Headlines

Faced with slowing growth, persistent inflation and sagging investor confidence, India’s government is pinned between conflicting pressures: economists warn that tough steps are needed to avoid long-term fiscal problems, even as political leaders are leery of introducing unpopular measures before important elections this year, the International Herald Tribune reported.

Euro zone governments are discussing ways to help Ireland and Portugal return to the capital markets swiftly and some among them have voiced a preference for delaying the repayment of bailout loans by the two states, sources familiar with discussions said yesterday, the Irish Times reported. The sources quoted from a 15-page discussion paper from the European Commission and the European Stability Mechanism that was debated last week by deputy finance ministers from the euro zone.

An Italian political crisis that has rattled the euro zone deepened on Wednesday when two party leaders ruled out the most likely options to form a government and avoid a new election, Reuters reported. Populist leader Beppe Grillo slammed the door on overtures from centre-left boss Pier Luigi Bersani with a stream of insults while Nichi Vendola, Bersani's junior coalition partner, ruled out a government alliance with the centre-right.

Almost half of China’s provinces are setting their growth sights lower in the wake of the central government’s emphasis on the quality of expansion over speed, a sign of an increased focus on tackling rising debt, Bloomberg reported. Fourteen provinces have set lower targets for gross domestic product expansion this year than in 2012 and the other 17 left their goals unchanged, according to Nomura Holdings Inc. The weighted average target has dropped to 9.9 percent from 10.3 percent, Citigroup Inc. calculates.

Italy's political parties began testing the waters Tuesday to see whether they could cobble together a government, as the prospect of political stalemate sent European markets tumbling in fear of a reawakened euro-zone debt crisis, The Wall Street Journal reported. Democratic Party chief Pier Luigi Bersani said he would try to form a government in the hope of cobbling together some sort of parliamentary support. Mr. Bersani's center-left coalition will hold a majority of seats in Italy's lower house, but will control about one-third of the seats in the Senate.

Egypt seems to realise the money has nearly run out and it must turn to the IMF or a willing friend in the Gulf, where it now has just one, Qatar, Reuters reported. After months of delays, the Islamist government has produced a new plan to reverse a slide in its foreign currency reserves and tackle a budget deficit that could overwhelm a stable wealthy nation, let alone a country riven by political conflict. This plan relies on someone else stumping up to keep the Arab world's most populous nation afloat.

Last quarter, 7,221 Thai companies closed down, 27 percent higher than in the same period a year earlier, when the worst floods in 70 years swamped most of the country, Bloomberg reported. The figure is also more than double the average of 3,000 in the previous nine years, according to data from the National Economic & Social Development Board. Prime Minister Yingluck Shinawatra’s government raised the daily minimum wage to 300 baht throughout the country last month, after a similar increase in April in seven provinces including Bangkok.

China will rein in its shadow banking system by requiring banks to provide greater disclosure about their off-balance sheet activities, according to people briefed on the new rules, the Financial Times reported. The Chinese shadow banking system – credit flows beyond traditional bank loans – has quadrupled in size since 2008 to about Rmb20tn ($3.2tn), or 40 per cent of economic output. These flows were crucial in reviving the country’s growth last year. But banking analysts and rating agencies have warned that they pose an increasingly serious risk to Chinese economic stability.

Denmark, battling a stagnant economy and concerns about a productivity gap with other nations, is planning to slash its corporate taxes in phases over the next three years to better stack up against other countries in the region, The Wall Street Journal reported. The move, which follows similar tax cuts in the U.K., Sweden and Finland, comes as pressure is mounting on Prime Minister Helle Thorning-Schmidt, who was elected in 2011; support for her in opinion polls has been softening. A ruling coalition led by Ms.

AIB, Bank of Ireland and Permanent TSB will no longer have to pay up to €1.1 billion a year to the Government in fees for the bank guarantee scheme following the announcement yesterday that it will end on March 28th, the Irish Times reported. The Minister for Finance Michael Noonan said the “time was right” to end the controversial guarantee, which was introduced on September 30th, 2008, to prevent the collapse of the Irish financial system. He said this decision, which had been well flagged by the Government, would help the three banks to “get back to normal”.