Business

LONDON — Britain will avoid implementing most post-Brexit checks on EU food imports due to start this month so as to prevent major disruption at ports, The Financial Times (FT) reported recently.

The European Union introduced strengthened checks on goods coming from the UK since the country's departure from the bloc entered into force in January 2021.

But London has already delayed implementing some checks and formalities on five occasions amid fears the measures would harm the economy and stoke inflation.

According to a confidential presentation sent by the UK government to port authorities and seen by the FT, the Department for Environment, Food and Rural Affairs said carrying out all the health and safety checks from April 30 could trigger "significant disruption".

The checks will initially only apply to high-risk goods such as meat to ward off the prospect of huge queues of lorries and delays at ports, the newspaper reported.

The government plans to phase in the rest of the controls depending on traffic levels at different ports, the FT quoted the note as saying without providing a precise timeframe.

In January, health certificates became obligatory for some products of animal and plant origin deemed to be of medium risk, including some cheeses, butter, creams, sausages, ham, cut flowers, roots and tubers. The new checks could cost British businesses almost £2 billion ($2.5 billion) and exacerbate inflation that has driven a biting cost-of-living crises for many Britons, insurer Allianz Trade warned last week.

Trade bodies have called for implementation of the checks to be delayed until at least the autumn.

WASHINGTON — The International Monetary Fund (IMF) has raised its outlook for the global economy this year, while maintaining a gloomy forecast over the medium term, according to fresh data published on Tuesday.

The IMF now expects the world economy to grow by 3.2 per cent this year, up 0.1 percentage point from its previous forecast in January, and by a further 3.2 per cent in 2025, according to the latest World Economic Outlook (WEO) report.

Global headline inflation is expected to ease from 5.9 per cent this year to 4.5 per cent in 2025, supported by elevated interest rates in many countries.

"The global economy continues to display remarkable resilience, with growth holding steady and inflation declining," IMF chief economist Pierre-Olivier Gourinchas told reporters on Tuesday. "But many challenges still lie ahead."

"Most indicators continue to point to a soft landing," he said, referring to attempts by many central bankers to bring inflation down to target without fueling unemployment or hampering economic growth.

The WEO's publication comes as global financial leaders gather in Washington this week for a series of semi-annual meetings hosted by the IMF and World Bank. Assistance for the world's most indebted nations and climate change top the agenda for those meetings.

Divergence among advanced economies 

The differences among the world's advanced economies are stark: The IMF now expects growth in the United States to hit 2.7 per cent this year — up 0.6 percentage points from the January forecast — marking an acceleration from the 2.5 per cent growth recorded in 2023. 

Growth in the world's largest economy is then expected to slow to 1.9 per cent in 2025, slightly higher than previously expected.

In contrast, the euro area is now expected to grow by just 0.8 per cent in 2024 — down 0.1 percentage point from January and only slightly above last year's tepid 0.4 per cent expansion — before picking up to 1.5 per cent in 2025.  The outlook for the United Kingdom and Canada this year has also been revised lower, while Japan's 2024 growth forecast was unchanged. 

China unchanged 

The picture is also mixed for emerging market and developing economies. 

China, the world's second-largest economy, is still expected to grow by 4.6 per cent this year, and by 4.1 per cent in 2025 — unchanged from January. 

The growth slowdown is largely down to the easing of a "postpandemic boost to consumption and fiscal stimulus", and ongoing weakness in the property sector, the WEO said.

One of the bright spots this year is India, which the IMF now expects to grow by 6.8 per cent — up 0.3 points from January's forecast — and by 6.5 per cent in 2025.

Although a full per centage point below India's growth figure for 2023, the robust growth expected this year reflects the South Asian economy's "continuing strength in domestic demand and a rising working-age population", the IMF said. 

Russia outlook improved, again 

Russia's growth prospects have been revised sharply higher once more, as it continues to defy expectations of a slump due to its costly ongoing war in Ukraine.

The Russian economy is now expected to expand by 3.2 per cent this year, and by 1.8 per cent in 2025, well above January's forecast. Such unexpected strength is down to four key factors, including Russia's steady oil export volumes, strong corporate investment, "robustness" in private consumption, and impact from government spending, IMF Research Department deputy director Petya Koeva Brooks told reporters. 

This year's forecast for Latin America is slightly higher at 2 per cent, while the outlook for Sub-Saharan Africa is unchanged at 3.8 per cent. The outlook for 2024 growth in the Middle East and Central Asia is slightly lower, at 2.8 per cent, down 0.1 percentage point.

Despite the IMF's more optimistic overall 2024 outlook, the WEO report still finds that medium-term growth is expected to remain "historically weak", due largely to "persistent structural frictions preventing capital and labor from moving to productive firms". It expects growth to hit 3.1 per cent in 2029, well below its pre-pandemic forecast. The IMF report also found that "the pace of convergence toward higher living standards for middle- and lower-income countries has slowed, implying a persistence in global economic disparities".

SINGAPORE — Singapore's economy grew slower than expected in the first quarter, early data showed recently, as a struggling manufacturing sector weighed on tourism spending from events including Taylor Swift's concerts.

The city-state's economic performance is often seen as a barometer of the global environment because of its reliance on international trade.

Gross domestic product expanded 2.7 per cent on-year, the trade ministry said, faster than the previous three months but weaker than the 3 per cent projected in a Bloomberg poll of economists. It grew just 0.1 per cent on-quarter.

The advance estimates are computed largely from data in January and February and are subject to revision when March figures come in.

Manufacturing, a pillar of the trade-reliant economy, rose 0.8 per cent on-year and contracted 2.9 per cent from October-December.

The services sector, which includes accommodation and food, grew 2.9 per cent.

"In all likelihood, the slew of concerts which attracted many international visitors to Singapore's shores, did have a temporal boost to the consumer-facing industries, namely the hospitality and entertainment-related activities," said Selena Ling, chief economist at banking group OCBC.

Swift performed only in Singapore in March for the Southeast Asian leg of her Eras Tour, while Coldplay played in January and the Singapore Airshow, the biggest in Asia, was held in February.

Veteran economist Song Seng Wun said he expected an "upward adjustment" to the overall first quarter growth when the effects of Swift's concerts are fully counted.

There could also be "spillover effects" into March of spending from the Singapore Airshow, added Song, at financial services firm CGS International Singapore.

"The bottom line is that the economy is still recovering post-pandemic," he told AFP.

In a separate announcement, the central bank Monetary Authority of Singapore kept its monetary policy unchanged for a fourth straight time, saying it needed to keep inflation in check.

As the city-state imports most of its needs, it deals with imported inflation by allowing for a stronger Singapore dollar.

LONDON — Europe's stock markets rose Friday after the European Central Bank (ECB)  signalled a likely June interest rate cut, with London boosted by fresh hope that Britain has escaped from recession, as dealers also awaited the start of the US earnings season.

Gold hammered a record pinnacle at $2,400.67 per ounce as dealers flocked to the haven investment to shelter from intensifying Middle East tensions, which also propelled crude oil more than one percent higher.

The dollar climbed versus the euro as dealers digested increasing indications of a June rate reduction from the Frankfurt-based ECB.

Yet, fading hopes for a similar June rate cut from the US Federal Reserve roiled Asian equities, which struggled to build on Wall Street's positive lead.

"Stock markets edged higher in Europe on Friday despite uneven performances across Asia overnight and rising global uncertainty," said ActivTrades analyst Pierre Veyret.

"Despite a few volatility spikes, EU stock investors reacted positively to ECB President Christine Lagarde's speech. The central banker reassured everyone, saying the ECB would stick to its rate-cut plan regardless of the recent hot inflation report in the US."

London stocks fizzed higher on data showing the UK economy grew for a second straight month in February, further fuelling recovery hopes after sliding into a shallow recession in the second half of last year.

'Welcome distraction' 

Attention is now turning to the corporate reporting season, which gets underway in earnest later in the day with banking giants JPMorgan and Citibank among those to log earnings.

Analysts said that while reducing interest rates would be a major boost for equities, investor optimism about company profits was crucial.

"The inception of the US first quarter earnings season brings a welcome distraction from the Fed's struggles in bringing inflation back down to target," said Scope Markets analyst Joshua Mahony.

Tech titans helped drive gains in the Nasdaq and S&P 500 after producer price index data broadly met expectations, tempering worries about inflation following Wednesday's figures showing a third successive upside miss in consumer price inflation.

The CPI figures followed a series of indicators suggesting the world's number one economy remained resilient and the jobs market strong despite interest rates sitting at two-decade highs and inflation still well above the Fed's target.

That has seen investors trim their US rate cut bets from six at the start of the year to two now.

Dimming hopes for rate cuts continued to support the dollar, which surged to another 34-year high above 153 yen, putting Japanese officials in the spotlight after they said they were ready to intervene in markets to support their currency.

SEOUL — Samsung Electronics said recently it expects first-quarter operating profits to rise more than 10-fold year on year as chip prices recover.

The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia's fourth-largest economy.

The tech giant said in a regulatory filing that January-March operating profits were expected to rise 931.3 per cent to 6.6 trillion won ($4.89 billion). Operating profits in the same period last year totalled around 640 billion won. The expectation exceeded the average estimate by 20.5 per cent, according to South Korea's Yonhap news agency, which referenced its financial data firm.

Sales, meanwhile, are expected to rise 11.4 per cent to 71 trillion won, Samsung said. South Korean chipmakers, led by Samsung, enjoyed record profits in recent years as prices for their products soared, but a global economic slowdown dealt a blow to memory chip sales. However, the semiconductor market had been predicted to recover this year and grow 11.8 per cent, according to industry monitor World Semiconductor Trade Statistics.

The news from Samsung comes after South Korea's SK Hynix — the world's second-largest memory chip maker — announced in January that it had returned to profit after four consecutive quarters of losses.

Samsung's overall outlook is "fortified by a resurgence in the smart phone market, escalating DRAM (memory chip) prices", Neil Shah, vice president of Counterpoint Research, told AFP.

Samsung is expected to release its final earnings report at the end of this month.