Headlines

The German government expects consumer price inflation to rise further this year, contrary to earlier projections, which will likely lead to higher wage demands by labour unions, the economy ministry said in its annual economic report yesterday, Reuters reported. The government predicts a national inflation rate (CPI) of 3.3% for 2022 after 3.1% in 2021 as higher energy costs and a scarcity of semiconductors and other intermediate products continue to push up overall prices, the ministry said.

Brazil posted negative foreign direct investment (FDI) of $3.9 billion in December, the worst monthly figure ever recorded in Latin America's biggest economy, bringing the 2021 total to $46.4 billion, the central bank said yesterday, Reuters reported. The figure last month was slammed by a negative $6 billion in reinvested profits in the country, according to the central bank. In the series started in 1995, Brazil had recorded negative monthly FDI on two previous occasions - the $24 million reported in March 1995 and the $103 million in July 2016.

Brazil's IPCA-15 consumer price index rose 0.58% in the month to mid-January, decelerating from previous figures but at a pace that still exceeded expectations, statistics agency IBGE said on Wednesday, Reuters reported. The monthly rise was higher than the 0.43% increase foreseen by economists in a Reuters poll but slowed from a 0.78% surge in December thanks to lower transportation prices. According to IBGE, prices rose in the remaining eight of nine groups of goods and services covered. The most significant impact came from foods and drinks, with a monthly increase of 0.97%.

Sweden will extend its current pandemic measures by another two weeks, the minister for health said on Wednesday, as the Omicron variant is spreading at record speed, Reuters reported. The curbs mean bars and restaurants have to close at 2300 and there is a cap of 500 people inside larger indoor venues. "We have an extremely high level of spread," Health Minister Lena Hallengren told a news conference. "The restrictions must remain in place for two weeks.

Imerys SA, the French provider of specialty materials, is planning a sale of its high temperature solutions business, Bloomberg News reported. The Paris-based company is working with advisers at Morgan Stanley and Rothschild & Co. to gauge interest in the unit. It could fetch as much as 900 million euros ($1 billion). The high temperature solutions division provides minerals to make insulation materials for molds and furnaces used by metal foundries and iron and steel producers, as well as to protect industrial equipment used in power plants, chemical refineries and cement factories.

Squeezed by soaring yields and potential government price caps, European utilities are making a dash to the bond market, Bloomberg News reported. Energy companies from Italy’s Enel SpA and Germany’s E.On SE have raised 9.1 billion euros ($10.3 billion) in January, the highest tally in data going back to 2014. Utilities account for a third of all investment-grade corporate bond offerings in Europe so far this year. Issuance is up 53% compared with January 2021.

Serbia’s second attempt to sell off the bankrupt Putnik Prijepolje tour company and its assets, including the Bosko Buha memorial complex in the south-western Serbian municipality of Prijepolje, was halted on Tuesday, with no reason given, BalkanInsight.com reported. The sale was scheduled for Friday but the Bankruptcy Supervision Agency, which is in charge of state-owned companies that have declared bankruptcy, said on Tuesday that it has decided to “cancel the sale of the real estate of the bankruptcy debtor… and to withdraw the announcement for the sale of its [property] units”.

The U.K.’s markets watchdog warned it will come down hard on struggling firms that leave customers out of pocket when they resort to legal procedures to manage their liabilities, Bloomberg News reported. The Financial Conduct Authority has seen an increase in the number of firms developing plans that deploy company or insolvency law, such as schemes of arrangement, to manage how much they owe in claims to their clients, the regulator said in a statement on Tuesday. The FCA said it would take action against companies if their proposals unfairly benefit them at the expense of clients.

South Korea's economy expanded at the fastest pace in 11 years in 2021 helped by a jump in exports and construction activity, tempering declines in capital investment and a slow recovery in the coronavirus-hit service sectors, Reuters reported. Record exports drove the rebound but swathes of the economy have fallen behind. Jobs are still vanishing across manufacturing and service sectors, a reminder that liberal President Moon Jae-in's promises to boost employment have not materialised.

Japanese Prime Minister Fumio Kishida said on Tuesday recent price rises in the country were driven largely by rising energy and global commodity costs, Reuters reported. "It's desirable to create an environment in which companies can pass on rising costs, raise wages, so that increasing consumption spurs economic growth and inflation," Kishida told parliament. Read more.