Headlines

German Economy Minister Robert Habeck faced a backlash on Wednesday for saying he could imagine parts of the economy stopping production due to rising energy prices that German firms say are threatening their existence, Reuters reported. Asked whether he expected a wave of insolvencies at the end of this winter due to companies' rising energy bills, Habeck said "No, I don't.

According to research, insolvency case recoveries increased slightly from 26% in Q1 of the previous fiscal to 30.6% in Q1 of the current fiscal, although the number of insolvency cases filed/admitted increased by 23.5% during this time, India Infoline News Service reported. The total amount of financial creditors' acknowledged claims increased from Rs6,84,901.3 crore in March 2022 to Rs7,67,384.9 crore in June 2022, although the liquidation value of these cases remained essentially the same at Rs1,31,447.9 crore and Rs1,31,468.6 crore, respectively.

Burdened with a growing pile of souring loans to the developing world the past few years, Chinese lenders have been rescheduling payments and offering more credit to borrowers in financial straits, the Wall Street Journal reported. Those strategies—reminiscent of “extend and pretend” practices of banks unwilling to recognize bad debts—failed in Sri Lanka, whose government collapsed recently under the weight of unpayable loans. Now, China’s tactics face further tests, as other developing countries flirt with financial instability amid higher inflation and rising interest rates.

During the second quarter of 2022, consumer insolvency rose to its highest level since the start of the pandemic, according to Equifax Canada, MPAMag.com reported. Consumer proposals went up by 20.7% annually in Q2, accounting for approximately 76% of all insolvencies in Canada. Delinquency rates in 90 day+ accounts also had a 4% increase, Equifax said.

Denmark's central bank raised its key interest rate by 0.75 percentage points to 0.65% on Thursday, ending a nearly decade-long experiment of negative interest rates, Reuters reported. "The interest rate increase is a consequence of the increase by the European Central Bank of its main monetary policy rate" the central bank said in a statement. Earlier on Thursday, the ECB raised its benchmark deposit rate by 75 basis points to 0.75% and signaled further hikes.

Inflation in urban parts of Egypt accelerated to its fastest level since November 2018 on the back of higher food costs, Reuters reported. Consumer prices climbed 14.6% from a year earlier in August, versus 13.6% the previous month, the state-run statistics agency CAPMAS said Thursday. Food and beverage costs, which make up the largest single component of the inflation basket, jumped 23.1%. On a monthly basis, price growth slowed to 0.9% from 1.3% in July.

State-owned companies of the Chinese northeastern city of Shenyang bought China Evergrande Group's shareholding in Shengjing Bank in an auction for 7.3 billion yuan ($1.05 billion), Alibaba auction platform showed yesterday, Reuters reported. In July, Evergrande, the world's most indebted property developer, said its unit, Evergrande Nanchang, had been ordered to pay an unamed guarantor 7.3 billion yuan for failing to honour debt obligations.

China's exports and imports lost momentum in August with growth significantly missing forecasts as surging inflation crippled overseas demand and fresh COVID curbs and heatwaves disrupted output, reviving downside risks for the shaky economy, Reuters reported. Exports rose 7.1% in August from a year earlier, slowing from an 18.0% gain in July and marking the first slowdown since April, official data showed on Wednesday, well below analysts' expectations for a 12.8% increase.

Surging energy costs are increasing the number of Europe's small and medium sized businesses at risk of collapse and European Union action to cap prices would to help them survive, top officials from the EU's SME association said yesterday, Reuters reported. Russia has cut energy supplies to Europe in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine, sending prices skyrocketing. Russia blames those sanctions for causing the gas supply problems, which it puts down to pipeline faults.

Romanian discount carrier Blue Air Aviation SA canceled all flights through Monday after its bank accounts were frozen by the state amid concerns over unpaid debt, Bloomberg News reported. The sudden intervention left Blue Air unable to pay daily operating costs, the carrier said, with the grounding leaving thousands of passengers stranded at airports across Europe and beyond. The government said the halt to services was unjustified and urged the company to discuss a rescheduling of the debt.