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Shares of India’s Adani Enterprises plunged yesterday as a scathing report by a US short seller triggered a massive selloff in the conglomerate’s listed firms, casting doubts on the company’s record $2.45bn secondary offering.Seven listed companies of the Adani conglomerate — controlled by one of the world’s richest men Gautam Adani — have lost a combined $48bn in market capitalisation since Wednesday, with US bonds of Adani firms also falling after Hindenburg Research flagged concerns in a January 24 report about debt levels and the use of tax havens.The rout took shares of Adani Enterprises, the group’s flagship company, well below the offer price of its secondary sale that had initially been offered at a discount.As bidding started yesterday, the issue was subscribed by less than 1%, raising concerns over whether it would be able to proceed. “The sell-off is seriously extreme...it has clearly dented overall investor sentiment in the market,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities.The Adani Group is concerned about the fall in share prices but continues to be in a wait and see mode as the share sale continues until Jan 31, said two people with direct knowledge of the discussions.India’s capital markets regulator is studying the Hindenburg report and may use it to aid its own ongoing probe into offshore fund holdings of Adani Group, two other sources said.Spokepersons for the regulator and Adani had no immediate comment.Adani Group has dismissed the Hindenburg report as baseless and said it is considering whether to take legal action against the New York-based firm. With a net worth of $96.6bn, billionaire Gautam Adani is now the world’s seventh richest man, according to Forbes, slipping from the third position he held before the Hindenburg report.Adani met the country’s power minister R K Singh yesterday, but the agenda of the meeting was not immediately known.The billionaire hails from the western state of Gujarat, the home state of Prime Minister Narendra Modi.India’s main opposition Congress party has often accused Adani and other billionaires of getting favourable policy treatment from Modi’s administration, allegations the billionaire denies. The stunning market selloff has cast a shadow over Adani Enterprises’ secondary share sale that started yesterday.The anchor portion of the sale saw participation from investors including the Abu Dhabi Investment Authority and Maybank Securities on Wednesday.Investors, mostly retail, had bid for around 366,000 shares of Adani Enterprises, compared with 45.5mn on offer, according to Indian stock exchange data.The share sale is being managed by Jefferies, India’s SBI Capital Markets, Axis Capital, and ICICI Securities among others. The firm has set a floor price of Rs3,112 ($38.22) a share and a cap of Rs3,276. But yesterday the stock ended at Rs2,761.45 — well below the lower end of the range.Shares of other listed Adani firms also plummeted, with Adani Transmission Ltd, Adani Total Gas and Adani Green Energy sinking 20% each — marking their worst day ever — while Adani Ports and Special Economic Zone fell 16.3%.Investors’ worries extended to Indian banks with exposure to Adani debt. The Nifty Bank index fell over 3%, while the broader 50-share Nifty index ended down 1.6%.CLSA estimates that Indian banks were exposed to about 40% of the Rs2tn ($24.53bn) of Adani Group debt in the fiscal year to March 2022.US dollar-denominated bonds issued by Adani Green Energy extended this week’s sharp falls to just under 77 cents on the dollar to their lowest since November, Tradeweb data showed.In its report, Hindenburg said key listed Adani Group companies had “substantial debt”, putting the conglomerate on a “precarious financial footing”. It also said “sky-high valuations” had pushed the share prices of seven listed Adani companies as much as 85% beyond actual value.Billionaire US investor Bill Ackman said on Thursday that he found the Hindenburg report “highly credible and extremely well researched.” Ackman had bet $1bn against Herbalife Ltd starting in 2012, but eventually exited his position at a loss.Hindenburg said it held short positions in Adani through its US-traded bonds and non-Indian-traded derivative instruments. Adani Group has repeatedly dismissed concern about its debt levels.It defended itself in a presentation titled “Myths of Short Seller” on Thursday, saying deleveraging by promoters — or key shareholders — was “in a high growth phase”. Jefferies said in a client note it does not see material risk arising to Indian banks sector from the group’s debt.Adani has said its borrowings were manageable and that no investor has raised any concern.Adani has been diversifying its business interests and last year bought cement firms ACC and Ambuja Cements from Switzerland’s Holcim for $10.5bn. ACC shares slid 13.2% yesterday, while Ambuja plunged 17.3%.

Back-to-back interest-rate increases of 50 basis points are approaching from the European Central Bank (ECB), whose battle with persistent inflation will see it hike borrowing costs until May, according to a Bloomberg survey of economists. Respondents expect the deposit rate to then be held at 3.25% for about a year — until a souring economy brings about a series of quarter-point cuts, kicking off in June 2024.Despite 250 basis points of rate rises to date — the most aggressive monetary-tightening drive in ECB history — more than half of the analysts reckon officials are still behind the curve in tackling the eurozone’s worst-ever spike in prices. Only a third worry that policymakers will go too far.The first ECB policy meeting of 2023 is next week and will almost certainly deliver the half-point hike that President Christine Lagarde promised in December. Beyond February, the survey results suggest officials won’t be inclined to ease off — even with inflation on the back foot, energy prices sinking and the Federal Reserve mulling a downshift in its own cycle of rate increases.Lagarde and her hawkish colleagues are signalling an identical move is indeed likely in March — with money markets considering that the most likely outcome. Some members of the 26-strong Governing Council, however, say they’d prefer a more gradual approach. Four of 46 economists polled see only a quarter-point step that month.“The focus at the February meeting will be on signals for the March meeting,” said Jussi Hiljanen, SEB’s head of European macro and fixed-income research. “The risk is that even a slight softening of the language could trigger an overly dovish interpretation by markets.”Inflation may have dipped back into single digits but it remains much closer to 10% than to the ECB’s 2% target. Officials, meanwhile, are switching their focus to the underlying gauge that excludes food and energy costs and which hit a record in December.“The biggest challenge for the Governing Council will be to balance the fact that headline inflation is now falling and might do so quite rapidly due to lower energy prices, with the fact that core inflation is still rising,” said Veronika Roharova, head of euro-area economics at Credit Suisse. For the ECB, “the latter will be more important.”While the economy is faring better than feared late last year — thanks to the plunge in natural gas prices, government aid for households and business, and easing supply snarls — two-thirds of respondents still expect a recession. Estimates of the cumulative loss range from 0.3-1.4%.But that won’t stop policymakers, who’ve long argued that any downturn will be shallow without meaningfully damping prices, from continuing to remove support.“If the main driver of the economic outlook in 2022 was the energy crisis, in 2023 it’s likely to be the ECB’s response to it. Higher projected interest rates mean we have revised down growth in the second half of 2023 — the biggest risk right now is that monetary policy has a greater impact on the economy than investors expect,” say Jamie Rush and Maeva Cousin.The ECB is set to reveal more details next week on plans to shrink its €5tn ($5.4tn) bond portfolio from March. The process will begin with officials allowing some debt to mature, rather than reinvesting the proceeds like they do now.Economists predict that an initial cap on rolloffs — set at €15bn a month through June — will rise by €5bn in the third quarter and again around the turn of the year, holding steady at €25bn through 2024. A third can envisage outright sales of bonds sometime in the future.About three-quarters of respondents expect the ECB to reduce its stock of public-sector, corporate and covered bonds in proportion to its holdings. Four predict a focus on public-sector debt, while three see a preference for securities issued by the private sector.Economists are split on whether the proceeds of maturing sovereign bonds will be reinvested in securities issued by that country, or across the region.The latter strategy is already in use for the ECB’s pandemic portfolio, allowing a more nimble response to bouts of market stress.

The global auto industry has committed $1.2tn to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to grab contracts providing everything from battery packs to motors and inverters.Startups specialising in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts.Carmakers design platforms to last a decade, so high-volume models can generate large revenues for years.The next generation of EVs is due to hit around 2025 and many carmakers have sought help plugging gaps in their expertise, providing a window of opportunity for new suppliers.“We’ve gone back to the days of Henry Ford where everyone is asking ‘how do you make these things work properly?’,” says Nick Fry, CEO of F1 engineering and technology firm McLaren Applied.“That’s a huge opportunity for companies like us.” Bought from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for EVs.An inverter helps control the flow of electricity to and from the battery pack.The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lb) and can extend an EV’s range by over 7%. Fry says McLaren Applied is working with around 20 carmakers and suppliers, and the inverter will appear in high-volume luxury EV models starting January 2025.Mass-market carmakers often prefer to develop EV components in-house and own the technology themselves.After years of pandemic-related parts shortages, they are wary of over-reliance on suppliers.“We just can’t afford to be reliant on third parties making those investments for us,” said Tim Slatter, head of Ford in Britain.Traditional suppliers, such as German heavyweights Bosch and Continental, are also investing heavily in EVs and other technologies to stay ahead in a fast-changing industry.But smaller companies say there are still opportunities, particularly with low-volume manufacturers that cannot afford huge EV investments, or luxury and high-performance carmakers seeking an edge.Croatia’s Rimac, an electric hypercar maker part-owned by Germany’s Porsche AG that also supplies battery systems and powertrain components to other automakers, says an undisclosed German carmaker will use a Rimac battery system in a high-performance model — with annual production of around 40,000 units — starting this year, with more signed up.“We need to be 20%, 30% better than what they can do and then they work with us,” CEO Mate Rimac says. “If they can make a 100-kilowatt hour battery pack, we must make a 130-kilowatt pack in the same dimensions for the same cost.”Some suppliers like Cambridge, Massachusetts-based Actnano have had long relationships with EV pioneer Tesla.Actnano has developed a coating that protects EV parts from condensation and its business has spread to advanced driver-assistance systems (ADAS), as well as other carmakers including Volvo, Ford, BMW and Porsche. California-based startup CelLink has developed an entirely automated, flat and easy-to-install “flex harness”, instead of a wire harness to group and guide cables in a vehicle.CEO Kevin Coakley would not identify customers but said CelLink’s harnesses had been installed in around a mn EVs. Only Tesla has that scale.Coakley said CelLink was working with US and European carmakers, and with a European battery maker on battery wiring. Others are focused on low-volume manufacturers, like UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make themselves.“Currently it costs just too much to electrify, which is why you see some manufacturers delaying their electrification launch,” CEO James Eaton said.Since 1971, Swindon Powertrain has developed powerful motorsports engines.But it has now also developed battery packs, electric powertrains, e-axles and is working with around 20 customers, including carmakers and an electric vertical take-off and landing (eVTOL) aircraft maker.“I realised if we don’t embrace this, we’re going to end up working for museums,” said managing director Raphael Caille.But time may be running out. Mate Rimac says major carmakers scrambled in the last three years to roll out EVs and now have strategies largely in place.“For those who haven’t signed projects, I’m not sure how long the window of opportunity will remain open,” he said.

The euro hit a nine-month peak against the dollar yesterday as comments signalling additional jumbo interest rate rises in Europe contrasted with market pricing for a less aggressive Federal Reserve.The euro reached as high as $1.0927, breaking the recent peak of $1.08875, to trade at its highest level since April last year.It was last up 0.2% at $1.0878. The single currency was aided by European Central Bank (ECB) governing council members Klaas Knot and Peter Kazimir, who both advocated for two more 50 basis point hikes at meetings in February and March.A Reuters survey of analysts also favoured hikes of 50 basis points at the next two meetings and an eventual rate peak of 3.25%, from the current rate of 2%. The euro was also being supported by an easing of recession fears amid a fall in natural gas prices, according to Rabobank head of currency strategy Jane Foley. “The growth in confidence in the economic outlook, or at least the removal of a lot of the pessimism, is part of the euro story,” Foley said.“Layered on top of that, it looks as if the ECB are going to carry on hiking interest rates fairly aggressively,” Foley added.In contrast, futures have priced out almost any chance the Fed could move by 50 basis points next month and have steadily lowered the likely peak for rates to 4.75-5.0%, from the current 4.25-4.50%.Investors also have around 50 basis points of US rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. Flash surveys on January economic activity due this week are forecast to show more improvement in Europe amid falling energy costs than in the United States.“The US has lost its global growth leadership position if most recent PMI surveys are to be believed,” said Ray Attrill, head of FX strategy at NAB.“Additionally, US inflation is seen falling further and faster than the Fed’s own projections,” he added. “Under this scenario, the USD has scope to fall much further this year.”The dollar index, which measures the greenback against a basket of currencies including the euro, was flat at 109.96, a whisker away from its eight-month trough of 101.510.The dollar rose against the yen, holding firm after the Bank of Japan (BoJ) defied market pressure to reverse its ultra-easy bond control policy last week.Analysts assume the BoJ will stand the line until at least the next policy meeting in March, though one hurdle will be the expected naming of a new BoJ governor in February. The dollar was up 0.6% at 130.345 yen, following last week’s wild gyrations between 127.22 and 131.58.The Canadian dollar was a touch firmer at $1.3354 per US dollar, ahead of a Bank of Canada interest rate decision on Wednesday, with markets expecting a quarter-point rise to 4.5%. The pound rose as high as $1.24475, its highest in seven months, before turning 0.3% lower to $1.2355.An employee holds a bundle of euro banknotes at the Ninja Money Exchange in Tokyo. The euro hit a nine-month peak against the dollar yesterday as comments signalling additional jumbo interest rate rises in Europe contrasted with market pricing for a less aggressive Federal Reserve.

The United Arab Emirates and India are discussing ways to boost non-oil commerce in rupees as the Gulf country looks to strengthen ties with its second-largest trade partner.“We are still in early-stage discussions with India on this dirham-rupee trade,” Thani al-Zeyoudi, the UAE’s Minister of State for Foreign Trade, told Bloomberg Television in Davos, Switzerland. Another area he spotlighted in a separate interview on Friday is the role of cryptocurrencies in commerce.“Crypto will play a major role for UAE trade going forward,” al-Zeyoudi said. The UAE — and especially Dubai — has been working to lure the world’s largest firms with its crypto-friendly policies.“The most important thing is that we ensure global governance when it comes to cryptocurrencies and crypto companies,” al-Zeyoudi said. “We started attracting some of the companies to the country with the aim that we’ll build together the right governance and legal system, which are needed.”The UAE has been seeking to step up trade with crucial partners and last year signed multiple economic pacts with countries including India, Indonesia, Turkiye, Israel and Ukraine. In the coming months, the UAE expects to finalise similar agreements with Cambodia and Georgia, al-Zeyoudi said.The economic agreements are set to boost the UAE’s gross domestic product by 3.4% to 3.8% by 2030, he said.Opec’s third-biggest producer has long maintained a currency peg to the dollar and most trade in the Gulf is settled in the US currency. Total bilateral trade between the UAE and India was nearly $64bn in 2021, according to data compiled by Bloomberg.Oil sales in the Indian currency are “not under consideration,” al-Zeyoudi said. “This is only going to be focusing on non-oil trade.”Al-Zeyoudi’s statement echoes that of neighbouring Saudi Arabia. Earlier this week, Saudi Finance Minister Mohamed al-Jadaan said the kingdom is open to discussions about trade in currencies other than the US dollar.The dollar’s strength in the first half of last year and its weaponisation to enforce sanctions on Russia has given fresh impetus to some of the world’s biggest economies to explore ways to circumvent the US currency. China has looked to bolster the yuan’s global appeal and has been pushing to boost its use in transactions with major energy and commodity exporters.Discussions on a trade agreement with China are also taking place, the UAE minister said.“China is our first trade partner,” he said. “For sure, more is going to be good for consumers, for workers, for people, for businesses.”The UAE and neighbouring Gulf countries look relatively resilient to the risk of a global recession this year, mainly due to massive oil bounties they collected in 2022 and measures they have taken since the Covid-19 pandemic.Dubai, part of the seven emirates comprising the UAE, has seen an influx of businesses, entrepreneurs and tourists over the past couple of years.The UAE is “very immune” if a recession in the world economy materialises in 2023, al-Zeyoudi said. “We did excellently last year, and we’re going to have an excellent performance this year as well.”The government will also start imposing a 9% corporate tax later this year, a rare move in a region otherwise known for being tax-free. The UAE said it would slash other fees to offset the impact of the levy.“There will be an overlap for some time between the normal fees and the corporate tax,” al-Zeyoudi said. “It’s the first time we are applying it, it’s going to take some time.”

Global funds will pressure the Bank of Japan (BoJ) until it capitulates and tightens policy, after the central bank disappointed bond bears by refusing to lift its ceiling on sovereign yields.UBS Asset Management and Schroders Plc are sticking with bets Japanese government bond yields will rise on the expectation the BoJ will eventually stop capping the 10-year benchmark at 0.5%, even after it kept the so-called curve control policy unchanged on Wednesday. Torica Capital Pty also expects the central bank to fall in line and shift toward the global trend of raising rates.“We see no reason to square up shorts,” said Tom Nash, a money manager at UBS in Sydney, referring to his reluctance to close out bearish bets on Japanese bonds. “The yield-curve-control policy is not consistent with the current economic and political landscape and will need to be dismantled.”It’s been a long game for those betting against the BoJ’s policy stance as Governor Haruhiko Kuroda’s determination to stand pat for years left investors nursing heavy losses. While some of the wagers finally paid off in December when the central bank tweaked policy and yields rose, market players are now confronted with the tricky task of trying to gauge the timing of the next move.Kuroda and his BoJ colleagues kept their main policy settings unchanged Wednesday, leaving the key interest rate at minus 0.1% and the target for 10-year yields under the curve-control program around 0%. The decision surprised investors who were positioning for a change and sparked the biggest rally in Japanese bonds in a decade.The central bank also deployed a measure that some said could almost be taken as a doubling down on the easing stance: policy makers will decide on the interest rate for certain loans to commercial banks. Until now, these loans have essentially provided free money to banks for up to 10 years that they can use to buy bonds, thereby helping the BoJ keep yields down. Bowing to market pressure would “erode their credibility at a time they need it the most,” said Omar Slim, co-head of Asia ex-Japan fixed income at PineBridge Investments in Singapore. “The mother of all pivots is under way, but it will come in phases.”The BoJ is the last central bank with negative rates and yield-curve control, which makes it vulnerable to macro funds looking for the next big trade. Some funds say pressure on the BoJ will intensify as market functionality deteriorates. Investors have little to lose by shorting Japanese debt as the BoJ will allow yields to rise gradually as part of a move to normalize policy, said Raymond Lee, chief investment officer at Torica in Sydney.Kellie Wood, a money manager at Schroders, says Japan’s policy makers will have to capitulate at some point, given that higher yields will be at odds with their intention to maintain policy accommodation or market stability.“This is the reason why we believe the BoJ will follow the path of the Reserve Bank of Australia — ultimately removing yield-curve control as the market continues to pressure yields higher alongside persistent market instability,” she said. In the meantime, investors may look to renew speculative wagers against the yen as the BoJ’s decision to stand pat risks weakening the currency. The yen has strengthened over 18% against the dollar since sliding to a three-decade low in October as authorities intervened and bets mounted for a slower pace of US rate hikes. The currency largely recouped losses after dropping more than 2% versus the dollar immediately after the central bank’s announcement. However, until the BoJ relents, Japan’s currency may weaken to 135 per dollar from around 128 now, according to SAV Markets. National Australia Bank Ltd sees the currency dropping as low as 132.“I wouldn’t be surprised if USD/JPY makes a run at 132.50 near term,” said Richard Franulovich, head of foreign-exchange strategy at Westpac Banking Corp in Sydney. “The next BoJ meeting isn’t until March 9, so you’re asking a lot of markets to pivot back into expectations for a BoJ policy tweak in seven weeks’ time.” While it’s unclear when the BoJ will finally pull the trigger, investors such as Blue Edge Advisors Pte’s Calvin Yeoh are banking on bearish yen bets in the short term.

The Philippine central bank will likely end its monetary tightening with one or two more rate increases this quarter that will bring the key rate to around 6%, according to its governor.“The most likely scenario is that the last increase is the March meeting,” Bangko Sentral ng Pilipinas Governor Felipe Medalla said in an interview in his office on Friday. Asked what he thinks of analysts predicting BSP’s peak rate at 6% from the current 5.5%, he said: “I think they’re most likely right.” After delivering one of the region’s largest rate increases in the past year, the Philippines is at the tail end of its most aggressive tightening in two decades as the global outlook darkens and a stronger peso cools 14-year high inflation. Malaysia on Thursday unexpectedly held its rate steady in what could be the start of a wave of monetary pauses as Indonesia signalled it’s near peak rates.BSP will likely continue raising at its February 16 and March 23 meetings as “inflationary expectations are still high,” Medalla said. Unlike neighbours that used subsidies to fight price pressures, the Philippines leaned heavily on monetary policy, he said.Medalla, 72, said BSP’s credibility as an inflation-targeting central bank is on the line and he’d rather stay hawkish while inflation expectations are still high than prematurely call off tightening. Earlier this month, the governor flagged a quarter- or half-point move in February.Monetary settings will continue to be dependent on data including domestic inflation and Federal Reserve actions, Medalla said on Friday, adding that he thinks some of BSP’s other board members are “more hawkish than I am.”Once the central bank is done increasing rates, a 200-basis-point cut in the reserve requirement ratio from the current 12% is on the table, he said. “The moment it’s clear we’re not raising anymore and therefore we will not be confusing the market, then we’ll cut” RRR, most likely before his term ends in the middle of the year.BSP expects inflation to slow to within its 2%-4% target in the third quarter and slightly below 2% in early 2024, Medalla said. A peso that has advanced 8% against the dollar since slumping to a record low in October, could also help arrest price gains in a nation that imports goods including fuel and rice. Weeks ago, a kilo of onion was selling for nearly $12, more expensive than meat.“The strong dollar period is over unless there is a drastic change,” Medalla said. “We are giving the peso some room to appreciate, but we will buy opportunistically” to build up currency reserves.The long-time economics professor isn’t a fan of a strong currency. “Excessive appreciation is bad for the economy,” he said. The peso pared its gain to 0.2% on Friday after rising as much as 0.4% earlier.“Dovish signals and the BSP cautioning on a too-strong currency would provide some support to the USD/PHP after the sharp declines in recent weeks,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp in Manila.The Philippines won’t suffer from recession, Medalla said, predicting a worst-case scenario of 5% GDP growth this year. President Ferdinand Marcos Jr. this week said the economy will probably keep growing about 7% in 2023 despite a bleaker global outlook.The government will report fourth-quarter GDP on January 26.

The year ahead looks better than feared for the global economy but remains fraught with risks including escalation of the conflict in Ukraine and the emergence of a transatlantic trade war, the World Economic Forum’s final panel concluded.International Monetary Fund (IMF) Managing Director Kristalina Georgieva told the Davos audience that what had improved was the potential for China to boost growth and that the IMF now forecast Chinese growth of 4.4% for 2023.While that was likely to prompt the IMF in coming days to upgrade its current forecast of 2.7% growth for the year ahead, she cautioned against expecting any “dramatic improvement” on that figure.One risk tied to China’s reopening, with its potential to heat up global demand and prices for energy, was that it triggered a new wave of inflationary pressures only months after this bout had reached its peak.The week-long meeting was dominated by debate on a brewing dispute between the United States and Europe on subsidies for green energy transition, the growing debt distress in developing nations and abundant geopolitical risk around the planet.“My deepest concern is clearly the war in Ukraine,” French Finance Minister Bruno Le Maire told the panel, warning that escalation was possible while also arguing it had pushed the European Union to become more of a political force in its resolve to remain supportive of Ukraine. Le Maire, who is involved in efforts to resolve the dispute with Washington over a $369bn, state-subsidised climate transition which Europe says is anti-competition, said the plan must be compatible with similar efforts across the world.“The key question is not China First, US First, Europe First.The key question for all of us is Climate First,” said Le Maire, who will travel to Washington in coming days alongside German officials to discuss possible changes to the US plan.Former US Treasury Secretary Larry Summers said the Biden administration subsidies package and the planned effort by Europe on tackling climate change at least represented a long overdue stepping-up of activity on the green energy transition.“A subsidy war about a very good thing is good,” he told the panel. “That is a very healthy kind of competition relative to all the kinds of competition the world has seen,” he said, urging fair competition that did not “wall off others and try to take down others”.Wall Street executives in Davos said pessimism had eased as economies in the US and Europe stayed resilient and China loosened its Covid-19 policies.Describing 2022 as a “weird, weird year when you look at it”, European Central Bank (ECB) President Christine Lagarde called on governments to ensure that fiscal policy did not make the job of central bankers harder by heating up the economy.“’Stay the course’ is my mantra on monetary policy,” she said, reaffirming that the ECB planned to continue tightening for as long as needed. A return to Davos by corporate titans and their bankers after recent record Alpine temperatures has turned a spotlight on just how quickly they are moving to rein in carbon emissions.The number of organisations pledging to get to net-zero emissions by mid-century has soared in recent years, up 60% to more than 11,000 in September 2022, UN figures showed.Yet the world remains on course to miss its climate goals.Several bankers and executives at this year’s World Economic Forum (WEF) annual meeting in the Swiss ski resort of Davos said they were looking for ways to speed up the transition to a greener future.Increasingly, they said conversations in C-suites and with financiers had turned to the risks that climate change presented to businesses.“Suddenly people have realised that it is something that’s not just a way of presenting things, but that it is a necessity for survival,” said André Hoffmann, vice-chairman of Swiss drugmaker Roche.While there is agreement on the need for change, people were divided on the pace.Climate activist Greta Thunberg made the journey up the Swiss Alps to call on the global energy industry and its financiers to end all fossil fuel investments.Privately, bankers said the energy crisis in Ukraine had shown that they needed to fund a transition to renewable energy, which would take time.

Campaigners dumped a basket of 1,071 rotten apples outside the headquarters of Britain’s biggest police force yesterday, in protest at officers accused of domestic abuse and violence against women and girls.Refuge, a British domestic abuse charity, placed the imitation red and green apples outside the Metropolitan Police’s New Scotland Yard building in central London, alongside a sign saying: “1071 bad apples. How many more?”The Metropolitan Police said this week that 1,071 officers had been or are under investigation after one of its officers pleaded guilty to 24 rapes and a string of other sex offences.That came less than two years after another serving officer with the London force kidnapped, raped and murdered a young woman, rocking public confidence in the police.“We’ve been told time and time again that it’s just one bad apple here and there, but this is actually a fundamental problem right across policing,” said Ruth Davison, head of Refuge, which organised the protest.“It has to be called out now because women’s lives are at risk,” she told AFP.“How have these perpetrators of abuse been allowed to enter and remain in positions of power for so long?” Davison said. “What happens next must change the culture of policing for good. A force which breeds violent misogyny is not a force which can even begin to protect women and girls.”She called for any officer facing formal allegations to be suspended while an investigation takes place.“At the moment, as women and girls, how can we – if we experience a crime – feel confident to go the police knowing that the person we speak to may be a perpetrator?” she said.The protest outside New Scotland Yard follows comments by the head teacher of a leading private London girls’ school, who said pupils now had to be warned not to approach police officers.Fionnuala Kennedy, head of Wimbledon High School, said the failings of the Met Police to “stand between the vulnerable public and these officers wielding unchecked power” left her “breathless with anger”.She wrote on her school blog that teachers now had to tell pupils “Don’t allow a lone policeman to approach you, at any time”.Both David Carrick, who pleaded guilty this week, and Wayne Couzens, who murdered Sarah Everard in 2021 and was jailed for life, served in the Met’s armed unit protecting MPs and foreign diplomats.Carrick will be sentenced next month.After his court appearance on Monday, Met Police’s Assistant Commissioner Louisa Rolfe said his case was “sickening and horrific” and acknowledged that it had “far-reaching consequences” for policing.“I can’t believe that we are operating in a context where we tell our children you may not be safe to approach the police,” said Davison.“Trust and confidence is at an all-time low in the police. David Carrick was able to say to people ‘I’m a police officer. No one will believe you, it’ll be your word against mine’ ... which is why we have to have a zero-tolerance approach,” she said.Refuge has called for “urgent and radical change” and advocated for fast-track legislation to improve vetting and disciplinary standards across police forces and mandatory training for all officers on issues concerning violence against women.A Met spokesperson said the force was aware of yesterday’s protest, and its officers had engaged with those involved to facilitate a peaceful demonstration.It said the protesters left at 1000 GMT and took the apples with them.

The world’s biggest oil company is confident demand will pick up strongly this year as China reopens its economy and the aviation market recovers.“We are very optimistic in terms of demand coming back to the market,” Saudi Aramco’s chief executive officer, Amin Nasser, said in an interview. “We are starting to see good signs coming out of China. Hopefully, in the next couple of months, we’ll see more of a pickup in the economy there.”Demand for jet fuel is now around 1mn barrels a day below pre-pandemic levels, according to Nasser, roughly half the figure from a year ago. “It’s picking up,” he said at the World Economic Forum in Davos.Oil prices whipsawed in 2022. Brent crude surged to almost $130 a barrel in the wake of Russia’s attack on Ukraine, but slumped in recent months as the Chinese, US and European economies slowed. It’s trading at about $86.80 a barrel, up 1% since the end of December.Many Wall Street banks, including Goldman Sachs Group Inc, expect it to climb above $100 a barrel in the second half of the year. They cite a global economic rebound by that time, low fuel stockpiles in nations such as the US and the potential for Russian exports to drop as the west tightens sanctions.Nasser reiterated that companies need to invest more in oil production. Idle capacity stands at 2mn barrels a day, barely above total demand of 100mn barrels, and will probably drop as China ends its coronavirus lockdowns, he said.The world needs 4-6mn barrels a day of new production just to make up for the natural decline in existing fields, according to the CEO.“We’re moving into the situation where we’re eroding spare capacity and any supply interruptions will have a huge impact,” he said.“We will be in a situation similar to natural gas,” he said, referring to how prices for the fuel jumped to the equivalent of $250 a barrel after Russia’s invasion.The Saudi Arabian state-controlled company sees oil demand continuing to grow for the rest of the decade, even as electric vehicles become more popular and investors pour money into renewable energy.“It’s offsetting some of the demand” for oil, said the CEO. Still, crude consumption will “definitely” be higher in 2030.The increasing use of petrochemicals — feedstocks for everything from plastics to fertilisers and clothes — is positive for Aramco, he said.The company wants to convert 4mn barrels a day of crude into petrochemicals by the end of the decade. It’s looking at more investments in Chinese refineries and liquid-to-chemical plants as part of that push, said Nasser.“We’re in serious discussions with so many entities” in China, he said.Last year, Aramco and its chemicals subsidiary, Sabic, said they were planning to build a 320,000 barrels-per-day refinery at Gulei, a coastal Chinese town.Aramco is also investing billions of dollars in hydrogen, a fuel seen as crucial to the transition to cleaner forms of energy. The Saudi firm aims to export blue hydrogen, made by converting natural gas and capturing the carbon dioxide emitted in the process, on a large scale from about 2030.Talks with potential importers in Japan and South Korea are progressing, though they’ll probably need to get assurances of financial support from their governments before they sign any supply contracts, Nasser said.“They think they’ll be able to do it in 2023,” he said. “We’ll see.”Blue hydrogen may end up costing the equivalent of around $250 a barrel of oil, Nasser said, though Aramco won’t know until it’s done more research.“It’s not going to be $80 or $100” a barrel, he said. “This is cleaner — it costs more.”Negotiations with European firms are proving tougher, primarily because they want to wait for technological advances to bring down the price of blue hydrogen.

Renault SA and China’s Geely Automobile Holdings are working to finalise a deal to bring Saudi Aramco in as an investor and partner to develop and supply gasoline engines and hybrid technologies, three people with knowledge of the talks said.The Saudi oil producer has been involved in advanced discussions to take a stake of up to 20% in a previously announced but still-unnamed Geely-Renault powertrain technology company that the automakers are working to establish, the three people told Reuters.Big oil firms have worked with automakers to develop sustainable fuels and hydrogen engines in recent years.But if a deal is agreed, Aramco would be the first major oil producer to invest in the car business, as the rise of electric cars threatens to cut demand for conventional fuels.According to a document prepared by the companies and viewed by Reuters, the aim is to establish a powertrain company this year with a production capacity of more than 5mn “low-emission and hybrid engines and transmissions” annually.A 20% stake for Aramco would leave Renault and Geely with 40% each in the joint venture, which would combine a carve-out of the French automaker’s existing combustion-engine production with Geely’s gasoline and hybrid technology and related assets, the people told Reuters.Renault and Geely both declined to comment.Aramco did not immediately respond to a request for comment from Reuters.The new joint-venture — codenamed “Horse” by Renault and “Rubik” by Geely — is aimed at developing more-efficient gasoline engines and hybrid systems at a time when the focus of much of the automobile industry has been on the capital-intensive transition to purely electric vehicles, two of the people said.The financial terms of the potential investment by Aramco in the joint venture were not immediately known.According to the document, Aramco’s investment would be used to support development of decarbonisation technologies for gasoline engines.Aramco would also contribute to research and development of powertrain technologies, especially synthetic fuel solutions and next-generation hydrogen technologies, the document said.The people who described the outline of the deal being negotiated asked not to be named because it has not been announced.Last year, Aramco announced a partnership with Hyundai Motor Co to study advanced fuels that could be used in hybrid engines to reduce CO2 emissions.Aramco’s deal with Geely and Renault still needs approval by the boards of the automakers, one of the people said.The three companies are working to complete a letter of intent in the coming weeks, one of the sources said.Geely and Renault when they announced the new venture last year said it would employ 19,000 people at 17 powertrain factories and three research and development hubs.By carving out its internal-combustion-engine business, Renault plans to focus on electric cars, part of the French automaker’s effort to revamp its alliance with Nissan Motor Co.As part of that, Renault is trying to convince Nissan to invest in its new electric vehicle unit.For Geely, the deal with Renault extends its pattern of building partnerships to expand beyond China.A strategic focus for the joint venture will likely be on an advanced four-cylinder engine, two of the sources said.One way to use those engines would be as a dedicated power generator to supply a charge to a hybrid car’s battery system, rather than powering the vehicle directly when the battery charge was low, one of them said.In that kind of arrangement, gasoline engines could be designed to operate in an “exceptionally efficient mode”, one of the sources said.Geely previously announced a hybrid gasoline engine development deal with Mercedes-Benz and holds a stake in the German automaker.The new Geely-Renault joint venture is not the only company betting on the view that fuel-efficient hybrids will remain part of the mix even as more automakers roll out electric vehicles.

China’s Vice-Premier Liu He welcomed foreign investment and declared his country open to the world yesterday after three years of pandemic isolation. Liu’s explicit pitch to global leaders gathered in Davos made it clear China wants international investors to play a key role in Beijing’s attempts to revive its slowing economy.“Foreign investments are welcome in China, and the door to China will only open up further,” Liu, a top economic tsar and confidant of President Xi Jinping, said.His speech to the World Economic Forum’s (WEF) annual meeting mentioned “strengthening international co-operation” and “maintaining world peace” 11 times.Liu made his speech as the release of new population data sounded an alarm on a demographic crisis with profound implications for the world’s second largest economy.New GDP data also showed economic growth slumped in 2022 to the worst level in nearly half a century.Liu’s visit to the Swiss ski resort is the first trip abroad by a high-level Chinese delegation since Beijing abruptly began dropping its “zero-Covid” curbs that shielded its 1.4bn people from the coronavirus last month. That policy also cut off China from the rest of the world for the past three years, stifling foreign investment.At Davos, Liu is sitting down with CEOs of finance, tech, consumer and industrial companies, a Chinese official familiar with the matter told Reuters.He will also meet other world leaders. In his speech, Liu said he had caught up with many old friends, having last attended Davos in 2018.Former US Treasury Secretary Lawrence Summers told Reuters he spoke with Liu on Monday for more than an hour, without giving details.Yesterday, Liu will meet US Treasury Secretary Janet Yellen in Zurich for their first in-person meeting, although they have met virtually three time since she took office. Liu’s speech was another sign of Beijing’s increased engagement with other countries in recent weeks.A recent thawing of relations with Australia paved the way for China to resume imports of Australian coal after a three year halt. And in November, Chinese President Xi Jinping and US President Joe Biden met on the Indonesian island of Bali where they agreed to follow-ups, including a planned visit to China by Secretary of State Antony Blinken in early 2023.The visit by the high-level Chinese delegation to Davos also contrasted with the conspicuous absence of Russia, a key ally whose invasion of Ukraine China has refused to condemn.China’s relations with the US and its allies have grown more tense throughout the Covid-19 pandemic, with Beijing and Washington sparring on issues from technology to Taiwan.The bosses of global investor Fidelity International and accountancy giant EY yesterday were among the business leaders attending Davos who voiced concern about a potential decoupling of the two economies.Liu’s speech was aimed at addressing investor concerns, said Xingdong Chen, Chief China Economist and Head of BNPP Markets. “Liu He, on behalf of Xi, wants to clarify the policy confusion and misunderstanding, and to reassure the world China will continue the market-oriented reform and opening.”The speech, he said, explained key concepts the ruling Communist Party has been pushing, such as the Chinese model of modernisation and common prosperity. “It seems the new leaders are reversing leftward policy changes and re-embarking on Deng Xiaoping’s line of reform and opening,” he added.Whether global investors and leaders buy into China’s new sales pitch remains to be seen.US Congressman Seth Moulton, also in Davos, said he was highly worried about China’s stance on Taiwan. Moulton, a Democrat, said the shift in tone did nothing to allay his fears.Earlier, European Commission President Ursula von der Leyen said Europe must seek to work and trade with China, rather than decouple from it.But she cautioned that Chinese subsidies were restricting access to the clean tech sector for European companies.In addition to zero-Covid, the Chinese economy has been squeezed by a crisis in its vast property sector and a wide-ranging regulatory crackdown on sectors from technology to education, which have in turn hit foreign investment sentiment. Liu referred to efforts by Chinese authorities to resolve a liquidity crunch in its real estate sector.He also said the country would continue to promote entrepreneurship and support the private sector, echoing recent signals from top Chinese officials that they would ease the crackdown.

Saudi Arabia is open to discussions about trade in currencies other than the US dollar, according to the kingdom’s finance minister, in what could be another challenge to the greenback’s hegemony.“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Mohamed al-Jadaan told Bloomberg TV yesterday in an interview in Davos.“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” al-Jadaan said.The world’s largest oil exporter, which has maintained a currency peg to the dollar for decades, is seeking to strengthen its relations with crucial trade partners including China. The kingdom is a pillar a petrodollar system established in the 1970s that relies on pricing crude exports in the US currency.During President Xi Jinping’s visit to Riyadh last year, the two countries agreed to boost co-ordination on energy policy and exploration. During that trip Xi said that China would make efforts to buy more oil from the Middle East and also wanted to settle that trade in the yuan.“We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries who are willing and able to work with us,” al-Jadaan said.Saudi Arabia is also working with multilateral institutions to provide support to Pakistan, Turkiye and Egypt, as part of the kingdom’s largesse to nations it deems “vulnerable,” al-Jadaan said.“We are investing heavily in these countries and will continue to look for opportunities to invest,” he said. “It’s very important to bring stability.”The minister said his country is looking to invest $10bn in Pakistan. It already extended the term of a $3bn deposit to boost its foreign-currency reserves late last year, and Saudi Arabia is now exploring the possibility of increasing the amount.“We are providing even oil and derivatives to support their energy needs,” al-Jadaan said. “So there is a lot of efforts, but we wanted this to be conducted.”The kingdom is also discussing with the World Bank and other institutions how can it be “more creative to provide that support” to Pakistan, the minister said.Saudi confident on attracting more foreign investorsSaudi Arabia is confident it can attract enough large-scale investment to make significant strides in diversifying the economy of the world’s largest oil exporter, according to a top official.Authorities believe they have “so many enablers that can attract a lot of partners,” said the Saudi Minister of Economy and Planning, Faisal Alibrahim, citing the kingdom’s access to natural resources, regulatory changes, and its mostly young population, reports Bloomberg.“We have the right kind of incentive structures and governance and processes in order to attract the right kind of investors for the right kind of returns for them as partners,” Alibrahim said an interview on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland.Hitting targets for attracting foreign direct investment as part of Crown Prince Mohamed bin Salman’s plans to overhaul the Saudi economy has been a challenge. That plan envisages lifting foreign investment to 5.7% of economic output.Yet most of the $19.3bn foreign investment in 2021 — the most since 2010 — came from state oil company Saudi Aramco selling part of its pipeline unit, rather than going into new industries.The Saudi government has made more than 700 regulatory changes as it seeks to attract investors, said Alibrahim. “We’re very serious about our diversification efforts,” he said. “We’re open and we’re talking to all partners who’re interested in the Saudi story.”Saudi Arabia saw the strongest increase in employment in almost five years as business conditions in its non-oil economy — the engine of job creation for the kingdom — improved at a slightly slower pace at the end of last year following a surge.“We still want to create more jobs and we want to even reach higher levels.” said Alibrahim. He doesn’t see higher interest rates impacting the Saudi private sector.

Iraq’s local currency has been on a two-month roller coaster ride following a tightening of procedures for international transfers, with some blaming Washington for the dinar’s woes.While the official exchange rate has been fixed at 1,470 Iraqi dinars against the dollar, the currency was trading at up to 1,600 to the greenback on local markets from mid-November, before settling at about 1,570 dinars, according to state media.Though the depreciation does not seem particularly dramatic, especially compared to other countries in the region, it has sent panic through the Iraqi population, which fears a price surge on imported goods such as gas and wheat.“The fundamental reason” for this depreciation is “external constraints”, said Muzhar Saleh, a financial adviser to Prime Minister Mohamed Shia al-Sudani.But other Iraqi officials have placed the blame squarely on the shoulders of one actor: the United States.Hadi al-Ameri, a key figure in the former paramilitary Hashed al-Shaabi, has accused the United States of using the dollar “as a weapon to starve nations”. But Iraqi economic expert Ahmed Tabaqchali said that “contrary to current misconceptions, rumours and misinformation, there is no evidence of US pressure on Iraq”.Since mid-November, Iraqi banks have had to comply with certain criteria of the SWIFT international transfer system in order to access their foreign reserves, estimated at $100bn and held at the US Federal Reserve.“Taking part in the international cross-border fund transfers requires complying with global anti-money laundering provisions, counter terrorist financing provisions, and sanctions provisions — such as those that apply to Iran or Russia,” Tabaqchali said.“The new regulations require high levels of disclosure and transparency,” he said, adding that this came as a “shock for many...of our banks, who were not used to this”.According to Saleh, Iraqi banks must now register their dollar transfers “on an online platform that reviews transfer requests”.“The US Federal Reserve examines the requests and if there are any suspicions, it stops the transfer,” he said.Since the adoption of the new mechanism in November, the US Federal Reserve has blocked about 80% of transfer requests to Iraqi banks due to doubts over the final destination of these transfers, according to Saleh.This has led to a shortage of dollars on the Iraqi market and in turn a depreciation in the dinar’s value.The Iraqi central bank has described the currency fluctuation as a “temporary situation” and the authorities have taken measures seeking to stabilise the exchange rate.These have included facilitating dollar trade in the private sector through Iraqi banks and opening foreign exchange outlets at state-owned banks for those wishing to travel abroad.The cabinet has also decided to “oblige all state bodies to sell goods and services in Iraq in dinars at the central bank’s exchange rate” of 1,470 to the dollar. Saleh argued that “these measures are important as they show that the state is there to protect the market and citizens.”Inflation was at a relatively low 5.3% year-on-year in October 2022 when it was last registered. But fears remain over the declining purchasing power among Iraqis.Saad al-Tai, a retiree who helps his son run a small shop in Baghdad’s Karrada district, is feeling the heat of the fluctuating exchange rate, describing it as “a real problem” for both traders and customers.“When the dollar was valued at 1,470, my pension was worth $336. Today, the exchange rate is 1,570 dinars and my pension is worth $314,” he said.

Two-thirds of private and public sector chief economists surveyed by the World Economic Forum (WEF) expect a global recession in 2023, the Davos-organiser said yesterday as business and government leaders gathered for its annual meeting.Some 18% considered a world recession “extremely likely” — more than twice as many as in the previous survey conducted in September 2022.Only one-third of respondents to the survey viewed it as unlikely this year.“The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in a statement accompanying the survey results.The organisation’s survey was based on 22 responses from a group of senior economists drawn from international agencies including the International Monetary Fund, investment banks, multinationals and reinsurance groups. The survey comes after the World Bank last week slashed its 2023 growth forecasts to levels close to recession for many countries as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues, and the world’s major economic engines sputter.Definitions of what constitutes recession differ around the world but generally include the prospect of shrinking economies, possibly with high inflation in a “stagflation” scenario.On inflation, the WEF survey saw large regional variations: the proportion expecting high inflation in 2023 ranged from just 5% for China to 57% for Europe, where the impact of last year’s rise in energy prices has spread to the wider economy.A majority of the economists see further monetary policy tightening in Europe and the United States (59% and 55%, respectively), with policy-makers caught between the risks of tightening too much or too little.While a global slowdown would risk hitting investment in areas from education and health to tackling poverty and climate, some see it driving inflation down and forcing the US Federal Reserve and others to hold back from further rate hikes. “I want the outlook to become a little weaker so that the Fed rates start going down and that whole sucking-out of liquidity by global central banks eases,” Sumant Sinha, chairman and CEO of Indian clean energy group ReNew Power, told Reuters on the sidelines of the Davos meeting.“That will benefit not just India but globally,” he said, adding the current round of rate hikes was making it dearer for clean energy companies to fund their capital-intensive projects.Others said that while more affluent people would likely escape the worst effects of recession on the back of high inflation levels, it would hit lower middle income groups hard.“If you only have your time and your energy which is creating your income, you’re getting ravaged right now because your wages are just not keeping pace,” said Anthony Scaramucci, founder of US-based investment firm SkyBridge Capital.Other main findings of the WEF survey included:Nine out of 10 respondents expect both weak demand and high borrowing costs to weigh on firms, with more than 60% also pointing to higher input costs.

Iranian oil exports hit new highs in the last two months of 2022 and are making a strong start to 2023 despite US sanctions, according to companies that track the flows, on higher shipments to China and Venezuela.Tehran’s oil exports have been limited since former US president Donald Trump in 2018 exited a 2015 nuclear accord and reimposed sanctions aimed at curbing oil exports and the associated revenue to Iran’s government.Exports have risen during the term of his successor President Joe Biden, who had sought to revive the nuclear deal, and hit the highest since 2019 on some estimates.This comes despite headwinds such as a stall in those talks and competition from discounted Russian crude.Energy consultant SVB International said Iran’s crude exports in December averaged 1.137mn barrels per day, up 42,000 bpd from November and the highest 2022 figure SVB has reported based on estimates given earlier.“In comparison to the Trump administration, there hasn’t been any serious crackdown or action against Iran’s oil exports,” said Sara Vakhshouri of SVB. “January exports were so far strong like previous months.” “Lower Chinese demand and Russia’s supply to China have been a major challenge for them. Most of its oil still goes to the Far East, ultimately China. Iran also helps Venezuela to export its oil.”Adrienne Watson, a National Security Council spokesperson at the White House, said the administration’s enforcement of the sanctions is robust, and “Iran’s macroeconomic figures clearly bear this out.”“We have not and will not hesitate to take action against sanctions evaders, together with sanctions against Iran’s missile and drone trade, and human rights violations against the Iranian people,” Watson said.Consultant Petro-Logistics, which tracks oil supply, said it was also seeing an upward trend in Iranian crude exports which, in its view, in December reached their highest level since March 2019.Kpler, a data intelligence firm, put Iranian crude exports at 1.23mn bpd in November, the highest since August 2022 and almost on a par with April 2019’s rate of 1.27mn bpd, although they slipped to just below 1mn bpd in December.The Iranian oil ministry did not respond to a request for comment on exports.Iran’s draft state budget is based on even higher shipments of 1.4mn bpd, the semi-official Fars news agency reported this week.China is Iran’s biggest customer.To evade sanctions, most of Iran’s crude exports to China are rebranded as crude from other countries, according to analysts including FGE.Also, Iran last year expanded its role in Venezuela, also under US sanctions, sending supplies of light oil for refining and diluents to produce exportable crude grades.There is no definitive figure for Iranian oil exports and estimates often fall into a wide range.Tanker-tracking companies use various methods to track the flows, including satellite data, port loading data and human intelligence.Iran generally does not release figures.According to another analyst, Vortexa, China’s December imports of Iranian oil hit a new record of 1.2mn bpd, up 130% from a year earlier.“Most of these shipments found home in Shandong, where independent refiners have turned to discounted grades since the second half of 2022 amid sluggish domestic demand and depressed refining margins,” the company said.The press department of China’s Foreign Ministry, in response to a request for comment, said: “The legitimate and reasonable cooperation between China and Iran under the international legal framework deserves respect and protection,” without directly addressing Reuters query on China’s record Iranian oil purchases.Vortexa said supply of Russian Urals, the main competing grade to Iranian oil, fell in December — when a price cap on Russian crude exports and European Union ban created uncertainty for buyers. A revived nuclear deal would allow Iran to boost sales to former buyers like South Korea and Europe.

Thousands of containers packed with essential food items, raw materials and medical equipment have been held up at Pakistan’s Karachi port as the country grapples with a desperate foreign exchange crisis.A shortage of crucial dollars has left banks refusing to issue new letters of credit for importers, hitting an economy already squeezed by soaring inflation and lacklustre growth.“I have been in the business for the past 40 years and I have not witnessed a worse time,” said Abdul Majeed, an official with the All Pakistan Customs Agents Association.He was speaking from an office near Karachi port, where shipping containers are stuck waiting for payment guarantees — packed with lentils, pharmaceuticals, diagnostic equipment and chemicals for Pakistan’s manufacturing industries.“We’ve got thousands of containers stranded at the port because of the shortage of dollars,” said Maqbool Ahmed Malik, chairman of the customs association, adding that operations were down at least 50%.State bank forex reserves this week dwindled to less than $6bn — the lowest in nearly nine years — with obligations of more than $8bn due in the first quarter alone.The reserves are enough to pay for around a month of imports, according to analysts.Pakistan’s economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, while devastating floods and a major shortage of energy have piled on further pressure.The South Asian nation’s enormous national debt — currently $274bn, or nearly 90% of gross domestic product — and the endless effort to service it makes Pakistan particularly vulnerable to economic shocks.Islamabad has been pinning its hopes on an IMF deal brokered under former prime minister Imran Khan, but the latest payment has been pending since September.The global lender is demanding the withdrawal of remaining subsidies on petroleum products and electricity aimed at helping the population of 220mn with the cost of living.Prime Minister Shehbaz Sharif this week urged the International Monetary Fund to give Pakistan some breathing space as it tackles the “nightmarish” situation.Zubair Gul, a 40-year-old father of four and daily wage labourer in Karachi, said it has become “hugely difficult” to live on his earnings.“I have to queue up for two or three hours to purchase subsidised flour — the regular prices are not affordable,” he told AFP.For Shah Meer, an office worker, borrowing from relatives or using credit cards are the only ways to get by.“A common man cannot afford to buy milk, sugar, pulses or any necessity you name,” he said.With an election due at the end of the year, implementing — or campaigning on — the tough conditions demanded by the IMF would be political suicide, but Pakistan is unlikely to secure fresh credit without making at least some cutbacks.On Thursday, the United Arab Emirates agreed to roll over $2bn owed by Pakistan and provide the country with an extra loan of $1bn, helping it to avoid immediate default.Islamabad won some relief last week when donors pledged over $9bn to help with recovery efforts after devastating monsoon floods left almost a third of the country under water last year.But that cash, even when it does arrive, will not help the current forex crisis, so Sharif continues to press allies — including Beijing — which has invested billions as part of the China-Pakistan Economic Corridor project.The forex crisis has deepened the woes of textile manufacturers, which are responsible for around 60% of Pakistan’s exports.They have suffered as a result of the country’s energy shortages, damage to cotton crops during the floods, and a recent hike in taxes.The troubles together have led to around 30% of power looms in the city of Faisalabad, the centre of the textiles industry, temporarily shutting down, with the remaining ones working on alternate days, said Baba Latif Ansari, head of the Labour Qaumi Movement union.

Cratering natural-gas prices thanks to warm winter weather are raising the odds that the eurozone’s inflation scourge will ease sooner than anticipated. After a year when consumer prices consistently overshot predictions following Russia’s invasion of Ukraine, the bloc kicks off 2023 with the prospect of that dynamic reversing and with its near-term economic outlook brightening.There’s even a chance headline inflation will reach the European Central Bank’s 2% target in the fourth quarter, rather than in 2025 as the institution forecast just a month ago, according to Joerg Angele, a senior economist at Bantleon in Zurich.If gas prices stay where they are, “there’d be massive downward pressure on inflation” he said. With the ECB’s December assumptions way above current market levels, its next set of projections may well be revised lower. The ECB “is off the mark again,” Angele said. “But this time in the other direction.”The catch is that uncertainty about the path for gas prices remains high, even as optimism builds that the worst of Europe’s energy crisis is behind it.Mild temperatures, more diversified supplies and efforts to cut consumption have eased much of the pressure unleashed when Russia attacked its neighbour almost a year ago. Gas inventories are far higher than the last five years’ average and prices have recently traded below pre-war levels.German Economy Minister Robert Habeck said this month that the danger of “a complete economic meltdown” appears to have been averted. The rosier outlook marks an about-turn from just a few months ago, when it was feared the region would struggle to keep the lights on during the colder months.Even so, much of the winter remains, and there are risks from any bouts of extreme weather or fresh supply disruptions. A cold snap is forecast for the region in the coming days. There are also concerns that Europe could face an even tougher year ahead as it struggles to rebuild the gas inventories previously supplied by Russia, while China’s sudden Covid reopening could create more demand for liquefied natural gas.“The impact of lower gas prices depends on whether they remain at these levels or whether it’s a temporary relaxation,” said Aila Mihr, an economist at Danske Bank in Copenhagen.“There’s still a risk that the situation could deteriorate in case of a new shock, or an attack on European energy infrastructure,” she said. “If the situation remains as it is, it means that the slowdown in energy inflation could come faster than previously expected.”The more favourable energy situation is making economists more bullish. Goldman Sachs and Bank of America last week dropped expectations that the eurozone will suffer a winter recession, saying lower gas prices will probably quicken the retreat in inflation. Such views were bolstered by data on Friday showing that Germany’s economy probably avoided a contraction in the final three months of 2022. Others, however, warn there’s a lot of pain still to come. While there’s a fairly direct link between wholesale gas prices and what consumers pay in countries like Italy and the Netherlands, Bantleon’s Angele says many households — renters in Germany, for instance — will still face with eye-watering heating bills this year. Finance ministers across the region, meanwhile, may breathe a sigh of relief as the myriad support measures they agreed on last year look like being cheaper than feared. Economists at Berenberg have already lowered their forecast for the euro region’s 2023 fiscal deficit to 3.7% from 4.3%. All of this is unlikely to make a big impression on ECB policymakers, who’ve lately emphasised their focus on underlying inflation that strips out volatile components like energy and food. That measure hit a record in December, with chief economist Philip Lane warning wage gains will keep it elevated.“The latest inflation optimism in markets has maybe been a bit much and they focused too much on headline inflation,” Danske’s Mihr said. “Core inflation is still rising and it’s the key determinant for the ECB in the near term. I don’t think that the slowdown in energy inflation will make them more dovish in the near term.”