria.

Zimbabwe will use more than half of the $961 million allocated by the International Monetary Fund in the form of special drawing rights to support its beleaguered currency, Bloomberg News reported. The government abandoned a 1:1 peg between a precursor of the reintroduced Zimbabwe dollar and the greenback in February 2019. The currency now trades at 85.82 to the U.S. dollar and even lower on the black market, a plunge that’s made it difficult for the government to get it accepted locally, and it’s generally not tradable outside the country.

The World Bank said on Tuesday that it had halted disbursements of aid money to Afghanistan as it assesses how the Taliban plan to rule the country, the New York Times reported. A World Bank spokesperson said that the international development organization is “deeply concerned” about the situation in Afghanistan, particularly the impact that the new leadership will have on women in the country. The bank plans to monitor how the leadership transition proceeds and consult with the international community.

Laurentian University is asking for permission to extend its restructuring efforts into the new year, documents filed before the courts reveal, Sudbury.com reported. The university is in court once again Aug. 27, asking that the stay of proceedings protecting it against its creditors be extended until Jan. 31, 2022. At the same court date, Laurentian is also asking that the maturity date for more than $35 million in bridge financing loans also be extended until Jan. 31, 2022. The university announced Feb.

South Korea’s ballooning household debt set new records last quarter, offering support for views that the central bank will raise interest rates as early as this week to deflate a debt bubble, Bloomberg News reported. Total credit extended to households jumped 10.3% from a year earlier to 1,806 trillion won ($1.54 trillion), according to a Bank of Korea statement on Tuesday. The 169 trillion won increase marked the largest gain since data going back to 2003. From the previous three months, credit rose by 41.2 trillion won, the biggest increase for an April-June quarter.

Vice President Kamala Harris made the case for the U.S. to strengthen its economic ties with Southeast Asia during a two-day trip to Singapore, where she stressed the need to work with countries to ease supply-chain constraints as a surge of Covid-19 cases has hit factories in the region, the Wall Street Journal reported. Harris said Tuesday she discussed the supply-chain problems extensively with Prime Minister Lee Hsien Loong during their bilateral meetings.

Egypt will begin issuing sukuk, or sharia-compliant Islamic bonds, in the first half of 2022, the finance ministry said in a statement on Tuesday, Reuters reported. The exact timing and size of the first offering is yet to be determined. Executive regulations for a new law allowing for issuance of sukuk are expected in the next three months, and the government is planning to form a state-owned company to manage sukuk issuance. Returns on sukuk, which could be offered in local or foreign currency, would be taxed in the same way as Egyptian treasury bonds, the finance ministry said.