Headlines

The International Monetary Fund issued a report that consumer-price inflation in Venezuela is forecast to hit 480 percent this year and top 1,640 percent in 2017, the Wall Street Journal reported today. As Caracas extends its declared state of economic emergency, many economists say that the nation will soon have to ask the IMF for a bailout. It’s gotten so bad, the government this month handed over control of food stocks to the military, ceding even more power to the armed forces.

The Inhauma shipyard in Brazil is the latest to succumb to a crisis that has wiped out nearly half of the country’s naval industry jobs in the past two years, leaving companies bankrupt and creditors unpaid, Bloomberg News reported today. State-controlled Petroleo Brasileiro SA, which had agreed to pay more to have platforms built at home to help jump-start the naval industry, is now sending work back to Asia, underscoring the vulnerabilities of an industry that basically relies on a single client.

India begins its four-week monsoon session of parliament today, with prime minister Narendra Modi’s government hoping to move ahead with long-awaited tax reforms to turn the country into a genuine single market, the Financial Times reported today. The adoption of a goods and services tax, or GST — to replace a raft of different state and local taxes with a single unified value added tax system — is seen as potentially transformative for India’s economy.

Commodities from the developing world worth billions of dollars are being exported illicitly every year through misinvoicing, denying governments revenue that would in many countries exceed their inward foreign direct investment, according to research commissioned by the UN, the Financial Times reported today. Experts believe the majority of misinvoicing, which is recording different values in the exporting and importing countries, is illegal activity, designed to evade tax and foreign exchange payments.

The Czech corruption police investigate the financial management of the OKD black-coal mining company, which was declared insolvent in May and has debts worth billions of crowns, the Czech News Agency has found in the insolvency register. Detectives from the Squad for Uncovering Organised Crime (UOOZ) are looking into suspicious transactions of OKD and the owner of the NWR Holdings B.V., which owns OKD. The police have asked for documentation on OKD financial management, according to OKD insolvency administrator Leo Louda.

Saudi Arabia’s non-oil economy has slipped into a technical recession for the first time since the 1980s, compounding the woes of a country already grappling with an oil sector pummelled by low prices, the Financial Times reported. The country’s non-oil sector contracted 0.7 per cent year on year in the first three months of 2016, according to official data. This follows on from a weak fourth quarter of 2015, which the country’s statistics agency has now revised to show a 0.5 per cent year-on-year fall in non-oil output, rather than the 3.5 per cent rise originally reported.

Distressed debt funds will become big shareholders in troubled oil firm Gulf Keystone after bondholders agreed to swap $500 million of debt for equity, wiping out some of the world's top funds as shareholders, Reuters reported. Gulf Keystone operates the giant Shaikan oil field in Iraqi Kurdistan and produces about 40,000 barrels per day (bpd). The firm has been fighting to avoid insolvency after low oil prices and overdue oil export payments from the Kurdistan regional government crippled its balance sheet.

China is weighing how to consolidate financial regulation, following missteps that exacerbated market turmoil and embarrassed Beijing. One option under consideration would empower the central bank, as other countries have done in times of risk, The Wall Street Journal reported. The government has a number of tools for reining in its often freewheeling markets and managing its economy, and it hasn’t shied from using them. But its credibility has been hurt by violent swings in the stock market and unexpected devaluations of the currency over the past year.

The biggest bank in Europe’s most robust economy may seem an unlikely victim of Brexit. Yet in the fortnight after Britons voted to quit the European Union Deutsche Bank’s share price tumbled by 27%—putting Germany’s biggest lender in the unexalted company of British and Italian banks, The Economist reported. On July 7th it slid to €11.36 ($12.58), a record low. The price has since clambered back towards €13. But Deutsche still trades at only a quarter of the supposed net value of its assets—far behind its peers.

Oi SA is sticking to its year-end goals of tripling subscribers who use multiple services and boosting investments by 25 percent even as the phone carrier works through Brazil’s biggest-ever bankruptcy, Chief Executive Officer Marco Schroeder said, Bloomberg News reported. The company is current in payments to suppliers and aims to continue on that front to guarantee service to customers during the bankruptcy process, Schroeder said in his first-sit down interview since taking the helm of the Rio de Janeiro-based operator a month ago.