Economy

LONDON (Capital Markets in Africa) – The escalating trade war between the U.S. and China is nudging the world economy toward its first recession in a decade with investors demanding politicians and central bankers act fast to change course. In the U.S. alone, the recession risk is “much higher than it needs to be and much higher than it was two months ago,” Lawrence Summers, a former U.S. Treasury secretary and a White House economic adviser…

LONDON (Capital Markets in Africa) – The global bond market is sounding the alarm that things won’t be able to carry on much longer before a recession strikes. Germany’s yield curve is now at its flattest since the financial crisis — and yields across the world are slumping to fresh lows — in a cacophony of signs that investors are growing increasingly pessimistic about the outlook for the world economy. Central banks from New Zealand…

CAIRO (Capital Markets in Africa) – It’s the fastest-growing economy in the Middle East and a darling among emerging-market investors, yet poverty has climbed and companies are struggling. As Egypt concludes a three-year International Monetary Fund program designed to help pull the Arab world’s most populous nation out of economic turmoil, the indicators shown in the following charts are a vivid snapshot of the disparities. Inflation is finally slowing, the budget deficit is being whittled…

LAGOS (Capital Markets in Africa) – China took steps to limit weakness in the yuan, providing some stability to global financial markets in the wake of Monday’s rout, and said it won’t depreciate the currency to be competitive. The People’s Bank of China on Tuesday set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. The moves, which came after the U.S. labeled the country…

JOHANNESBURG (Capital Markets in Africa) – Fresh from being reappointed for another five years, South African Reserve Bank Governor Lesetja Kganyago made it clear that he will keep on pursuing his mandate of low inflation and suggested the current target band may even be too high. This comes after Kganyago and the central bank came under renewed criticism in recent months from labor unions and some senior members of the ruling party who want borrowing…

CAIRO (Capital Markets in Africa) – Egyptian inflation eased unexpectedly to its lowest rate in more than three years, with some analysts predicting a greater chance of the central bank cutting interest rates in the coming months. Consumer prices in urban parts of Egypt rose by an annual 9.4% in June, compared with 14.1% in May, the state-run statistics agency, CAPMAS, said Wednesday. On a monthly basis, food prices declined 2.2%. Although the extent of the deceleration was…

JOHANNESBURG (Capital Markets in Africa) – The risk of South Africa’s struggling state power utility going bust doesn’t appear to faze one of its biggest creditors: the World Bank. The Washington-based lender agreed to lend Eskom Holdings SOC Ltd. $4 billion almost a decade ago to boost its generation capacity and avoid a repetition of rolling blackouts. Mismanagement and construction cost overruns have seen the state of the utility’s finances going from bad to worse since then,…