Page 22 - IBT Sept 2021 (1)

SNIPPETS

Euro zone inflation at

an all time high

Euro zone inflation surged to a 10-year-high in August with further
rises likely, challenging the European Central Bank's benign view on
price growth and its commitment to look past what it deems a
temporary increase. Consumer inflation in the 19 countries sharing
the single currency accelerated to 3% this month from 2.2% in July,
far above expectations for 2.7% and moving well clear of the ECB's
2% target. The increase was fuelled by energy costs, but food prices
also surged, while there were unusually large increases in the prices
of industrial goods too, according to Eurostat, the EU's statistics
agency, states the report in Dhaka Tribune. Markets mostly
shrugged off the data, with stocks rising and yields increasing just
a basis point or two, suggesting the narrative of temporary inflation
and ultra-easy central bank policy for years to come remains the
central one.

IFC pledges $3.8b to
assist South Asia in

pandemic recovery

Factory activity
affected by rising

costs in Asia
Asia's factories hit a rough patch in July as rising
input costs and a new wave of coronavirus
infections overshadowed solid global demand,
highlighting the fragile nature of the region's
recovery. Manufacturing activity rose in export
The International Finance Corporation has renewed focus on powerhouses Japan and South Korea, though firms
sustained investments in South Asia in a bid to protect the most suffered from supply chain disruptions and raw
vulnerable people and help companies maintain operations and jobs, material shortages that pushed up costs, reports
says the global agency, mentions The Financial Express. The IFC’s Reuters, mentions The Financial Express. China's
investments, it claims, continue to have a strong impact in the fiscal factory activity growth slipped sharply in July as
year 2021, while also spurring investments in renewable energy, demand contracted for the first time in over a year,
affordable housing, and distressed assets resolution. The IFC covers a private survey showed, broadly aligning with an
medical facilities, vaccines and supplies, and hard-hit micro, small, official survey released on Saturday showing a
and medium enterprises (MSMEs), according to a news release slowdown in activity.
issued on 17 August 2021. In the midst of a difficult year with Indonesia, Vietnam and Malaysia saw factory
massive and ongoing social and economic disruptions caused by activity shrink in July due to a resurgence in
COVID-19, the multilateral lending agency committed over $3.8 infections and stricter COVID-19 restrictions,
billion, including mobilisation and short-term finance, in South Asia according to private surveys. The surveys highlight
as of June 2021. This has resulted in a record investment volume of the divergence emerging across the global economy
over $14.9 billion in the last five years in the region, towards what on the pace of recovery from pandemic-induced
IFC described as a green, inclusive, and resilient recovery. In strains, which led the International Monetary Fund
Bangladesh, IFC made total commitments of $791 million, an to downgrade this year's growth forecast for
increase of almost 33 per cent from last year. emerging Asia.

20