Headlines

Emerging market economic growth will fall to its weakest level since the height of the global financial crisis this year, according to the IMF, in a big cut to its forecasts, the Financial Times reported. Full year emerging market-wide growth is projected to come in at 4.1 per cent, a decade low and the second-weakest figure since the dotcom bust of 2002, rather than the 4.4 per cent the IMF pencilled in as recently as April. The gloomy forecast is just the latest in a series of swingeing downgrades by the Washington-based body.

Oman’s bond investors gained some respite this week as Fitch affirmed its rating for the indebted country and the government published encouraging deficit figures, potentially paving the way for the Gulf oil producer’s next debt sale, Reuters reported. Rated junk by all three major rating agencies, Oman has relied heavily on borrowing over the past few years to spur growth and refill its coffers – depleted because of lower oil prices.

Mario Draghi has three months to cement his impressive legacy at the European Central Bank. He is widely expected to preside over further easing in monetary policy before his departure, the Financial Times reported. The only uncertainty is exactly when, and which precise parts of the crisis toolkit will be deployed again. He should act soon, and he should use all tools at the ECB’s disposal. Anything less risks shackling the eurozone economy to a further period of weak growth and low inflation. Mr Draghi’s June speech at the ECB’s annual symposium in Sintra marked a turning point.

Heavily indebted Lebanon has passed a budget seen as a “first step” towards fixing its public finances but still has much to do to steer the country away from crisis. Investors are waiting to see if Gulf Arabs will offer a lifeline that may provide some breathing space, Reuters reported. Lebanon has one of the world’s heaviest public debt burdens, after years of big budget deficits rooted in waste, corruption, and sectarian politics.

A JPMorgan Chase & Co. unit violated India’s foreign investment rules and helped property developer Amrapali Group divert funds from realty projects, the nation’s Supreme Court said in a ruling and ordered an investigation, Bloomberg News reported. The court on Tuesday ordered the federal anti-money laundering agency to investigate Amrapali, based in Noida, near New Delhi, for diverting funds overseas with the help of JPMorgan and others.

The South African government’s decision to increase support for the embattled state power utility is wreaking havoc on the nation’s finances and may force it to increase borrowing and raise the budget deficit, Bloomberg News reported. Finance Minister Tito Mboweni told lawmakers in Cape Town on Tuesday that Eskom Holdings SOC Ltd. will get 26 billion rand ($1.9 billion) this financial year and 33 billion in 2020-21 to help it remain solvent. The additional bailout comes just five months after he announced a three-year 69 billion-rand cash injection for the utility.

Heraeus’s quartz glass works in Bitterfeld and Nemak’s auto supplies plant in Wernigerode have little in common, outwardly at least, the Financial Times reported. But both have resorted to the same unusual manoeuvre to cope with Germany’s industrial slowdown. The three are among dozens of companies that have imposed “short-time work” on their employees, in what economists say could be the harbinger of trouble in the German labour market. Germany is in its tenth straight year of economic growth, with unemployment close to a record post-reunification low.

South Africa’s High Court on Tuesday has ordered the Zambian government to halt the sale of Vedanta Resources’s majority-owned Konkola Copper Mines (KCM) until a final decision is made through arbitration, Reuters reported. Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by Zambia’s state mining company ZCCM and the rest by Vedanta. Zambia accused KCM of breaching the terms of its licence.

Greece unveiled on Monday a plan to overhaul loss-making state-controlled Public Power Corp. (PPC) to shore up its finances, including voluntary redundancies and selling shares in its distribution network, Reuters reported. PPC, which is 51% owned by the state, has been struggling to collect part of more than 2.4 billion euros ($2.7 billion) of arrears from bills left unpaid during the country’s debt crisis, which began in late 2009.

Core European government bond yields steadied on Monday after posting their biggest weekly drop in seven weeks as investors consolidated positions before a central bank policy meeting this week where policymakers might unveil plans of more rate cuts, Reuters reported. Though hopes have grown that the ECB might cut its deposit rate as soon as Thursday to soften the impact on the euro from a much-awaited Fed rate cut, market watchers say policymakers will change its forward guidance before taking fresh steps.