Latest news with #economiccrisis
New York Times
8 hours ago
- Business
- New York Times
Quote of the Day: Economists See Trouble Ahead In G.O.P.'s Bill
'Investors are already jittery about this, so this is not just hypothetical.' DAIVID H. ROMER, economist at the University of California, Berkeley, on how the government's growing budget deficits are making bond investors nervous. Economists warn that could make it harder to respond to future crises. Page A1.
The Herald
8 hours ago
- Business
- The Herald
Struggling Eastern Cape schools in dire need of helping hand
Opinion Premium 03 June 2025 A friend of mine from Hwedza in rural Zimbabwe tells the story of how, at the height of the economic crisis in that country, teachers at mission schools (which were established by mainly the Catholic and Anglican churches) held the fort. He explains how, when the economy collapsed and inflation reached levels never seen before anywhere in the world, parents could no longer pay for school fees, buy stationery or provide any kind of subsistence for their children, including those in mission boarding schools...
Reuters
a day ago
- Business
- Reuters
Venezuela ramps ups taxes on private sector as Chevron oil exit bites
June 2 (Reuters) - Venezuela's government is increasing taxes and public service charges on the private sector to compensate for declining oil revenue after tighter U.S. sanctions, according to business leaders and analysts, who predict the measures will hinder already struggling private enterprise. Washington in February canceled key licenses for a handful of partners and customers of state oil company PDVSA ( including Chevron (CVX.N), opens new tab, that had allowed them to export Venezuelan oil under U.S. sanction exemptions. It also imposed secondary tariffs on Venezuela's oil buyers. Analysts estimate these actions could reduce the OPEC member's oil income, which was around $15 billion in 2024, by approximately 30%. This anticipated revenue loss has led the government to demand advance tax payments, conduct more audits, levy significant fines, and permit local authorities and public service providers to raise their fees, said a dozen businesspeople. These measures add pressure to a private sector grappling with years of economic crisis, high inflation, and currency controls. Neither the communications ministry, finance ministry nor tax agency responded to requests for comment. President Nicolas Maduro, who in April decreed an economic emergency that allows him to erase tax exemptions, had already asked officials in January to double tax income from $5.2 billion last year. Officials are heeding the call - tax revenues rose by about a fifth in the first quarter. Maduro's government has always rejected U.S. sanctions, referring to them as an "economic war". Businesspeople have held meetings with the government in a bid to have some taxes revised, three sources said, but to no avail. A May survey by the industrial guild Conindustria, which represents producers of food, chemicals, plastics and textiles, found that 77% of businesspeople identified the tax burden as the primary obstacle to their operations. About 60% of those surveyed plan little to no increase in production in the coming months. "Whatever additional tax is paid will come from the working capital," said Luigi Pisella, president of Conindustria. He added that the tax base must be expanded to avoid concentrating the burden on existing businesses. "Those who manage a bit of growth will be those who can manage this adverse environment," said one industrialist, who asked not to be named. Ruling party lawmaker Jose Vielma cheered the increased tax collection. "With higher tax take it has been possible to alleviate difficult economic moments," Vielma told Reuters. "We must thank the private sector, which has made a sufficient contribution." Analysts put it more bluntly. "Taxes are a lifesaver for the government," said Luis Barcenas, an economist at Venezuelan firm Ecoanalitica. The firm estimates the tax take could be as much as $13 billion this year and that companies are devoting half their earnings to tax payments. The Conindustria survey showed larger businesses do not expect to increase jobs, while medium-sized companies said they could reduce headcount by about 1%. "When you don't have working capital, you stop creating jobs," said one businessperson. Some sources, especially from the retail sector, said they are closing stores with lower sales. "When a customer pays for a product, they are paying for a good portion of the taxes that the merchant is giving to the state," said a businessman from central Venezuela, saying municipal taxes are also weighing heavily on prices. Local manufacturers tend to have factories in more than one municipality, meaning they are often liable to more local taxation than the few remaining international companies in Venezuela, who import products or have limited factories in-country. "For companies with local production the impact is even more critical," said the director of a foreign company, who asked not to be named. Outage-prone public services were heavily subsidized when oil income was generous, but prices have more than doubled in the year to March, according to the Venezuelan Finance Observatory. Inflation, which ended last year at 48%, is expected to reach 200% by the close of 2025.
Yahoo
2 days ago
- Business
- Yahoo
Ukraine says Russia's financial reserves may dry up in 2026
Russia has spent over half of its National Wealth Fund (NWF) during the three years of its invasion of Ukraine, says Ukraine's Foreign Intelligence Service. Source: Foreign Intelligence Service of Ukraine Details: If the current restrictions and additional measures imposed by the West are maintained, including increasing control over the circumvention of oil sanctions, the Russian Federation risks losing the last remnants of its national welfare fund as early as 2026. The report notes that the NWF's liquid assets had reached US$145 billion as of the beginning of July 2022. A year later, in July 2023, this figure had dropped to US$78 billion. On 1 May 2025, the reserves were down to only US$39 billion. Since the start of the full-scale war, the fund has reduced almost fourfold. "The average price of Brent oil is projected to be US$64 for a barrel in 2025 and US$60 in 2026. For Russia, whose budget is replenished with oil and gas revenues, such a dynamic creates critical fiscal risks," the report said. It is also pointed out that state corporation Rosatom's 2025 projects are still 80% underfunded, Russian railways is experiencing a drop in traffic, production in the mining, metallurgical, and construction sectors are falling and Russian corporations are suspending dividend payments in large numbers. "Despite this, Moscow continues to publicly demonstrate confidence in the stability of the economy. However, state-controlled propaganda that conceals the real extent of the economic downturn does not change the facts: the resource-based model of the Russian economy is losing efficiency," the Foreign Intelligence Service said. Support Ukrainska Pravda on Patreon!
Yahoo
3 days ago
- Business
- Yahoo
Fall of Mongolian coalition government could lead to severe economic downturn
Mongolia faces a crunch parliamentary vote on Monday which could lead to fall of coalition government New analysis from Mongolian Economic Development Board indicates this could lead to a sharp fall in national income and foreign direct investment (FDI), as well as spiralling inflation Political instability will jeopardise economic progress achieved in the last few years ULAANBAATAR, Mongolia, May 31, 2025 /CNW/ -- As Mongolia's parliament prepares to vote on Monday on whether the country's coalition government should remain in office, new economic analysis warns that the demise of the government could see the size of Mongolia's economy contract by over 20% within six months, and FDI fall by almost 40% year-on-year. Prime Minister Oyun-Erdene called on Wednesday for members of the Great State Khural to decide on whether the coalition government, which has been in place since last June's parliamentary elections, should remain as a way of ending recent political instability. The Prime Minister is due to address the Khural on Monday ahead of a 'confidence vote' – likely to be deemed one of the most important moments in Mongolia's political history since becoming a democracy in the early 1990s. As the vote approaches, new economic data – which can be viewed in full here – produced by Mongolia's Economic Development Board warns of the scale of the economic hit Mongolia could face, namely: A 22% reduction in Gross National Income within six months A 12.2% increase in inflation within a year Year-on-year unemployment rising to 2.5% The Mongolian Tugrik depreciating against the US Dollar by 17.9% by the end of 2025 An 18-point year-on-year decrease in Mongolia's Political Stability Index These forecasts are in line with the experiences of other countries where political instability has had a negative impact on the economy, including following the fall of a coalition government: According to data from the World Bank and other key sources, the coalition breakdown in Estonia caused FDI to tumble from 7.54% in 2021, to 0.74% in 2024, and its economic growth to stall from 7.3% in 2021, to -0.9% in 2024 An international study analysing data from up to 169 countries between 1960 and 2004 has concluded that high levels of political instability are associated with lower GDP per capita growth, particularly due to declining productivity growth and reduced accumulation of physical and human capital Commenting, Dr Batnasan B., Professor at the Business School of the National University of Mongolia and Member of the Economic Development Board, said: "The latest data clearly highlights the potential economic consequences of a collapse in Mongolia's coalition government: a sharp economic downturn, runaway inflation, and a rise in unemployment. "It is entirely appropriate that elected representatives decide who governs the country. But it is equally important that such decisions are made with full access to the facts and a clear understanding of the potential risks. "The Economic Development Board's analysis—combined with lessons from other countries that have faced similar circumstances—presents a compelling warning: all the hard-won economic progress Mongolia has achieved in recent years could be jeopardized if Monday's vote results in increased political instability." This new analysis, as well as precedent from around the world, clearly shows the magnitude of the decision to be taken by lawmakers on Monday, and the jeopardy to the significant economic progress Mongolia has made since the COVID-19 pandemic, including adding $9 billion USD to its economy and increasing GDP per capita by an additional $2,400. NOTES Economic Development Board of Mongolia: Full economic analysis available here: View original content: SOURCE Government of Mongolia View original content:
