- This weekly round-up brings you the latest stories from the world of economics and finance.
- Top economy stories: Economic opportunities for LatAm; Global business activity slows; Food commodity prices fall.
1. Economic opportunities for LatAm – new report
A new G30 report has highlighted the potential economic opportunities for Latin America from climate finance and supply chain changes, should it get the correct policies in place.
The report identified the benefits to the region of getting its macroeconomic framework in shape and investing in infrastructure. Produced by the Group of 30’s think tank working group on Latin America, the report also called for political reforms to build trust in institutions.
Andres Velasco, project director of the working group, said “the opportunities are obvious” for the region as it can help provide the world with water, food and clean energy.
“The West needs countries with which they can build supply chains that are not politically contentious and Latin America – or much of the region at least – has a historic closeness with the West,” he told Reuters.
“The opportunities are there. The question is, are we going to seize them? The evidence so far is that we’re not doing everything we need to seize them.”
2. Global business activity shows sign of August slowdown
A series of surveys released this week showed global business activity generally slowed in August. This comes as service firms continue to struggle in the face of weak demand as a result of higher prices and borrowing costs, reports Reuters.
In the Eurozone, the services industry fell into contractionary territory, prompting concerns of a recession in the bloc. Elsewhere in Europe, the UK’s survey showed its sharpest business slowdown in seven months.
Meanwhile, in Asia, China saw the slowest expansion rate of its services sector in eight months, and India’s also slowed.
But two countries proved outliers – Japan’s services sector saw its sharpest growth in three months, while US services also picked up in August.
3. News in brief: Stories on the economy from around the world
The Bank of Canada has held its key overnight interest rate, but hasn’t ruled out further rises in the future, should inflation continue. The rate currently sits at 5% following quarter-point increases in July and June.
The latest data shows Pakistani inflation stood at 27.4% in August, as the country implements the conditions of an International Monetary Fund loan.
US job growth sped up in August, however, the unemployment rate has increased to 3.8%. The news adds further weight to predictions the Fed will not raise interest rates in September.
Eurozone growth has been revised down for the second quarter of this year, with GDP only rising 0.1% in the three months to June. It had previously been measured at 0.3%.
A policymaker at the Bank of Japan has called for the continuation of loose monetary policy and negative interest rates.
Japan’s GDP grew less than initially estimated in the second quarter of 2023, according to new data.
Demand for new staff in the UK has fallen at its fastest pace in three years, according to data from the Recruitment and Employment Confederation.
The Food and Agriculture Organization has announced a drop in food commodity costs, reaching their lowest in more than two years.
It aims to help governments in developing and least developed countries implement the World Trade Organization’s Trade Facilitation Agreement by bringing together governments and businesses to identify opportunities to address delays and unnecessary red-tape at borders.
For example, in Colombia, the Alliance worked with the National Food and Drug Surveillance Institute and business to introduce a risk management system that can facilitate trade while protecting public health, cutting the average rate of physical inspections of food and beverages by 30% and delivering $8.8 million in savings for importers in the first 18 months of operation.
4. More on finance and the economy on Agenda
How can companies help tackle social vulnerabilities? Investors and executives need a framework to help do so, while also building their business value.
Risk management isn’t just for large organizations. In an unpredictable world, it’s vital that micro, small, and medium enterprises embrace risk management.
How can we make people more financially resilient? Gamification and nudges could help, write authors from the Asian Development Bank.