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BEIJING — Deeply indebted Chinese developer Country Garden has delayed the deadline for a vote by bondholders on whether to extend repayment on a key note until next week, as it flirts with a potentially catastrophic default, Bloomberg reported on Friday.

One of China's biggest builders, Country Garden has accumulated debts of more than $150 billion and said this month it had failed to make interest payments on two bonds — putting it at risk of default.

The company has asked to extend payment on a 3.9 billion yuan ($535 million) note until 2026, originally setting an online vote among bondholders to end at 10pm Beijing time Friday (1400 GMT).

However Bloomberg News, citing a filing to the Shanghai Stock Exchange's private disclosure platform, reported just hours before the original deadline that the company had pushed it back to August 31.

If bondholders refuse, Country Garden could become the biggest Chinese real estate firm to default since rival Evergrande in 2021.

The company also faces a deadline for a separate bond payment at the beginning of September.

Country Garden's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.

The nation's economic rise has been largely founded on property and construction, which account for about a quarter of GDP.

But a years-long government credit crunch and crippling debts among many developers have hit the sector hard in recent years.

Beijing has offered more support for the industry in the face of a wider economic slump, and on Friday announced a suite of new mortgage easing policies.

Country Garden is expected to publish its results for the first half of the year in the coming days and has said it expects a net loss of as much as 55 billion yuan ($7.5 billion).

Adding to the pressure on the firm, 31 billion yuan in bonds will expire in 2024, according to rating agency Moody's.

Ratings firm Fitch said on Wednesday it was downgrading a Country Garden subsidiary to junk, saying the unit's "growth, brand reputation, profitability and funding access may be negatively affected by the heightened liquidity pressure" at the developer.

WASHINGTON — The US Federal Reserve (Fed) is prepared to raise interest rates higher — and hold them there — to bring down above-target inflation, but will proceed "carefully" going forward, Chairman Jerome Powell said Friday.

"We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective," he told the Jackson Hole Economic Symposium in Wyoming. 

After 11 rate hikes in less than 18 months, the US benchmark lending rate now sits at a range between 5.25 and 5.5 per cent — its highest level in 22 years.

However, the rapid cycle of interest rate increases has failed to definitively quash inflation the rapid cycle of interest rate increases has failed to definitively quash inflation, which remains stuck above the Fed's long-term target of 2 per cent despite slowing sharply from recent multidecade highs.

Navigating 'under cloudy skies' 

Despite insisting the Fed could yet raise rates, Powell urged caution moving forward during his speech. 

"As is often the case, we are navigating by the stars under cloudy skies," he said.

"Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks."

US stocks entered a bumpy period following Powell's remarks, before rising sharply in the afternoon.

"The overall tone of Chair Powell's Jackson Hole speech is one of cautious optimism coupled with clear determination to take no chances with the inflation outlook," Pantheon Macroeconomics' Chief Economist Ian Shepherdson wrote in a note to clients. 

"If that requires further tightening, in the Fed's view, then so be it. But nothing is guaranteed," he added.

"Relative to market expectations, Powell perhaps delivered a bit more on the side of potential further rate cuts, and a bit less on the idea that average policy rates will be higher," Citigroup economists wrote in an investor note after the speech. 

Reaffirming two per cent target 

Powell told the Jackson Hole retreat that the Fed's 2-per cent goal "is, and will remain, our inflation target".

"We will need price stability to achieve a sustained period of strong labour market conditions that benefit all," he said.

"We will keep at it until the job is done," he added.

Analysts and policymakers remained split ahead of Powell's speech on the likelihood of a 12th hike to tackle inflation at the Fed's next rate-setting meeting, in September.

Surprisingly strong jobs and growth data in recent months indicate that the US economy is in better health than many economists feared earlier this year when they forecast the country was headed for recession.

In his speech, Powell announced the Fed estimated a slight annual increase in its favoured inflation measure in July, known as the personal consumption expenditures (PCE) price index.

PCE inflation in July rose to an annual rate of 3.3 per cent, according to the Fed's calculations. Official figures will be published by the Commerce Department on Thursday.

Futures traders currently assign a probability of around 80 per cent that the Fed will vote to pause rates at its rate-setting meeting on September 19-20, according to data from CME Group. 

ECB reaffirms inflation target

The other notable speech Friday came from European Central Bank (ECB) President Christine Lagarde, who is grappling with the challenge of higher inflation and lower growth. 

Lagarde said it was crucial for central banks to "provide a nominal anchor for the economy and ensure price stability in line with their respective mandates", according to prepared remarks.

"In the current environment, this means — for the ECB — setting interest rates at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our two per cent medium-term target," she added.

Euro area inflation recently declined to an annual rate of 5.3 per cent, while growth was barely positive — in sharp contrast with the United States. 

However, there are variations within the 20-member Eurozone currency bloc.

Germany, which is Europe's largest economy, has in recent months been dealing with so-called "stagflation" — a toxic combination of economic stagnation and high inflation. 

It is the only G-7 economy expected to contract this year, according to the International Monetary Fund, while other large Eurozone economies, like France and Spain, are in better shape. 

Against this backdrop, the ECB has had to tread carefully, raising interest rates in smaller increments than the Fed. 

LONDON — The administrators of British household goods company Wilko warned of "likely" redundancies and store closures after they were unable to find a buyer for the whole business. 

The discount retailer, selling cleaning and garden products as well as other small household items, entered administration in early August, putting about 12,500 jobs and its 400 UK stores at risk.

Wilko has appointed PricewaterhouseCoopers (PwC) as administrators of the distressed company, founded in 1930 with headquarters in the town of Worksop, central England.

"While discussions continue with those interested in buying parts of the business, it's clear that the nature of this interest is not focused on the whole group," PwC said in a statement on Wednesday evening.

"Sadly, it is therefore likely that there will be redundancies and store closures in the future and it has today been necessary to update employee representatives," PwC added. 

It did not provide further details on the number of jobs and stores that will be affected. 

PwC said that "in the immediate term, all stores remain open, continue to trade and staff continue to be paid" and that "contrary to speculation" there were no plans to close any stores next week.

Sky News meanwhile reported that discount retailers Pepco Group and B&M European Retail were in discussions with PwC to take over some of the stores.

Pepco is in talks to acquire around 100 stores while B&M could take on between 40 and 50 shops, according to Sky News.

Contacted by AFP, Pepco and PwC declined to comment, while B&M did not immediately respond to a request for comment.

On Wednesday, the GMB union, which represents Wilko workers, said "the majority" of Wilko stores would close "within weeks" after a purchase of the retailer fell through.

"Some stores may be bought, either individually or as part of larger packages, but significant job losses are now expected," the union added. 

ISTANBUL — Turkey's central bank on Thursday delivered a huge surprise by raising the interest rate to 25 per cent as part of a transition from President Recep Tayyip Erdogan's era of unorthodox economics.

The hike of 7.5 percentage points follows a raise to 17.5 per cent from 15 per cent last month.

Most economists had expected the bank to increase its policy rate Thursday to 20 per cent.

"Recent indicators point to a continued increase in the underlying trend of inflation," the central bank said.

"Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved," it said.

The lira gained 1.5 per cent against the dollar in wake of the bank's strong signal that is was stepping up its fight against inflation and attempts to support the troubled currency.

Capital Economics analyst Liam Peach said the "much larger-than-expected" rate increase "will go a long way towards reassuring investors that the shift back to policy orthodoxy is on track".

Erdogan infused his government with market-friendly faces after winning a difficult May election that came in the heat of one of Turkey's most dire economic crises in decades.

They immediately set off on a new battle against inflation that peaked at an annual rate of 85 per cent last October and is on the rise once again.

The team allowed the lira to start depreciating against the dollar in a bid to ease pressure on depleted state coffers.

They also imposed a series of more technical steps aimed at balancing the economy and restoring the trust of both consumers and Turkey's foreign investors.

'Large gap'

The central bank increased its key rate to 15 per cent from 8.5 per cent at the first meeting chaired by former Wall Street executive Hafize Gaye Erkan in June.

Erdogan had pushed the nominally independent institution to slash borrowing costs out of a life-long belief that high interest rates cause — rather than cure — inflation.

But Erkan and Finance Minister Mehmet Simsek had advocated a more go-slow approach in the past two months that tried to restore market confidence without causing too much short-term pain.

That appeared to change when July's annual inflation rate soared back to 47.8 per cent thanks to billions of dollars in social spending Erdogan meted out during his election campaign.

The central bank expects the annual inflation rate to peak at 60 per cent in between April and June of next year.

"There remains a large gap between the policy rate and both current and expected inflation," ING bank's chief economist Muhammet Mercan warned.

Some analysts suspected that Erkan and Simsek feared a revolt from Erdogan should they push their reforms too strongly.

Erdogan fired one central banker four months into his attempts to interest raise rates in late 2020 and early 2021.

He dismissed two others before then for fighting his unorthodox approach.

Vote of confidence 

But Erkan's hand was strengthened following the appointment of three more respected economists to top central bank positions in the past month.

These bankers are "giving Hafize Gaye Erkan the backing to be more aggressive with rate hikes", emerging markets economist Timothy Ash said.

"The Turkish central bank now has a really impressive team in place — there is light at the end of the tunnel."

Erdogan gave his new team a new vote of confidence in prepared remarks delivered shortly after the decision.

"We are taking determined steps to address the problems caused by inflation," Erdogan said.

"We have started to see the positive impact of the measures already taken."

HANOI — One of Vietnam's largest shoemakers for brands such as Nike, Adidas and Reebok will cut jobs for the third time this year, state media said Wednesday, citing a lack of orders.

The Southeast Asian country is among the world's largest exporters of clothing, footwear and furniture but its economic growth has been slow in the first half of the year as a slump in demand hits exports.

PouYuen Vietnam, a unit of Taiwan-based Pou Chen Group, will lay off around 1,200 workers with permanent contracts from the end of August, VnExpress said, citing a local official in Ho Chi Minh City on Wednesday.

"PouYuen Vietnam said the job cuts are due to no recovery in terms of orders. Only a few clients made orders," VnExpress reported.

The firm is among the largest employers in Ho Chi Minh City, Vietnam's commercial capital, with an estimated 40,000 workers.

This is the third time this year that it has cut jobs. It announced in May almost 6,000 workers with permanent contracts would be laid off, after letting go almost 3,000 permanent staff in February.

That came after PouYuen put 20,000 of its workers on paid leave in rotation last year.

More than 217,000 workers lost their jobs in Vietnam during the second quarter of 2023, according to the country's General Statistics Office.

They were mainly working to produce textiles, footwear and electronics.

DUBAI — Passenger traffic at Dubai international airport leapt 50 per cent in the first half of the year, surpassing pre-pandemic levels, its operator said on Tuesday.

Dubai, the world's busiest airport for international passengers before COVID-19, had 41.6 million visits in the six months to June, just over the number recorded in the first half of 2019, Dubai Airports said in a statement.

The passenger figure also marks a 50 per cent increase from the 27.9 million seen in the same period last year. 

"As we recover with our (first-half) traffic surpassing pre-pandemic levels, we continue to remain committed to ensuring every guest who travels through our airport leaves with a smile," said Paul Griffiths, CEO of Dubai Airports. 

Passenger forecasts for the second half of the year have been raised to 85 million, up from 83.6 million.

"Dubai Airports is optimistic about the levels of demand and is expecting record-breaking numbers during the winter season," the company said in a statement.

"We're preparing for an exceptionally busy rest of the year."

Dubai airport closed briefly to commercial flights from March to July 2020 but was one of the first travel hubs to reopen after the pandemic.

In 2020, it received only 25.9 million passengers, down from the 86 million the previous year.

FRANKFURT — Germany's "lacklustre" economy will likely stagnate again in the third quarter, the Bundesbank central bank said Monday, as weak demand from abroad and high interest rates take their toll on Europe's industrial powerhouse.

After preliminary estimates suggested that the economy recorded zero growth in the second quarter of 2023, the outlook for the July-September period was not much better, the Bundesbank said in its monthly report.

"German economic output will probably remain largely unchanged again in the third quarter," it said.

Europe's largest economy is "still lacklustre" and "still experiencing a period of weakness", it added.

The gloomy outlook adds to concerns that Germany will drag down the eurozone's economic performance this year, with the International Monetary Fund predicting it will be the only major advanced economy to shrink in 2023.

National statistics agency Destatis will release final data for the second quarter on Friday.

The German economy shrank over the two preceding quarters, meeting the technical definition of a recession.

Germany's key industrial sector, traditionally a driver of growth, has been hit particularly hard in recent months as exports have plummeted against a backdrop of high inflation and subdued global activity.

Even though supply chain bottlenecks have eased, "industrial output looks set to remain weak", the report said, "as foreign demand has been on a downward trend of late".

While economic activity in the United States, a major trading partner, was in "comparatively good shape", the bank noted that key client China's post-COVID recovery had "quickly lost momentum".

Higher borrowing costs as a result of the European Central Bank's (ECB's) interest rate rises, aimed at bringing down inflation, will also continue to weigh on investment and the construction sector, the Bundesbank added.

On a brighter note, private consumption was likely to shore up the economy in the third quarter thanks to stable employment, higher wages and declining inflation.

Germany's annual inflation rate slowed to 6.2 per cent in July, mainly on the back of lower energy prices. 

But wage pressures were likely to keep inflation above the ECB's two-percent target "for longer", the report said.

"Wage growth will probably remain strong, even going into the new year," it said.

Germany's leading economic institutes expect the economy to shrink by 0.2 to 0.4 per cent over the whole of 2023.