Category: Economy

Zesco, the state-owned energy provider in Zambia, is getting ready to import electricity to combat an increasing supply shortfall that could hinder operations in the crucial mining sector. Zambia is the second-largest producer of copper in the world.

Zesco is getting ready to maintain economic stability and growth by directing the additional power imports towards vital industries like mining, agriculture, and manufacturing. The shortage is expected to reach an estimated 700 megawatts this year. Although the utility has not yet confirmed the precise amount of additional power that must be imported, the early announcement of this action indicates the urgency of closing the gap.

Zesco issued a warning to mining industries last week about possible variations in the power supply, citing reduced generation capacity. The production of copper in Zambia, the biggest copper producer in Africa, has drawn criticism. The nation’s mining association reports that the country’s copper output decreased to about 698,000 metric tonnes this year from 763,000 metric tonnes the year before.

This only serves to exacerbate worries on the global market that limited supply is making the production of refined copper, which is vital to the building and energy sectors, worse. Zambia is taking proactive steps to support its economic lifeline during these difficult times by attempting to import energy.

According to a recent report, strong demand helped India’s business activity soar in April, marking its fastest growth in almost 14 years. India is the largest economy, increasing at the highest rate of the year, according to the HSBC Flash India PMI, which also showed good employment growth and a decline in input inflation. The S&P Global and HSBC composite PMI increased to 62.2 in April, extending a trend of growth that began in August 2021.

Pranjul Bhandari, HSBC’s chief India economist, attributed the strong performance to increased new orders, leading to the highest composite output index since June 2010.

Services led the expansion, with the index hitting a three-month high at 61.7, driven by accelerated new business. The manufacturing PMI increased by 0.1% from the previous month, but it was still strong at 59.1.

The strongest composite sub-index since its inception in the poll in September 2014 was largely attributed to the continued strength of international demand. After a decline in March, strong sales improved the company’s expectations for the upcoming year. The increase in employment in services decreased in March, despite efforts to fulfill the increasing demand for jobs in manufacturing.

According to a report, Saudi Arabia intends to reshape its economic environment as part of its ambitious transition to become a worldwide tourism powerhouse. With the help of Crown Prince Mohammed bin Salman’s Vision 2030 plan, the kingdom hopes to become a popular tourism destination, lowering its dependency on oil earnings and drawing a wide range of visitors, including those interested in luxury and culture.

Significant investments are being used to build new attractions like Neom and the Red Sea Project, as well as to develop places like AlUla and heritage sites. In addition to these initiatives, social and economic reforms like loosened dress codes, more promotion of cultural and entertainment events, and simpler visa requirements will draw 70 million tourists by 2030.

However, the nation’s conservative image, complaints about human rights, worries about environmental sustainability, and rivalry from other regional tourism hotspots like the UAE present several obstacles.

Despite these challenges, Saudi Arabia has a lot to offer the traveller, including a rich cultural history, stunning scenery that is perfect for adventure travel, and the possibility of economic diversification away from oil.

These factors all contribute to the kingdom’s long-term economic diversification goals.

Mongolia sealed a groundbreaking climate finance pact to safeguard its grasslands. The agreement, named “Eternal Mongolia,” calls for a $71 million commitment from a coalition, supported over 15 years by Mongolia’s guarantee of $127 million. This deal is expected to be among Asia’s biggest climate finance projects and would extend Mongolia’s network of National Protected Areas and provide a template for international conservation initiatives.

With temperatures rising by 2.25 degrees Celsius in 80 years due to climate change, Mongolia is experiencing extreme environmental problems such as severe winters and droughts. “Eternal Mongolia” uses the Project Finance for Permanence (PFP) approach, combining financing and policy modifications into a unified contract with social and environmental goals.

The Nature Conservancy, working in partnership with Mongolia, anticipates that this agreement will support national conservation initiatives while safeguarding the distinctive steppe lifestyle of the nomadic herders. Mongolia’s grasslands confront numerous risks, even though they support a varied range of wildlife and store enormous amounts of carbon.

The idea suggests charging mining corporations that utilise Mongolia’s resources with biodiversity offsets to fund conservation. It also intends to increase national park fees to viable levels. With future projects planned in Africa, the Americas, and Canada, the Nature Conservancy hopes to spread this concept around the world.

The introduction of Zimbabwe Gold (ZiG), a new currency, intends to stabilise the country’s economy and reduce inflation. As far as the economy is concerned, Zimbabwe is navigating a challenging environment.

Before interacting with foreign financial institutions, the new currency must become fully functional. This explains the delay in concluding the staff-monitored programme with the IMF. However, numerous challenges endured, including the currency’s acceptance by unofficial marketplaces and the frequency of illicit commerce.

The remark made by Finance Minister Mthuli Ncube regarding the need to proceed slowly emphasises how crucial it is to guarantee the stability and effectiveness of economic policy. The government’s commitment to keep control over currency dynamics and stop illegal financial activity is reflected in the crackdown on black-market trading.

Furthermore, Zimbabwe’s commitment to pay off its external debt shows initiative in reestablishing contact with the global financial world. Seeking sponsors—especially from organisations such as the World Bank and African Development Bank—to reduce loan arrears demonstrates a will to work together and tackle persistent economic issues.

Despite certain obstacles, Zimbabwe seems to be making deliberate efforts to reconstruct its financial institutions and revive its economy.

On Saturday, the Central Bank of Turkey and its Brazilian counterpart announced the signing of an important memorandum of understanding (MoU) to strengthen cooperation between the two organisations. This development also featured the mutual agreement signed by the governors of national banks in Washington. This cooperative endeavour emphasises dedication to developing stronger relationships and participating in technical tasks related to central banking.

Additionally, the Central Bank of Turkey announced another important Memorandum of Understanding, this time with the Central Bank of Kazakhstan, indicating an extension of its cooperative endeavours. This agreement, which was also formalised in Washington, is a result of the collaborative efforts of Timur Suleimenov, the head of the National Bank of Kazakhstan, and Fatih Karahan, the governor of the Turkish Central Bank.

The same goal of strengthening collaboration and launching technical projects within the institutional framework of central banking is emphasised in both memos. Furthermore, these strategic alliances open the door for concerted efforts to advance financial stability on a regional and international level and address shared concerns along with sharing knowledge.

These agreements have the potential to improve economic resilience, encourage innovation, and assist sustainable development projects by promoting deeper collaboration.

On Friday, India’s Union Minister, Hardeep Singh Puri, engaged in discussions regarding oil market volatility with the Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC). Middle East tensions were the backdrop for the discussion. India depends substantially on oil imports; in the fiscal year 2022–2023, over 85% of India’s oil supply comes from OPEC countries, totaling almost $120 billion in petroleum products.

During a 30-minute phone call with Haitham Al-Ghais, Puri emphasised the need to find a balance between affordability, pragmatism, and market stability. Concerns for additional escalation have been heightened by the spike in crude prices, which broke through the $90 per barrel threshold as a result of growing tensions in Iran.

According to Moody’s Analytics, prices might rise to $100 per barrel if hostilities intensify and reach $95 per barrel. The third-largest oil importer in the world, India, is greatly impacted by these variations. Although prices have since eased, India’s susceptibility to the dynamics of the world oil market is still evident, particularly considering the country’s high reliance on imports for over 85% of its energy needs.

This emphasises how crucial proactive involvement and strategic thinking are to maintaining India’s energy security in a geopolitical environment that is becoming more unstable.

On Wednesday, UAE President Sheikh Mohamed bin Zayed Al Nahyan and Costa Rican President Rodrigo Chaves Robles signed the UAE-Costa Rica Comprehensive Economic Partnership Agreement (CEPA) in a virtual ceremony.

It is a significant step towards boosting cooperation, fostering private-sector collaboration, and opening up investment prospects, particularly in key sectors like logistics, energy, aviation, tourism, and infrastructure.

This agreement falls within the UAE’s broader foreign trade agenda, aiming to expand its global trade network, explore new export markets, and solidify its role as a facilitator of international trade. A major milestone in UAE-Costa Rican economic ties, Sheikh Mohamed bin Zayed Al Nahyan said, citing robust growth in non-oil trade to over US$65 million in 2023, emphasising the role trade plays in addressing global issues like climate change and food security.

He reiterated the UAE’s commitment to forging strategic partnerships with nations focused on progressive economic development.

President Chaves Robles expressed his excitement over the agreement, marking Costa Rica’s first pact of its kind with a Middle Eastern nation. He sees it as a strategic move towards expanding into new markets, anticipating that the partnership will unlock numerous trade and investment opportunities, ultimately benefiting both nations.

On Tuesday, the International Monetary Fund (IMF) upgraded its forecast for India’s GDP growth in the fiscal year 2024–25 to 6.8%, up from its earlier projection of 6.5%.

This upward revision is attributed to robust domestic demand and a growing working-age population. India’s central bank, the Reserve Bank of India (RBI), is also optimistic, estimating a 7% growth rate for the ongoing financial year, which began on April 1st.

Looking ahead, the IMF anticipates India’s GDP to expand by 6.5% in the subsequent financial year. Additionally, the IMF has revised its growth forecast for India for the fiscal year 2023–24, now projecting a growth rate of 7.8%, up from the previous estimate of 6.7% made in January. These projections outpace India’s official estimates, which had pegged growth at 7.6%.

Despite global economic challenges, the IMF notes that the global economy remains resilient, with steady growth and inflation returning to target levels. The organisation forecasts global real GDP growth at 3.2% for both 2024 and 2025, maintaining the same rate as in 2023.

These projections, which outpace China’s 4.6% growth forecast for the same period, highlight India’s continued position as the world’s fastest-growing economy.

Japan’s March exports rose by 7.3% year-on-year, marking the fourth consecutive monthly increase, primarily fueled by car shipments to the U.S.  Major companies’ business confidence did, however, decline as a result of worries about the yen’s depreciation and a slow pace of economic recovery.

Although real export volume decreased by 2.1% in March, it nevertheless exceeded economists’ predictions of 7.0% growth, casting doubt on the export sector’s viability as a major economic engine. Policymakers expect that strong export growth will counterbalance weak domestic demand and allow the Bank of Japan to move forward with normalising monetary policy.

Experts predict that exports will rebound in April, especially if US consumption remains strong. However, recent data also shows a drop in business confidence, which is linked to constraints on the cost of living and China’s uncertain economy.

The weakening of the yen to levels not seen since 1990 has increased import costs and adversely affected consumer spending.

Despite these obstacles, the BOJ is hesitant to tighten monetary policy, particularly in light of indications of weak demand in the economy. According to a poll, there is little sign of a volume rebound in industries like chemicals.