Headlines

Italian Prime Minister Mario Draghi called on the European Union on Tuesday to tackle surging energy costs, saying it should adapt schemes deployed to handle the COVID-19 epidemic to the impact of the Ukraine conflict, Reuters reported. In an address to the European Parliament in Strasbourg, Draghi said national budgets alone could not finance the spending necessary to uphold sanctions imposed on Russia over its invasion of Ukraine without risking domestic upheaval.

Colombian presidential candidate Federico “Fico” Gutierrez, the main challenger to leftist Gustavo Petro, is planning a tax reform to gradually increase revenue over 10 years, according to one of his top advisers, Bloomberg News reported. That will help fund an ambitious plan to boost growth, tackle infrastructure bottlenecks and build a million homes for low-income families, but without running up unsustainable debts that would scare off investors, said Manuel Fernando Castro, who is helping formulate the candidate’s economic program.

Industrial production in Brazil rose in March, but ended the first quarter with a negative print, highlighting the challenges for the sector amid problems in global chains and a domestic scenario marked by high interest rates and inflation, Reuters reported. Industrial output grew 0.3% in March from February, government statistics agency IBGE said on Tuesday, slightly above the 0.2% increase projected in a Reuters poll of economists. Still, it stood 2.1% below the level in February 2020, before the onset of the pandemic, the agency said.

Norway's $1.2 trillion sovereign wealth fund is prepared for a rocky ride as it confronts the biggest geopolitical changes in three decades, its chief executive said on Tuesday, Reuters reported. "We probably face the greatest changes for 30 years," Nicolai Tangen told a Norwegian parliamentary hearing, adding the world's largest sovereign wealth fund expects "growing frictions between superpowers and a reversal of globalisation".

For years, the bolivar drifted toward irrelevancy as Venezuelans embraced the economic stability brought on by the widespread use of the U.S. dollar, Bloomberg News reported. But the Socialist regime, always reluctant to fully turn its economy over to the dollar, is now making a surprise bid to revive the local currency. Emboldened by surging oil exports that are fueling economic growth and helping keep the foreign-exchange rate steady, the government is pushing Venezuelans to use the bolivar more by slapping a 3% tax on purchases made with dollars in shops, restaurants and grocery stores.

May 4 Report: Snarled-Up Ports Point to Worsening Global Supply Chain Woes Global supply chain problems look to set to worsen, a new report published on Tuesday said, as China's COVID-19 lockdowns, Russia's invasion of Ukraine and other strains cause even longer delays at ports and drive up costs, Reuters reported. The study by analysts at Royal Bank of Canada (RBC) found that one-fifth of the global container ship fleet was currently stuck in congestion at various major ports.

Throttled by Beijing’s zero-tolerance approach to Covid-19, China’s economy is facing a spell of slower growth. Economists are toying with the term “recession” to describe it, the Wall Street Journal reported. A recession commonly means two straight quarters of contraction, and that remains unlikely for China, many economists say. The country has many ways to ensure it posts stronger growth than the U.S. and Europe this year, including the ability to unleash heavy government spending.

Ukraine’s central bank warned that its financial lifeline to the government has its limits and urged the finance ministry in Kyiv to lean on outside help in efforts to shore up the economy as Russia presses forward with the invasion, Bloomberg News reported. The monetary authority, which began direct purchases of Ukrainian government bonds after the war began in late February, added 50 billion hryvnia ($1.65 billion) to its debt portfolio in April, bringing the tally to 70 billion hryvnia.

Russian Prime Minister Mikhail Mishustin signed a decree cutting the state-backed mortgage rate and extending the programme, part of wider measures aimed at stimulating economic growth, Reuters reported. Russia is grappling with the fallout from Western sanctions over what Moscow calls a special military operation in Ukraine to demilitarise its neighbour and rid it of extreme anti-Russian nationalism. The state-backed mortgage scheme that has helped support a construction boom in Russia had been due to expire on July 1.

Poland urged its European Union partners on Monday to unite and impose sweeping sanctions on Russia’s oil and natural gas sectors over the war in Ukraine, and not to cave in to pressure to pay for their gas in Russian rubles, the Associated Press reported. The appeal came as EU ministers met in Brussels to discuss their response to Russia’s decision last week to cut gas supplies to Bulgaria and Poland. Energy giant Gazprom says the two countries failed to pay their bills in April. “We will call for immediate sanctions on Russian oil and gas.