<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-820x547.jpg" alt="" class="wp-image-427460" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/VQH6B3XWKFL7RPIVYJVD2ERGME-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China, March 7, 2016. REUTERS/Aly Song</figcaption></figure>



NEW YORK, Sept 13 (Reuters)&nbsp;&#8211;&nbsp;Chinese stocks took a record hit as foreign investors yanked $15.5 billion out of emerging market portfolios in August, the largest monthly outflow in a year, as concerns over China&#8217;s growth permeated across equities in an otherwise strong year for EMs.



A monthly report from the Institute of International Finance showed non-residents funneled $14.9 billion out of China stocks, the largest monthly outflow on records back to 2015, while Chinese debt saw $5.1 billion in outflows.



Investors were underwhelmed by China&#8217;s economic growth and a lack of fresh stimulus measures by the government at the end of July, as the government sacrifices steeper growth for shared prosperity. Fresh turbulence in the property sector added to the negative investor tone.



The broad MSCI stock and currency emerging market indexes posted in August their largest monthly drops since February.



The emerging market outflows highlight &#8220;the negative sentiment over (China&#8217;s) economic challenges, amid skepticism over measures to stem the economic slowdown,&#8221; according to IIF economist Jonathan Fortun.



Earlier on Wednesday Amundi, Europe&#8217;s largest asset manager, lowered its view on Chinese equities and said it has upgraded U.S. growth forecasts while downgrading China&#8217;s.



Equity outflows ex-China were $6.6 billion last month, the most since September 2022, while ex-China debt securities saw the seventh month of inflows in the last eight, adding $11.1 billion.



&#8220;Diminished currency volatility (&#8230;) is encouraging foreign creditors to benefit across EM local yield curves,&#8221; Fortun said.



Emerging Asia and Latin America saw outflows just below $5 billion last month, while the Africa and Middle East region posted $5.5 billion in negative flows, the IIF report showed.



Equities fell across all geographical regions while debt posted inflows in Asia, Latam and emerging Europe.



Year-to-date numbers through August show a $13.1 billion outflow from China while emerging markets ex-China has seen $139.5 billion in non-resident portfolio inflows.



(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)

Investors look at an electronic board showing stock information at a brokerage house in Shanghai

Chinese stocks lead foreign exodus from emerging markets in August -IIF

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-820x547.jpg" alt="" class="wp-image-427449" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bill Gates, co-chairman of the Bill and Melinda Gates Foundation, during the EEI 2023 event in Austin, Texas, US, on Monday, June 12, 2023. The event aims to address the major challenges and opportunities facing electric companies today. Photographer: Jordan Vonderhaar/Bloomberg via Getty Images</figcaption></figure>



Microsoft co-founder Bill Gates says artificial intelligence could transform production systems worldwide while fundamentally changing industries such as health and education.



While some experts are concerned that the nascent industry could threaten the survival of the human race, the American billionaire and investor points out that humanity has ridden out the creation of dangerous inventions such as nuclear weapons and viruses in the past.



“AI by itself, I don&#8217;t see as a threat,” Gates said in an exclusive interview with CNBC Africa. “There is a lot of long-term affects where AI could make us all so productive. It will change how we use our time but, we need to roll it out and we need to get the benefits which in every domain, particularly health and education, I am very excited about.”&nbsp;



Governments and companies globally are scrambling to harness and expand the opportunities that artificial intelligence is opening up in fields from industrial applications to language. Gates says it’s the most transformative innovation of our era.



“AI is a fundamental breakthrough, and in fact, the Bill &amp; Melinda Gates Foundation is using AI in a lot of ways,” he says referring to work done in the foundation’s 7th edition of the Goalkeepers Report, which he co-authored with Melinda French Gates, his ex-wife.



He cites an AI enabled portable ultrasound that empowers nurses and midwives to monitor high-risk pregnancies in low-resource settings to ensure that risks are diagnosed and addressed early.



In developing countries where hospitals are perennially battling shortages of doctors, Gates said AI can potentially accelerate science and help discover more vaccines as well as speed up new drug discoveries.&nbsp; According to Fox News, a new AI-generated COVID drug has entered the first phase for clinical trials, showing that AI is taking center stage in medicine.



&nbsp;“Over time, we see AI actually providing medical advancement. We are having a shortage of doctors and to make doctors more efficient, we give you an AI agent to help with medical advice. We also use AI to speed up the discovery of new drugs and vaccines,” he told CNBC Africa’s Godfrey Mutizwa.&nbsp; “Obviously, we are still missing the HIV, TB and Malaria vaccines so everything that accelerates science is very helpful.”



&nbsp;Across the globe, regulatory concerns are growing particularly relating to AI’s potential harm. In China, the world’s second largest economy, the government has taken the lead and outlined domestic regulations. But Gates suggests regulation is not yet.



“Well so far the AI hasn’t caused any huge problems and I think it&#8217;s great that there is this whole discussion,” he says. “Most of the discussion is about future versions that would be even more powerful than what would be rolled out in the next 3 to 4 years.”&nbsp;



Later Wednesday, U.S. Senate Majority leader Chuck Schumer is convening a cross party gathering with technology industry leaders including Gates, Tesla founder Elon Musk, Google CEO Sundar Pichai and Meta CEO Mark Zuckerberg to discuss regulating AI.

GettyImages-1258640786-1

Bill Gates Says he is `Excited’ by AI in Health and Education

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="563" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-820x563.jpg" alt="" class="wp-image-427446" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-820x563.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-300x206.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-131x90.jpg 131w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-768x527.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-1536x1054.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Chinas-central-bank-vows-to-support-demand-price-rebound-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Headquarters of the People&#8217;s Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee</figcaption></figure>



BEIJING, Sept 13 (Reuters) &#8211; China&#8217;s central bank will boost demand and support a modest rebound in prices, the Financial News, a publication run by the People&#8217;s Bank of China (PBOC) said on Wednesday, citing a unnamed senior central bank official.



The PBOC will ramp up its coordination with fiscal and industrial policies and strengthen the guidance of expectations, while closely monitoring the effects of financial policies, the official was quoted as saying.



The central bank &#8220;will create an appropriate monetary and financial environment to promote effective demand in the real economy, support a moderate recovery in prices and enhance economic vitality,&#8221; the official said.



China&#8217;s firm credit growth was also in line with the recovery, as borrowing costs in the real economy fell, the official was quoted as saying.



New bank loans beat expectations by nearly quadrupling in August from July&#8217;s level, as the central bank sought to shore up economic growth amid soft demand at home and abroad.



China has in recent weeks rolled out a series of measures, including interest rate cuts and property easing steps, to support the economy, which has struggled after the post-pandemic recovery faltered.



China&#8217;s consumer prices returned to positive growth in August as deflationary pressures eased amid signs of stabilisation in the economy.



Officials in Beijing have long said there is no basis for any long-term deflation.



&#8220;Reduction in existing mortgage rates will effectively reduce the interest burden on residents,&#8221; the official was quoted as saying.



Five of China&#8217;s major state banks said last week they will start to lower interest rates on existing mortgages for first-home loans, part of measures to aid the ailing property sector.



Early mortgage repayments have been reduced, which would help boost consumer confidence, said the official. (Reporting by Beijing Newsroom, Kevin Yao and Liangping Gao; Editing by Tom Hogue and Sam Holmes)

Headquarters of the PBOC, the central bank, is pictured in Beijing

China’s central bank vows to support demand, price rebound

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-820x461.jpg" alt="" class="wp-image-400703" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-3.jpg 2000w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An OPEC branded flag sits on a table ahead of the 169th Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, June 2, 2016. Saudi Arabia is ready to consider a surprise deal with fellow OPEC members, attempting to mend divisions that had grown so wide many dubbed the group as good as dead. Photographer: Akos Stiller/Bloomberg via Getty Images</figcaption></figure>



LONDON, Sept 12 (Reuters) &#8211; OPEC on Tuesday stuck to its forecasts for robust growth in global oil demand in 2023 and 2024 citing signs that major economies are faring better than expected despite headwinds such as high interest rates and elevated inflation.



World oil demand will rise by 2.25 million barrels per day (bpd) in 2024, compared with growth of 2.44 million bpd in 2023, the Organization of the Petroleum Exporting Countries said in a monthly report. Both forecasts were unchanged from last month.



A lifting of pandemic lockdowns in China has helped oil demand rise in 2023. OPEC has maintained a relatively upbeat view on 2024, seeing stronger demand growth than other forecasters such as the International Energy Agency.



&#8220;The ongoing global economic growth is forecast to drive oil demand, especially given the recovery in tourism, air travel and steady driving mobility,&#8221; OPEC said in the report. &#8220;Pre-COVID-19 levels of total global oil demand will be surpassed in 2023.&#8221;



Oil demand collapsed in 2020, prompting some predictions of an early peak in world oil use. OPEC has been consistently saying it would recover and said in the report demand would average 102.1 million bpd in 2023, above the pre-pandemic rate during 2019.



OPEC and its allies, known as OPEC+, began limiting supplies in 2022 to bolster the market. Global benchmark Brent crude breached $90 a barrel last week for the first time in 2023 after Saudi Arabia and Russia extended voluntary cuts until the end of the year.



Brent crude prices rose as high as $91.82 a barrel after the report was released, hitting a fresh 2023 high.



The IEA, which currently has a much lower view than OPEC of 2024 demand growth, issues its latest outlook on Wednesday.



ECONOMY RESILIENT



OPEC held its forecast for world economic growth this year at 2.7% and kept next year&#8217;s figure at 2.6% citing a resilient first half and a steady global growth trend that had continued into the third quarter.



&#8220;Emerging Asia, particularly India, Brazil and Russia, could further surprise to the upside,&#8221; OPEC said.



&#8220;Moreover, if the U.S. continues to keep its current momentum, growth could turn out to be higher than expected.&#8221;



The OPEC report also showed OPEC oil production rose in August driven by a recovery in Iran&#8217;s production despite U.S. sanctions remaining in place on Tehran and Saudi Arabia&#8217;s voluntary cuts, as well as an increase in Nigeria.



OPEC output rose by 113,000 bpd in August to 27.45 million bpd, the report said. A Reuters survey earlier found production had increased last month largely because of Iran.



Iran is exempt from OPEC and OPEC+ production cuts because of the sanctions and Nigeria has faced internal challenges that have limited output. (Reporting by Alex Lawler; editing by Jason Neely and David Evans)

The 169th Organization Of Petroleum Exporting Countries (OPEC) Conference

OPEC sticks to oil demand growth view citing resilient economy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-820x547.jpeg" alt="" class="wp-image-425963" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/07/107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership.jpeg 1905w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chinese President Xi Jinping waves after his speech as the new Politburo Standing Committee members meet the media following the 20th National Congress of the Communist Party of China, at the Great Hall of the People in Beijing, China October 23, 2022. REUTERS/Tingshu Wang/File Photo</figcaption></figure>



BENGALURU, Sept 12 (Reuters) &#8211; China&#8217;s economy will grow less than previously thought this year and next as a struggling property market dogs what was once the world&#8217;s growth engine, according to a Reuters poll of economists who said the risks were skewed to further downgrades.



The world&#8217;s second-largest economy has been struggling after a brief post-COVID recovery, dragged by huge debt due to decades of infrastructure investment and a property downturn, posing risks not only to itself but also to the global economy.



With 70% of household wealth tied up in the ailing property market, coupled with rising youth unemployment, weak consumption demand and the reluctance by depressed private firms to invest, policymakers have been fighting an uphill job in reviving growth.



&#8220;The primary culprit is the property sector. This source of growth has now evaporated and won&#8217;t be coming back,&#8221; said Julian Evans-Pritchard, head of China economics at Capital Economics in Singapore.



&#8220;We have long been more bearish than most…but even we have been surprised by the speed at which growth has declined. The deceleration probably still has further to run.&#8221;



The Sept. 4-11 Reuters poll of 76 analysts, based in and outside mainland China, predicted the economy would grow 5.0% this year, lower than 5.5% forecast in a July survey. Forecasts ranged between 4.5% and 5.5%.



While nearly all economists lowered their growth outlook for this year and next compared with the previous survey, the magnitude of those cuts was still marginal, leaving room for more downgrades.



Some economists cautioned the government&#8217;s growth target of around 5% for this year could be missed as the drip-feed of policy stimulus from Beijing would not be enough to stabilise the economy.



While recent data showed signs of improvement in the economy, some economists said more policy support was needed for the ailing property sector. The sector accounts for roughly a quarter of China&#8217;s economy.



Growth was forecast to slow to 4.5% next year and 4.3% in 2025. After expanding 6.3% last quarter, the economy was expected to grow just 4.2% this quarter, followed by 4.9% in the next, and down to just 3.9% in the first quarter of 2024.



&#8220;This slowdown could be just the tip of the iceberg,&#8221; said Bingnan Ye, senior economist at China Merchants Bank International in Hong Kong, who added the downside risk was &#8220;household consumption may improve more slowly than many expect.&#8221;



&#8220;Along with a slowdown in the property sector and exports, we still have U.S.-China trade tensions, and the recent diversification of supply chains beyond China will add to the downside pressure.&#8221;



A strong majority of economists who answered an additional question said the risks to their 2023 and 2024 GDP growth forecasts were skewed to the downside.



Economists also cut their consumer price inflation forecast to 0.6% for this year and 1.9% for next year, down from the previously expected 1.1% and 2.1% in the July survey.



Despite low inflation, the People&#8217;s Bank of China was expected to keep its key interest rates on hold this year.



Asked whether there would be an aggressive economic stimulus package from authorities, over three-quarters of economists, 17 of 21, said no.



&#8220;Local governments, which are responsible for (about) 85% of expenditures, are heavily indebted. This constrains the ability…to provide meaningful stimulus without further undermining their already fragile finances,&#8221; said Teeuwe Mevissen, senior macro strategist at Rabobank in the Netherlands.



(For other stories from the Reuters global economic poll: )



(Reporting by Vivek Mishra; Additional reporting by Devayani Sathyan; Analysis by Anant Chandak; Polling by Veronica Khongwir in Bengaluru and Jing Wang in Shanghai; Editing by Kevin Yao, Ross Finley and Sam Holmes)

107140189-16667014702022-10-23t070716z_5164924_rc2s6x9f6dpf_rtrmadp_0_china-congress-leadership

China 2023 GDP growth forecast cut to 5.0%, 4.5% in 2024 -economists

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="557" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-820x557.jpg" alt="" class="wp-image-427349" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-820x557.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-300x204.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-133x90.jpg 133w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-768x522.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-1536x1043.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/WAFT55ZOBBLJNCCICGSBZWTPSQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. President Joe Biden, Indian Prime Minister Narendra Modi and President of the European Union Ursula von der Leyen attend the G20 summit in New Delhi, India, September 9, 2023. REUTERS/Evelyn Hockstein/Pool/File Photo</figcaption></figure>



NEW DELHI, Sept 11 (Reuters)&nbsp;&#8211;&nbsp;The Group of 20 major economies reached a hard-fought compromise over the war in Ukraine and papered over other key differences in a summit declaration at the weekend, presenting few concrete achievements in its core remit of responses to global financial issues.



Diplomats and analysts said the surprise consensus in the summit statement on the Russia-Ukraine conflict avoided a split in the group, and the inclusion of the African Union as a new member represented a victory for host India and for developing economies, but the rest was disappointing.



&#8220;The G20 has been at its best as a multilateral forum when it can forge consensus &#8211; not just on language, but on action &#8211; to deal with serious global issues, such as global financial crises,&#8221; said Michael Froman, president of the New York-based Council on Foreign Relations.



&#8220;Looking ahead, the focus should be on that, not on the statement per se,&#8221; said Froman, a former U.S. trade representative who has also worked as Washington’s G20 and G8 negotiator.



The summit declaration avoided condemning Russia for the war in Ukraine but highlighted the human suffering the conflict had caused and called on all states not to use force to grab territory.



Few had expected the G20 to reach a consensus on the document, let alone on the first afternoon of the two-day summit, as the group had failed to agree on a single communique at the 20 or so ministerial meetings this year due to the hardened stance on the war.



A failure to agree on a summit declaration would have signalled that the G20 was split, perhaps irrevocably, between the West on one side and China and Russia on the other, analysts said.



And with Beijing pushing to reshuffle the world order by expanding groupings such as BRICS and the Shanghai Cooperation Organisation, G20 could have ended up becoming irrelevant, they said.



<h2 class="wp-block-heading" id="h-difficult-summit">DIFFICULT SUMMIT</h2>



G20 was set up as a platform of finance ministers and central bank governors in 1999 to counter the effects of the Asian financial crisis and the meeting was expanded to include leaders after the global financial crisis in 2008.



Its primary role of coordinating responses to economic issues &#8211; including global taxation and helping low-income nations manage their debt burden under the Common Framework in recent years &#8211; has been diluted because the need to seek a consensus has led to weak agreements, some analysts said.



This year, resolving differences on the Ukraine war and other issues took up a lengthy 25 days of negotiations, including in the week leading up to the summit, Svetlana Lukash, the Russian G20 sherpa, or government negotiator, was quoted as saying by Russian news agency Interfax.



&#8220;This was one of the most difficult G20 summits in the almost twenty-year history of the forum,&#8221; Lukash said.



The G20 process requires consensus on all decisions which means it will pursue the “lowest common denominator”, said Patryk Kugiel, a senior analyst at the Polish Institute of International Affairs in Warsaw.



“Therefore, we do not have any concrete and substantial decisions, commitments, pledges from G20 on any of the pressing global challenges, from climate change to debt,” Kugiel added. “It makes the forum ineffective, even useless.”



At the New Delhi gathering, the leaders agreed to pursue tripling renewable energy capacity globally by 2030 and accepted the need to phase-down unabated coal power.



However, they set no timetable and said the use of coal had to be wound down in line with national circumstances.



Coal, which is being phased out of the power system in many industrialised nations, is still a vital fuel in many developing economies and may remain so for decades to come.



The meeting also agreed to address debt vulnerabilities of poor countries and strengthen and reform multilateral development banks, but without setting any concrete goals.



There was also no progress on getting Russia to return to the Black Sea initiative although the declaration called for the safe flow of grain, food and fertiliser from both Ukraine and Russia.



<h2 class="wp-block-heading" id="h-fear-of-division-disappointment">FEAR OF DIVISION, DISAPPOINTMENT</h2>



For most major G20 members though, the summit declaration appeared to be a major gain since it reached a consensus on acceptable language to refer to the war in Ukraine.



Foreign Minister Sergei Lavrov, who represented Russia at the summit in place of the absent President Vladimir Putin, said India&#8217;s presidency, &#8220;probably for the first time during the entire G20 existence, has truly consolidated G20 participants from the Global South&#8221;.



Diplomats have said negotiators from India, Indonesia, Brazil and South Africa drove the consensus in the summit document.



The U.S., Germany and Britain all lauded the declaration.



There was no official word from China but its state-run news agency Xinhua, without referring to the declaration, said in a commentary on Saturday that G20 could still be made to work.



China&#8217;s presence was muted at the meeting with President Xi Jinping staying away and Beijing represented by Premier Li Qiang, who took his post in March this year.



A French official who was present at the summit said “G20 actually remains a club that&#8217;s capable of forging consensus between north and south and east and west”.



Despite the lack of concrete progress, Harsh Vardhan Shringla, India&#8217;s chief G20 coordinator, said the meeting did take the group forward.



“The concerns of the developing world are so great that if you failed &#8230; they would have to face much greater issues of division and, I would say, even disappointment,” he told Reuters.



(Additional reporting by Michel Rose and Aftab Ahmed; Editing by Raju Gopalakrishnan)

FILE PHOTO: India hosts G20 leaders’ summit

G20 summit agrees on words but struggles on action

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ-820x462.jpeg" alt="" class="wp-image-427345" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">During the G20 leaders’ summit, U.S. President Joe Biden called on G20 leaders to support the World Bank and other multilateral development banks to increase their ability to support low and middle-income countries. From left, World Bank President Ajay Banga, Brazil’s President Luiz Inacio Lula da Silva, India’s Prime Minister Narendra Modi, South Africa’s President Cyril Ramaphosa and U.S. President Joe Biden in New Delhi on Sept. 9, 2023. Evan Vucci | Afp | Getty Images</figcaption></figure>



World leaders have called for the World Bank’s expansion to boost its lending capacity — but that can’t happen without funding from the private sector, the bank said.&nbsp;



The World Bank is no longer just focused on eradicating poverty, but also on other impending global challenges — like pandemics, climate change and food insecurity, its president Ajay Banga told CNBC’s Tanvir Gill on Saturday.&nbsp;



“There’s no way there’s enough money in the multilateral development bank, or even in governments &#8230; that can drive the kinds of changes we need for this polycrisis. Getting the private sectors’ capital and ingenuity into the game is going to be very important,” he told CNBC in an exclusive interview on the sidelines of the Group of 20 nations leaders’ summit in New Delhi.



“We are digging deep to boost our lending capacity, but we are going further, creating new mechanisms that would allow us to do even more,” Banga said at the G20 leaders summit. 



“We’re working to expand concessional financing to help more low-income countries achieve their goals, while thinking creatively about how to encourage cooperation across borders and tackle shared challenges,” he added.&nbsp;



<h2 class="wp-block-heading" id="h-biden-backs-world-bank"><a></a>Biden backs World Bank</h2>



Leaders at the summit agreed that this isn’t something the World Bank can tackle alone.&nbsp;



During the summit, U.S. President Joe Biden called on G20 leaders to further support the World Bank and other multilateral development banks over the next year in order to increase the institution’s ability to support low and middle-income countries. 



Biden has asked Congress to increase the World Bank’s financing by more than $25 billion, a move that will enable the bank to further help developing countries achieve their development and economic goals. 



“This initiative will make the World Bank a stronger institution that is able to provide resources at the scale and speed needed to tackle global challenges and address the urgent needs of the poorest countries,” the White House said.&nbsp;



The World Bank was created in 1944 to help rebuilding efforts in Europe and Japan after the Second World War. It started with just 38 members but today includes most of the countries in the world.



Biden has previously said that developing countries need more funding options to reduce their dependency on China, and help them recover from the effects of Russia’s war on Ukraine. The administration asked for $3.3 billion to increase development and infrastructure finance by the World Bank.



“It is essential that we offer a credible alternative to the People’s Republic of China’s (PRC) coercive and unsustainable lending and infrastructure projects for developing countries around the world,” the White House said in August.



Apart from providing more resources to help developing countries reduce poverty, the World Bank’s expansion also aims to help these nations in their renewable energy transition.&nbsp;



“I do have the idea that if I could get a certain amount of money in the bank to put into say, renewable energy, could I get the private sector to put one-is-to-one, two-is-to-one, three-is-to-one?” Banga said.&nbsp;



He highlighted that investors are keen on investing in renewable energy in developing countries, and are confident that solar, wind and geothermal projects “can be built to make money.”&nbsp;



<h2 class="wp-block-heading"><a></a>‘Work together’</h2>



Both the World Bank and IMF have pledged to form a stronger partnership to help countries with their debt struggles, sustainability goals, and digital transition. 



In a separate interview with CNBC’s Martin Soong at the G20 summit, the IMF’s Managing Director Kristalina Georgieva said: “The world has changed. the horizon of how many different lenders there are and different conditions they provide their resources, is much, much broader that it was 10 years ago.”



“We need this conversation because if you don’t have it, we have no solutions and the debt problem is very pressing,” Georgieva said Sunday.



She added that “25% of debt of emerging markets is treading in distressed territory.”



“We now have more than half of of the low income countries either in or close to that distress.”



The IMF Chief reiterated that the World Bank and the fund must work to complement each other and promote synergies.



“The bank has very deep sectoral expertise. We don’t and we would never ever get into sectoral investments,” she explained.



“What we bring is how you can use fiscal policies to advance the transition to digital economy; how you can use monetary policy to assess the new types of risks — including from crypto from climate; and how you can use data to cover what matters to policymakers today and in the future.”



“The world needs institutions to work together,” she added, pledging that both the IMF and World Bank will work with others to “set the right example of what it means for the whole to be bigger than the sum of individual parts.”

107298227-1694419120111-gettyimages-1653684092-AFP_33UQ6YZ

To counter China, Biden is backing the World Bank for a bigger role on the global stage

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite-820x462.jpg" alt="" class="wp-image-427230" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite.jpg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The Central television transmission tower among urban buildings in Beijing, China, June 12, 2023. CFOTO | Future Publishing | Getty Images</figcaption></figure>



China is overinvested as its economy continues to get buffeted — but India has room for investment opportunities, said Morgan Stanley.



“China is overinvested. It’s overleveraged and it’s oversupplied. And then it has this geopolitical cloud over it,” said Jitania Kandhari, Morgan Stanley’s deputy CIO for solutions &amp; multi-asset and managing director.



This is in contrast to India, which Kandhari says is underinvested.



“It’s underinvested because investment to GDP was down, and now investment and manufacturing are hopefully picking up with the China-plus-one diversion of trade that is happening there,” Kandhari told CNBC’s “Squawk Box Asia.”



Recently companies have pursued a “China-plus-one” strategy as they diversify their supply chains in a bid for resilience.



<figure class="wp-block-pullquote has-text-align-left"><blockquote>India story definitely feels like it has legs.<cite>Jitania Kandhari DEPUTY CIO AT MORGAN STANLEY</cite></blockquote></figure>



Kandhari added that India is undersupplied in terms of homes and property, whereas “China has so many excesses.”



China’s real estate sector has been mired in debt and plagued by weak sales. New home sales for the top 100 developers sunk by about a third in June and July from a year ago, after double-digit growth earlier in the year, according to S&amp;P Global Ratings.



“India’s beginning a new cycle on the real estate side — made in India, work from India — with the global centers setting up there,” she elaborated.



“So India story definitely feels like it has legs.”



That being said, Kandhari feels that some pockets of China are still investable, hinging on the improvement of the country’s economic growth.



Kandhari said a key factor that investors need to take into account is that the risk premium in both public and private Chinese assets have gone up given geopolitical issues, as well as the country’s nominal growth which has “collapsed.”



China has been battered by a slew of disappointing economic figures, with the latest&nbsp;<a href="https://www.cnbc.com/2023/08/15/china-economy-july-industrial-output-fixed-asset-retail-data.html">economic data broadly missing expectations</a>.



“You really need the nominal side of the economy to pick up, and that will be only in areas where there is pricing power, or areas where you would see growth,” Kandhari said, citing examples in green technology and semiconductors.



But these will only be in small pockets, she reaffirmed. Additionally, capitulation in China has only happened at the sentiment level, but not at the flows level where it’s looking “like a screaming buy,” she surmised. Capitulation generally means a point at which investors sell their assets out of fear.



“So I think it will take a while for even any upside, and [for] some of the select pockets that [will] look encouraging to us.”

Morgan-Stanley-says-China-is-‘overinvested-but-Indias-the-opposite

Morgan Stanley says China is ‘overinvested,’ but India’s the opposite

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-820x547.jpg" alt="" class="wp-image-427181" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/W7VMKOE6Q5NC3A5N4BRNISXQGM-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: International Monetary Fund (IMF) First Deputy Managing Director Gita Gopinath participates in a panel titled “How Should Central Banks Battle High Inflation?” at the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington, U.S., April 14, 2023. REUTERS/Elizabeth Frantz</figcaption></figure>



CAPE TOWN, Sept 1 (Reuters) &#8211; Indebted nations that have faced lengthy negotiations with creditors need to have access to faster sovereign debt restructuring mechanisms, the International Monetary Fund&#8217;s First Deputy Managing Director Gita Gopinath said on Friday.



Gopinath told a conference in Cape Town, South Africa, that she was more hopeful about debt restructuring after Zambia reached a deal with its official creditors, but added that more needed to be done.



&#8220;I &#8230; felt hopeless about this until two to three months ago,&#8221; she told the event, organised by the South African Reserve Bank (SARB). &#8220;But after Zambia&#8217;s debt restructuring &#8230; I&#8217;m feeling more hopeful that there is actually a way we can have more faster and timely debt restructurings done.&#8221;



She said she was completely in agreement that the world&#8217;s financial architecture needed to change and that China&#8217;s slowing economic growth had implications for export earnings in South Africa. China is South Africa&#8217;s largest trading partner.



SARB Governor Lesetja Kganyago told the conference that inflation expectations in the country remained elevated.



&#8220;The most recent figure (of inflation) is 4.7(%) and there is all sorts of excitement (that) we have conquered this monster that is inflation and &#8230; my message is the job is not done,&#8221; Kganyago said.



Moves in the rand exchange rate, uncertainty surrounding oil prices and the impact of domestic power cuts on economic activity all remained inflationary risks, he said. 



(Reporting by Wendell Roelf and Kopano Gumbi; Writing by Bhargav Acharya; Editing by Alexander Winning and Mike Harrison)

2023 Spring Meetings of the World Bank Group and the International Monetary Fund

IMF’s Gopinath says faster debt restructuring tools needed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-820x547.jpg" alt="" class="wp-image-427112" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/5U7FLIWEYBKNHMM3XPNK67U22I-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Un trader à la Bourse de New York (NYSE). /Photo prise le 26 juillet 2023/REUTERS/Brendan McDermid</figcaption></figure>



LONDON, Aug 30 (Reuters) &#8211; Markets appear to have batted away next month&#8217;s Federal Reserve gathering as a paused &#8216;also ran&#8217; meeting in favor of second-guessing about a November rate hike &#8211; but next month may hold the key to finally unlocking the end of the tightening cycle.



Fed Chair Jerome Powell was almost brusque in his re-statement of the central bank&#8217;s anti-inflation commitment at the annual Jackson Hole symposium on Friday. Without a significant new policy twist, his doggedness about the job at hand finally seemed to hit home.



After an edgy few weeks of repricing &#8211; as the U.S. economy re-accelerated in July and forced a reassessment of the long-term sustainability of the new higher interest rate regime &#8211; traders seem to finally agree with what policymakers have been saying since June: there&#8217;s one more hike to come.



For the first time since the SVB bust and regional bank crisis in early March, futures markets moved briefly this week to show as much as a 60% chance on another policy rate rise to the 5.50-5.75% range by the November 1 Fed meeting.



While that&#8217;s an ever-moving feast &#8211; and the &#8216;data dependency&#8217; of the situation was illustrated by a quick recoil in that implied rate after Tuesday reports of ebbing consumer confidence and job vacancies &#8211; it shows markets far more in synch with Fed thinking on its peak &#8216;terminal rate&#8217;.



For all but six weeks of the entire year to date, the so-called &#8216;median dot&#8217; &#8211; taken from the range of Fed policymakers yearend rate projections each quarter &#8211; has indicated an end-2023 rate in excess of where Fed futures rates put them.



<h2 class="wp-block-heading" id="h-don-t-fight">DON&#8217;T FIGHT&#8230;</h2>



That thinking was of course bamboozled by the March banking upheaval &#8211; which suggested to many at the time that the lagged effects a year of Fed rate rises on credit were already hitting hard via bank stress. But even if credit creation has indeed slowed sharply, falling inflation, persistently tight labor markets and rising real wages have buoyed demand nonetheless.



So much so that the Atlanta Fed&#8217;s real time GDPNow estimate of real, inflation-adjusted U.S. economic growth in the current quarter had accelerated to some 5.9% as of last week &#8211; its highest since January last year and some 9% in nominal terms despite more than 500 basis points of Fed tightening in the interim.



Impressively, Fed officials never reduced the median year-end projection during all the market doubts of the spring &#8211; having only raised it half a point to 5.6% as the crisis unfolded in March. Tracking that rather than more-skittish policy rate futures would have proved a better guide to how subsequent months panned out and to the summer doldrums in bonds and stocks.



But because investors assume the Fed will want to see another couple of months of incoming economic reports before making a decision on whether it&#8217;s done already or not, futures now assume any additional move will come on November 1 and not the September 20 meeting &#8211; which appears to be sidelined in thinking as a &#8216;dead rubber&#8217; where the Fed will pause to lap up more data.



And yet the September meeting could still be the &#8216;big reveal&#8217; as it sees publication of the Fed&#8217;s updated &#8216;dot plot&#8217; that will likely show just where they then see the cycle crest.



Given the Fed&#8217;s own accuracy so far this year in parsing the pathway and its faith in the economic resilience through the spring, that forecast will pack a punch.



Standing pat confirms the coagulating picture &#8211; another hike in the median dot could pre-empt two more to close the year that hoves a 6% rate into view all of a sudden.



And given all this month&#8217;s bond market angst about &#8216;higher-for-longer&#8217; rates, the Fed&#8217;s existing median assumption of a 130bp drop in policy rate to 4.3% through 2024 may also be revised sharply to show a shallower decline &#8211; if any at all.



<h2 class="wp-block-heading" id="h-accident-or-design">ACCIDENT OR DESIGN?</h2>



So has a seer-like Fed now got the market eating from its hand at last? Or is it just good at guessing itself and basically lucky on the real economy?



San Francisco Fed researchers Andrew Foerster and Zinnia Martinez last week made the case that disagreement among Fed policymakers &#8211; which had been falling after 2010 and was negligible during the pandemic &#8211; is on the rise again as views on the underlying strength of the economy and stickiness of inflation widen.



Developing an &#8216;index of disagreement&#8217; based on the dispersion of &#8216;dot plot&#8217; rate forecasts in the Fed&#8217;s quarterly updates, they show a wider array of views beyond the current year take &#8211; but clearly on the rise on one- and two-year horizons.



So less crystal-clear clarity and certainty that it appears.



As to whether the Fed is guiding everyone to safe and happy place, there continues to be sceptics about the &#8216;soft landing&#8217;.



&#8220;Business cycles are dynamic and avoiding recession this year does not, by itself, increase confidence that a long expansion is in the offing,&#8221; JPMorgan economists Bruce Kasman and Joseph Lupton told clients in a deep dive this week.



The JPM economists said there have been no historical precedents for sustained economic expansion following large and synchronised tightening across developed economies &#8211; although there have been three episodes since 1960 in which U.S. growth has been sustained for three or more years after a singular Fed hiking campaign of at least 2.5 percentage points.



For the U.S. to ape those past successes, they conclude, business hiring has to continue to hold in the face of slowing profits, the Fed has to be prepared to ease within six months of the last hike &#8211; which now seems unlikely &#8211; and a new supply-side growth impulse is likely needed as a tailwind.



No victory laps just yet, then.



The opinions expressed here are those of the author, a columnist for Reuters.

Un trader à la Bourse de New York

September sees Fed dot plot thicken

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1-820x462.jpg" alt="" class="wp-image-426967" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107290995-1692818566260-isro-1694376945340080398-img1.jpg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The shadow of the Chandrayaan-3 spacecraft is seen on the moon’s surface. ISRO</figcaption></figure>



The list is grim reading: Stuck, failed, missed, failed, failed, stuck, failed, crashed, missed, crashed, crashed.



Those were the fate of the Soviet Union’s first 11 attempts before successfully landing a spacecraft on the moon, according to a database compiled by Jonathan McDowell, an astrophysicist at the Harvard-Smithsonian Center for Astrophysics who catalogs space missions.



Even in the modern era — with nine lunar landing attempts since 2013 — the track record is still shaky. Before India’s success Wednesday, missions by China, India, Israel, Japan and Russia were three for eight in the past decade.



McDowell’s database showcases the monumental challenge undertaken by the 50 attempts to land on the moon, with a cheeky scoreboard that reads: Earthlings 23, Gravity 27.



India chocked up its first W against Gravity on Wednesday, after the country’s Chandrayaan-3 spacecraft safely landed on the lunar surface. The feat makes India the fourth country to successfully land on the moon, and the first to touch down near the lunar south pole.



“They should feel very proud of this accomplishment,” Jim Bridenstine, who led NASA as administrator from 2018 to 2021, told CNBC.



Perhaps the most remarkable aspect of India’s moon landing is the shoestring budget — by government standards — with which the country achieved the mission. In 2020, the Indian Space Research Organization (ISRO) estimated the Chandrayaan-3 mission would cost about $75 million. The launch was delayed two years, which likely increased the overall mission’s cost. ISRO has not responded to CNBC’s request for an updated cost figure.



But that rivals the lowest-cost lunar lander missions in development in the U.S. NASA in recent years turned to having companies compete for fixed-price contracts to build moon landers, under a program it calls Commercial Lunar Payload Services. The CLPS program has a maximum budget of $2.6 billion over 10 years, with 14 companies vying for mission contracts typically worth upwards of $70 million each.



Overall, NASA’s annual budget dwarfs that of its Indian counterpart. In 2023, the U.S. agency received $25.4 billion in funding, compared to the ISRO’s budget of about $1.6 billion. Bridenstine stressed that NASA’s much larger budget is a reflection of the “different level of capability” that the U.S. agency offers, with everything from a continuous astronaut presence in orbit to missions targeting planets, asteroids and more.



As a percentage of gross domestic product, the U.S. spends the most on space — although it still amounts to just 0.28% of GDP.&nbsp; That ranks well ahead of India’s 0.04% of GDP, according to a July report on the global space economy by the Space Foundation.



“India should have in its ambitions the desire to invest more and more and develop the capabilities that are more on par with the United States,” Bridenstine said.



India is increasingly seen as a top player in space geopolitically. While China has succeeded Russia as the most significant rival to U.S. influence and capabilities in space, India may yet take that third spot in the space superpower hierarchy.



“I would hope that they use [Chandrayaan-3] as an opportunity to capitalize on the success,” Bridenstine said. “They’ve got a big economy and they’re going to be able to put money into space exploration.”



“Costs are going to continue to go down, which is a very positive development for everybody who’s interested in space exploration,” he added. “And costs to get to the moon are going to go down, especially as we have more and more companies doing more and more missions.”

107290995-1692818566260-isro-1694376945340080398-img1

India’s moon landing made history at a low cost

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-820x547.jpeg" alt="" class="wp-image-426914" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A labourer sorting out onions at a vegetable market in New Delhi on May 30, 2023. (Photo by Arun SANKAR / AFP) (Photo by ARUN SANKAR/AFP via Getty Images) Arun Sankar | Afp | Getty Images</figcaption></figure>



With India slapping a 40% export tax on onions on the back of higher domestic prices of the vegetable, analysts are considering the global impact, especially on major importers.



The new levy announced Saturday acts to ensure domestic availability and cool inflation, and is effective immediately until December 31, according to the country’s Ministry of Finance.



Retail prices of onions in India have risen around 20% year-on-year, averaging at around 30.72 Indian rupees (37 cents) per kilogram on Aug. 19, compared to 20.44 rupees in the same period last year, data from India’s Department of Consumer Affairs shows.



<h2 class="wp-block-heading" id="h-export-taxes">Export taxes</h2>



“High rainfall in the month of July 2023 in key producing regions of Maharashtra and Karnataka led to damage to the stored onion crops,” said Pushan Sharma, director of research at CRISIL Market Intelligence and Analytics, an Indian research firm which is a subsidiary of S&amp;P Global.



According to the Indian Meteorological Department, several parts of India were battered by rainfall during July.



Meanwhile, India’s inflation numbers for July hit a 15-month high of 7.44% compared to a year ago, largely attributed to the spike in domestic food costs. In April, prices of onions had dropped 32.2% year-on-year on the back of oversupply as a result of early crop maturation, according to a Mintec report published April.



But now the South Asian nation is currently wrestling with high vegetable, fruit and grain prices. Prices of tomatoes in India previously surged more than 300% due to adverse weather. India’s government in July also banned the exports of non-basmati white rice in a bid to ensure sufficient domestic supplies.



“The government would like to rein [in] prices and ensure sufficient availability in the domestic market. The late onset of monsoon has also affected the current onion crop,” said Samarendu Mohanty, Asian regional director of agricultural firm International Potato Center (CIP).



Bangladesh, Malaysia, Sri Lanka and parts of the Middle East rely on India for onion and the taxes will raise the prices of onions for these countries, he told CNBC.



India is the world’s largest exporter of onions, and contributes over 12% of global onion trade, data provided by CRISIL showed.



“Global onion prices are likely to get a positive price cue on account of India’s decision,” Sharma said.



However, he noted that the price hike is expected to be short lived, until October, where more onion crops are expected to come into the market.



Onions are an integral staple in India, and used in traditional South Asian dishes such as biryani. Alongside tomatoes and potatoes, the three vegetables form a part of the nation’s CPI basket. In 2019, India banned the exports of onions after a reduced harvest due to excessive rainfall.

107289246-1692614151535-gettyimages-1258280832-AFP_33GJ7AG

Global onion prices could be set to rise with India slapping an export tax on domestic production

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View-820x462.jpeg" alt="" class="wp-image-426877" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A night view of the Central Business District in Beijing, China, Nov 10, 2021. Future Publishing | Future Publishing | Getty Images</figcaption></figure>



China’s central bank cut its one-year loan prime rate Monday, while leaving its five-year rate unchanged. These decisions are weaker than expectations for more muscular policy intervention following a raft of data that pointed to faltering growth momentum in the world’s second-largest economy.



The People’s Bank of China trimmed its one-year loan prime rate — the peg for most household and corporate loans in China — by 10 basis points from 3.55% to 3.45%, just shy of the 15 basis points that a majority of economists expected in a Reuters poll. This was the second time China has cut this rate in three months.



The PBOC left its five-year loan prime rate — the peg for most mortgages — unchanged at 4.2%, while economists expected a 15 basis point cut due to default risks from festering liquidity woes in the country’s property sector. Country Garden is on the verge of default, while Evergrande filed last week for bankruptcy protection in a Manhattan court.



“The underwhelming LPR announcement strengthens our view that the PBOC is unlikely to embrace the much larger rates cuts that would be required to revive credit demand,” Julian Evans-Pritchard, Capital Economics’ head of China, wrote in a note.



“Hopes for a stimulus-led turnaround in economic activity largely depend on the prospect of greater fiscal support,” he added.



On Monday, the Hang Seng Index sank by as much as nearly 1.8% to touch its lowest levels since late November, and the China Enterprises Index of the largest offshore listings in Hong Kong each sank by as much as 1.9%. The CSI 300 index of mainland-listed blue chips was by as much as 1%.



Monday’s actions follow surprise cuts to its short- and medium-term lending rates last Tuesday after a raft of economic data pointed to weak credit growth and emerging deflation risks, intensifying fears of a rapidly slowing economy. Missed payments on some shadow banking-linked trust products are further spooking investors.



The PBOC said Sunday that China will coordinate financial support to resolve local government debt risks and reduce systemic risks, while also looking to “adjust and optimize” credit policies for the property sector and lower financing costs for the economy.



Last week, the PBOC lowered the rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility loans&nbsp;to some financial institutions by 15 basis points to 2.50% from 2.65% previously. Overnight, seven-day, and one-month standing lending facility rates were each trimmed by 10 basis points to 2.65%, 2.8% and 3.15%, respectively.

107286480-1692078407337-gettyimages-1236477975-Beijing_CBD_Night_View

China’s central bank trims 1-year rate, but unexpectedly leaves 5-year rate unchanged

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371-820x462.jpeg" alt="" class="wp-image-426834" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107287880-1692248674321-gettyimages-1573491530-vcg111447162371.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. Federal Reserve Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting on July 26, 2023 in Washington, DC. Chen Mengtong | China News Service | Getty Images</figcaption></figure>



The Fed’s still worried Federal Reserve officials are still worried that inflation could rise again, which would necessitate more interest rate hikes, according to minutes from the July meeting. Officials were also concerned that the decline of value in commercial real estate could affect banks and other financial institutions, sending ripples throughout the economy.



Losing streak U.S. markets fell for a second straight day and Treasury yields rose as traders digested hawkish minutes from the Federal Reserve. Asia-Pacific markets followed Wall Street lower Thursday. Australia’s S&amp;P/ASX 200 lost 0.53% as data showed the country’s seasonally adjusted unemployment rate climbing to 3.7% in July, higher than economists expected.



China’s 5% target China’s Premier Li Qiang said the country will work to achieve its economic growth target of around 5%, according to an official readout. At a meeting of China’s State Council, Li called for boosting domestic demand and consumption. Such stimulus will be welcome — analysts are thinking it’s increasingly likely China will miss its target this year.



Export troubles in Japan China’s sluggish economy is affecting the rest of Asia. Japan’s exports in July fell 0.3% year on year, their first monthly decline since February 2021. Weaker demand from China caused exports to the country to plunge 13.4%, the eighth consecutive monthly decline. Meanwhile, Japan’s imports slumped 13.5% as domestic demand faltered as well.



[PRO] European companies at risk Indeed, the weakness in China isn’t contained to the region. European companies with close ties to the world’s second-largest economy face risks too. CNBC Pro analyzed sales data and came up with a list of companies that rely significantly on China for their venue.



<h2 class="wp-block-heading" id="h-the-bottom-line"><a></a>The bottom line</h2>



The fight against inflation isn’t over. And there’s a risk interest rates have to go higher. That’s the key takeaway from minutes of the Fed’s July meeting.



Here are the exact words from the meeting summary: “With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy.”



That wasn’t something markets wanted to hear. Investors think there’s a 60% chance rates will be at current levels at the end of the year, according to the CME FedWatch Tool. But they might have to revise their bets soon, especially since U.S. economic data is coming in hotter than expected.



“Recent third-quarter&nbsp;GDP estimates, coupled with fresh retail sales data, suggest a much more robust underpinning to the economy, certainly not what the Fed wants to see as they navigate the so-called ‘last mile’ towards achieving price stability,” said Quincy Krosby, chief global strategist for LPL Financial.



Longer-term U.S. Treasury yields — which are typically more sensitive to interest rate changes — rose in response to the minutes. The 10-year yield traded around 5 basis points higher at 4.258%, its highest closing rate in more than 15 years. The 2-year yield added nearly 4 basis points to hit 4.967%.



It wasn’t a pretty picture in the stock market as well. All three major indexes fell for their second consecutive session. The S&amp;P 500 declined 0.76%, the Dow Jones Industrial Average dropped 0.52% and the Nasdaq Composite slumped 1.15%. Both the S&amp;P and Nasdaq closed below their 50-day moving average.



But there might be a silver lining to the sell-off. “Valuations are becoming less and less extreme,” said Sam Stovall, chief investment strategist at CFRA Research.



That’s a good opportunity for investors to jump in on Big Tech stocks such as Nvidia and Tesla — provided the expectation that earnings have bottomed in the second quarter proves true. But given the hawkish slant of the Fed minutes, it might be a steeper trough to climb out of than previously thought

107287880-1692248674321-gettyimages-1573491530-vcg111447162371

Inflation and interest rates might go higher, warns the Fed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="528" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-820x528.jpeg" alt="" class="wp-image-426778" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-820x528.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-300x193.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-140x90.jpeg 140w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-768x495.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-1536x990.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Argentine far-right libertarian economist and presidential candidate Javier Milei celebrates the results of the primary elections with his sister Karina Milei at his headquarters in Buenos Aires on August 13, 2023. Alejandro Pagni | Afp | Getty Images</figcaption></figure>



Argentina’s central bank devalued its currency, the peso, by close to 18% and hiked its benchmark interest rate by a whopping 21 percentage points to 118% on Monday following a shock primary election win by far-right libertarian Javier Milei.



The moves were a bid by the government to calm markets in the wake of the Argentinian congressman’s surprise victory, which gave him the largest share of votes in the country’s presidential primary election at roughly 30%, far exceeding forecasts.



Markets had been betting on favorable results for moderate candidates. Argentina’s presidential election will be held in October.



Argentinian stocks and its sovereign dollar bonds were also lower Monday.



The central bank said Monday that the peso would be held at 350 to the dollar until the October vote.



Milei, riding on a wave of popular discontent, has vowed to get rid of the central bank and dollarize Argentina’s economy. He has also advocated for sharp spending cuts.



Latin America’s third-largest economy, Argentina has been mired in economic and financial crisis for years. The country’s foreign reserves are shrinking fast and its inflation is forecast at 142.4% for the year.



Argentina is on the brink of its sixth recession in a decade. Milei is a vocal critic of what he calls the corrupt political class, saying the country’s leaders have thrown it from one crisis to another. He believes replacing the peso with the dollar could calm inflation, but many economists warn that would trigger financial chaos.

107286045-1692027857415-gettyimages-1597500503-AFP_33R28E4

Argentina devalues its currency, jacks up interest rates after shock far-right primary win

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="541" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-820x541.jpg" alt="" class="wp-image-426762" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-820x541.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-300x198.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-768x507.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-1536x1014.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/UGRX2TMRENMMNCHUROGN7GDO2M-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The U.S. Federal Reserve building is pictured in Washington, March 18, 2008. REUTERS/Jason Reed/File Photo</figcaption></figure>



WASHINGTON, Aug 14 (Reuters) &#8211; Pessimists watching the Federal Reserve battle inflation have focused on the so-called &#8220;last-mile&#8221; problem, convinced a full return to the U.S. central bank&#8217;s 2% inflation target will require a recession and significant job losses to cool ongoing price rises.



History is on their side, with academic studies and other research concluding the levels of inflation seen over the last two years can&#8217;t be fixed without a downturn, and prominent economists projecting a jump in the U.S. unemployment rate to between 5% and 10%from the current 3.5% &#8211; with millions out of work &#8211; might be the price that&#8217;s paid.



As a counterpoint, however, Brent Meyer, the Atlanta Fed&#8217;s assistant vice president and chief inflation watcher, suggests in a new analysis that the road to 2% inflation may in fact be smooth, rather than filled with the setbacks and difficult choices many Fed officials have said they expect.



It&#8217;s true that some of the main headline price measures have been sticky. The personal consumption expenditures price index stripped of food and energy was stuck in the comparatively high 4.6%-4.7% range for six months before finally falling in June to 4.1%, a fact some policymakers took as evidence the return to the Fed&#8217;s target would be slow.



But the annual headline numbers can mask developing trends, and Meyer said the just-released consumer price index report for July showed the breadth of inflation narrowing and its pace moderating in ways he felt could continue.



By his calculation, for example, a rising share of goods, currently about 18.3% of the CPI &#8220;basket,&#8221; is now in what he calls an inflation &#8220;sweet spot,&#8221; with prices increasing between 1% and 3%. Assuming that shelter cost inflation continues to fall, the share of goods where prices are rising more than 5%, presently about 38% of the basket, could be more than halved.



He added that inflation for services less energy and shelter costs, known as the &#8220;supercore&#8221; and an area of particular concern for the Fed, has by his calculation been increasing over the last three months at just a 2% annual rate. Since CPI inflation tends to be faster than the PCE measures that the Fed uses to set its inflation target, that means one important area of policymaker focus may have dipped below target already.



If that continues, &#8220;it&#8217;s possible that we could cover that last mile fairly quickly,&#8221; Meyer wrote.



<h2 class="wp-block-heading" id="h-rents-to-the-rescue">RENTS TO THE RESCUE?</h2>



Meyer is not alone among economists who see some positive inflation trends in the making.



The cost of shelter, for example, accounts for about a third of the CPI, and after playing a central role in driving inflation higher early in the coronavirus pandemic it is now expected to help moderate it.



The behavior of the single-family housing market has in some ways beat expectations. Home price indices are rising after only a brief period of decline despite a jump in mortgage rates fueled by the Fed&#8217;s interest rate hikes since March 2022. The average 30-year fixed mortgage rate rose to more than 7% last October and was just under that level in the latest week. But the pace of increase pales against the double-digit gains in 2021, and the inflation rate for rental housing has also slowed.



Because of how the inflation indices are assembled, it takes time for those changes to appear in the headline numbers. A recent study by San Francisco Fed economists, using real-time housing and rent data from companies like Zillow, projected &#8220;a sharp turnaround in shelter inflation&#8221; through late next year.



Compared with increases running as high as 8% annually, the pace of shelter inflation should fall below 5%, and possibly even turn negative, they estimated, &#8220;with important implications for the behavior of overall inflation.&#8221;



Two versions of the San Francisco estimates show shelter inflation hitting 0% next year, well below the 3%-to-4% range that Meyer said could help the Fed traverse its last inflation mile more quickly.



<h2 class="wp-block-heading">BACK TO NORMAL?</h2>



Other aspects of the economy may also be snapping into place, a possible late-arriving validation of the Fed&#8217;s initial expectation that rising inflation in 2021 would prove &#8220;transitory.&#8221;



Supply chain pressures have eased, and as that has happened changes in goods prices have also slowed and helped pull down the headline inflation number.



The road may not be fully clear. Data released on Friday showed the prices paid by producers in July rose more than expected, which may mean core PCE will go up again in July from the 4.1% reading in June. That would be a blow for the many Fed officials who want to see steady declines in the main inflation indicators before putting further rate increases on hold.



The recent producer price index report &#8220;offers the hawkish wing of the Fed more ammunition to advocate for another rate hike,&#8221; said Quincy Krosby, chief global strategist for LPL Financial.



But just as Fed officials were surprised by the rapid run-up of inflation beginning in 2021, they&#8217;ve been surprised at the economy&#8217;s resilience to the rapid run-up of interest rates they&#8217;ve engineered, and surprised at the progress they have made on inflation so far without clear damage to the job market or economic output.



Fed officials like Governor Christopher Waller have sketched out theoretical reasons for why that could continue, arguing that pandemic-era closures created so many extreme pressures in the economy that a simple return to normal &#8211; in the demand for workers, for example &#8211; could allow prices to cool without much harm to employment or economic growth.



Additionally, staff economists at the Richmond Fed last week said the central bank is in &#8220;uncharted&#8221; territory historically given the progress made in lowering inflation without any significant rise in unemployment.



Looking at past Fed interest rate cycles, they noted that since the 1980s the unemployment rate has been less volatile through each one &#8211; good news for officials hoping they can pull inflation back to target without a heavy price paid by workers.



Can it continue?



Meyer said it may be &#8220;overly optimistic&#8221; to expect a trouble-free return to the 2% target.



Still, &#8220;the underlying details&#8230; point to good news.&#8221;



(Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao)

FILE PHOTO: The U.S. Federal Reserve building is pictured in Washington

A smooth ‘last mile’ to 2% inflation may not be a stretch for Fed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture-820x462.jpeg" alt="" class="wp-image-426752" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/08/107285615-1691937285562-gettyimages-1251256675-China_Agriculture.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chinese villagers growing rice seedlings in a paddy field in Qiandongnan, Guizhou Province, China on April 2023. Future Publishing | Future Publishing | Getty Images</figcaption></figure>



Global rice markets could come under further strain as the world’s leading rice producer China grapples with heavy rain and flood risks.&nbsp;



“Heavy rain in China’s grain-producing north-eastern region that will reduce yields is likely to put upward pressure on already high global rice prices,” Fitch Ratings said in a recent report.



China is the world’s largest producer of rice, and flood alert levels were raised for three provinces that account for 23% of the country’s rice output: Inner Mongolia, Jilin and Heilongjiang, the report pointed out.



The world’s second largest economy has been inundated by devastating floods in recent weeks. Typhoon Doksuri was one of the worst storms to hit northern China in years, with capital Beijing battered by the heaviest rainfall in 140 years. 



Fitch pointed out that many key grain production areas in those three provinces were affected by heavy rains and remnants of Typhoon Doksuri, and they’re set to face “another deluge as Typhoon Khanun moves north.”



The resulting soaked grain fields will reduce crop yields for the year, the Fitch report stated, although the full extent of the damage is not yet clear.



“This will lift China’s domestic grain prices and likely drive higher imports in 2H23 to partially offset the potential yield loss,” the credit ratings firm said, adding the country may need to look to import more rice if its own harvests fall short, and that could drive global rice prices even higher.



Global rice prices have surged to their highest in close to 12 years, according to the Food and Agriculture Organization All Rice Price Index. 



Other market watchers are estimating higher rice prices ahead after India banned non-basmati white rice exports last month, and Thailand urged farmers to plant less rice in a bid to save water as a result of low rainfall.



India, which accounts for more than 40% of global rice trade, banned exports of non-basmati white rice on July 20, as the government looked to tackle soaring domestic food prices.



Rice prices are hovering at decade highs, with rough rice futures last trading at $15.98 per hundredweight (cwt).



In addition to rice, the Fitch report also cited corn and soybean among major crops grown in Inner Mongolia, Jilin and Heilongjiang, which will be impacted by flood risks. China is expected to import more of both grains this year compared to the last.

International

Chinese stocks lead foreign exodus from emerging markets in August -IIF

Bill Gates Says he is `Excited’ by AI in Health and Education

China’s central bank vows to support demand, price rebound

OPEC sticks to oil demand growth view citing resilient economy

China 2023 GDP growth forecast cut to 5.0%, 4.5% in 2024 -economists

G20 summit agrees on words but struggles on action

To counter China, Biden is backing the World Bank for a bigger role on the global stage

Morgan Stanley says China is ‘overinvested,’ but India’s the opposite

IMF’s Gopinath says faster debt restructuring tools needed

September sees Fed dot plot thicken

India’s moon landing made history at a low cost

Global onion prices could be set to rise with India slapping an export tax on domestic production

China’s central bank trims 1-year rate, but unexpectedly leaves 5-year rate unchanged

Inflation and interest rates might go higher, warns the Fed

Argentina devalues its currency, jacks up interest rates after shock far-right primary win

A smooth ‘last mile’ to 2% inflation may not be a stretch for Fed

Global rice prices could surge higher as flood risks loom over China

News Tips

Advertise With Us

International

Chinese stocks lead foreign exodus from emerging markets in August -IIF

Bill Gates Says he is `Excited’ by AI in Health and Education

China’s central bank vows to support demand, price rebound

OPEC sticks to oil demand growth view citing resilient economy

China 2023 GDP growth forecast cut to 5.0%, 4.5% in 2024 -economists

G20 summit agrees on words but struggles on action

To counter China, Biden is backing the World Bank for a bigger role on the global stage

Morgan Stanley says China is ‘overinvested,’ but India’s the opposite

IMF’s Gopinath says faster debt restructuring tools needed

September sees Fed dot plot thicken

India’s moon landing made history at a low cost

Global onion prices could be set to rise with India slapping an export tax on domestic production

China’s central bank trims 1-year rate, but unexpectedly leaves 5-year rate unchanged

Inflation and interest rates might go higher, warns the Fed

Argentina devalues its currency, jacks up interest rates after shock far-right primary win

A smooth ‘last mile’ to 2% inflation may not be a stretch for Fed

Global rice prices could surge higher as flood risks loom over China

News Tips

Advertise With Us

Newsletters