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The extensive sanctions imposed on Russia after its invasion of Ukraine one year ago have not led to the decimation of the Russian economy, as many experts had predicted. As recently as last fall, according to new polling data, many Russians actually believed they were better off economically than they had been before the war started.

According to data gathered by the Gallup organization, the share of Russians reporting they were satisfied with their standard of living increased by 15 percentage points, to 57% in 2022. For the first time in the poll’s history, satisfaction with living standards was above 50% in every region of the country.

The number of Russians reporting that their economic conditions were improving grew to 44% from 40%, while the number who said their economic prospects were declining plummeted to 29% from 50%.

Similarly, the percentage of Russians reporting that they were satisfied with the country’s leadership surged to 66%, up from 50% in 2021, while the share reporting that they were dissatisfied fell from just under half to only 21%.

The survey is part of Gallup’s expansive annual World Poll, which conducts large-scale polling in dozens of countries around the world every year. The poll of Russian citizens was taken between mid-August and early November of last year, and therefore cannot have captured any changes in attitudes since the fall. The survey involved in-person interviews with a random sample of 2,000 individuals ages 15 or older, living in Russia. The margin of sampling error is plus or minus 2.6 percentage points.

Surprising resilience

Recent data has demonstrated that the impact of international sanctions on Russia was not nearly as dramatic as the 10% contraction that many economists were foreseeing in 2022. The Russian economy contracted by a relatively mild 2.1% in 2022, and the International Monetary Fund has predicted that it will post small, but positive growth of 0.3% in 2023.

Russia began the war with a financial system braced for sanctions. The Russian central bank used currency controls and sharp interest rate hikes to stabilize the ruble early in the first year of the war. At the same time, Russian businesses began exploring deeper ties with countries such as China, India and Turkey, which allowed trade in goods and commodities to largely recover from initial dips at the outset of the conflict.

The biggest reason for Russia’s surprising resilience, however, was that it was allowed to continue selling petroleum products, far and away its largest source of pre-war revenue, on global markets. Prices were elevated at the outset of the fighting, and a slow move by many Western nations away from Russian oil and gas gave Russian firms time to broaden their sales to countries such as India and China.

In an address to the nation this week, Russian President Vladimir Putin touted the country’s economic performance.

“The Russian economy and system of governance proved to be much stronger than the West supposed,” he said. “Their calculation did not come to pass.”

‘Rally’ effect

Benedict Vigers, a consultant with Gallup, told VOA that the better-than-expected performance of the Russian economy may explain some of the economic optimism. However, a strong “rally-round-the-flag” effect is probably also in place.

When two countries go to war, there is a tendency for the people in both countries to demonstrate stronger affection for and satisfaction with their respective homelands, Vigers said.

“It is a well-known effect in Russia,” he said. “We have seen it historically, and it is happening now, in conjunction, to some degree, with Russia’s broader ability to evade some of the worst impacts of Western sanctions.”

He pointed out a similar spike in Russians reporting optimism about the economy and satisfaction with their government in the wake of the invasion of Ukraine’s Crimean Peninsula in 2014.

Repression of dissent

Another factor potentially coloring the responses to the Gallup survey is the fact that the Russian government aggressively punishes public criticism of the government, and has done so with more frequency in the months since launching its invasion of Ukraine. Tens of thousands of Russian citizens have been arrested for protesting against the war.

Galina Zapryanova, Gallup’s regional director for Eastern Europe and the former Soviet Union, told VOA in an email that the company cannot rule out the possibility that fear of reprisal affects peoples’ answers to poll questions.

“It is certainly possible that some people would not give a truly honest answer on questions related to approval of government policies, etc. — they may give the ‘safest’ answer that they consider most appropriate,” she wrote.

“This is a risk in all survey research in countries that are not entirely free, but we need to try our best to obtain representative data, while keeping in mind that a portion of any trend could be due to self-censorship by respondents.”

However, she noted that on the question of how Russians feel about the future of the economy, 56% opted for a response other than the seemingly “safe” option of declaring themselves optimistic.

Economic data suppressed

Another potentially complicating factor is that since the invasion in February 2022, the Kremlin has significantly closed off access to economic data that used to be public information.

“As far as mass media is concerned, economic information just recently fell victim to censorship,” Vasily Gatov, a senior fellow at the University of Southern California Center on Communication Leadership and Policy, told VOA. “Until spring last year, the Kremlin literally didn’t control narratives and the way people were writing about the economy in general.”

Gatov, who studies Russian media, said that since then, the government has blocked access to many reports on economic activity, making it more difficult for journalists and academics to get a full picture of what is happening with the Russian economy.

However, Gatov said, while it may be possible for the Kremlin to control access to some information, much of people’s perception about the economy comes from their own lived experiences.

“People receive economic information from various sources, and not always media sources,” he said. “One of them is their bank account. Another is prices at the gas station or grocery store.”

Without addressing the Gallup findings specifically, Gatov said that in his view, Russians “read between the lines” of information coming from the Kremlin and Kremlin-controlled media sources.

He said that they see major international brands refusing to do business in their country and are experiencing infrequent but serious shortages such as an ongoing lack of Western-produced drugs like insulin. “Russians are skeptical about the economic future of the country.”
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Moscow’s invasion of Ukraine a year ago has had profound impacts on how the world powers itself. VOA’s Steve Baragona explains.
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The United States is nominating former Mastercard CEO Ajay Banga to lead the World Bank, President Joe Biden announced on Thursday, crediting him with critical experience on global challenges including climate change.

The news comes days after Trump appointee David Malpass announced plans to step down in June from his role leading the 189-nation poverty reduction agency. His five-year term was due to expire in April 2024.

Addressing the impacts of climate change at the multilateral bank is a priority for the U.S. And leading climate figures have urged the Biden administration to use Malpass’ early departure as an opening to overhaul the powerful financial institution, which has been increasingly criticized as hostile to less-wealthy nations and efforts to address climate change.

Malpass ran into criticism last year for seeming, in comments at a conference, to cast doubt on the science that says the burning of fossil fuels causes global warming. He later apologized and said he had misspoken, noting that the bank routinely relies on climate science.

Banga, currently vice chairman at private equity firm General Atlantic, has more than 30 years of business experience, having served in various roles at Mastercard and the boards of the American Red Cross, Kraft Foods and Dow Inc. He is the first Indian-born nominee to the World Bank president role.

“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” Biden said in a statement, adding that Banga “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.”

Treasury Secretary Janet Yellen said in a statement that Banga’s experience “will help him achieve the World Bank’s objectives of eliminating extreme poverty and expanding shared prosperity while pursuing the changes needed to effectively evolve the institution,” which include meeting “ambitious goals for climate adaptation and emissions reduction.”

Biden’s climate envoy, John Kerry, said on Twitter that Banga was “the right choice.”

“He can help put in place new policies that help deploy the large sums of money necessary to reduce global emissions and help developing and vulnerable countries adapt, build resilience, and mitigate the impact of greenhouse gases,” Kerry tweeted.

The United States has traditionally picked the World Bank chief. The head of its sister agency, the International Monetary Fund, has traditionally come from Europe. But critics have called for an end to that arrangement and for developing countries to gain a bigger voice in the two organizations.

The World Bank has promised to conduct “an open, merit-based and transparent selection process″ and said it would accept nominations through March 29.

Eric LeCompte, executive director of the anti-poverty coalition Jubilee USA Network, said the United States was “looking to nominate people that will be supported by the developing world” and that it was “incredibly relevant” that Banga was born in India. “They want to be able to appoint people who have experience and roots with other economies,” LeCompte said.

“I can’t think of a more intense time for a person to be coming into this job,” said Clemence Landers, policy fellow at the Center for Global Development, a Washington think tank.

The bank is under pressure to expand its mandate — an effort that likely would require the next president to convince donor countries to provide more money.

Critics say the bank should be doing more to help poor countries finance projects to combat and prepare for climate change without saddling them with heavy debt burdens. And Landers said it needs to do a better job at tackling problems that cross borders such as providing pandemic surveillance and backing broad vaccination programs.
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Russia’s invasion of Ukraine a year ago saw a dramatic rise in the price of fertilizer for importers like Ghana, where farmers are struggling to cope.  Ghana’s economic problems have made imports even more expensive, forcing farmers to switch to different crops and ultimately, reduce production.  Kent Mensah reports from Akatsi, Ghana.

Camera: Nneka Chile
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Pakistan Prime Minister Shehbaz Sharif has asked his ministers and advisers to fly economy class, forgo luxury cars and their salaries as part of an austerity drive that will save the government $766 million a year.

The belt tightening comes as Islamabad — which is facing a balance of payment crisis — thrashes out a deal with the International Monetary Fund (IMF) to secure funds worth $1 billion which have been pending since late last year over policy issues.

Pakistan’s foreign exchange reserves have fallen below a three-week import cover and the expenditure cuts announced on Wednesday are part of an effort to stave off an economic meltdown.

“These austerity measures will save us 200 billion rupees annually,” Sharif told a news conference in Islamabad.

“These measures are need of the hour, and these savings no matter if that’s one penny is very significant,” he said, terming it a sacrifice for the poor who wouldn’t afford food on the table or medicines in the face of consistently high inflation, which touched 27.5% in January.

Sharif said all federal ministries and government offices have been directed to reduce expenditure by 15% and that he had asked his ministers and advisers to forgo salaries, allowances, luxury cars, foreign trips and business class travel.

The ministers agreed to the measures voluntarily, he said, adding all Cabinet members will surrender their salaries and perks, and they will pay all of their utility bills from their pockets.

Armed forces have given a positive response to cut non-combat expenditures, Sharif said without elaborating.

Other steps include a complete ban on the purchase of luxury items or vehicles for all government-run entities and no administrative unit like a new district or town will be created for two years.

All luxury vehicles will be withdrawn from the ministers, advisers and bureaucrats, who would travel abroad only if inevitable and that too in economy class.

The South Asian nation hopes to secure funds from the IMF soon, Sharif said, adding the stringent measures were part of the requirements the lender had asked Pakistan to fulfill before finalizing a deal.

Talks between Pakistan and the IMF are due to conclude this week, officials say.

Before the talks the IMF had asked Pakistan to take a host of prior actions, which included withdrawal of subsidies, hiking energy tariffs, raising extra revenues and arranging external financing.
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The disappearance of a star Chinese dealmaker has left his bank struggling to reassure clients and staff, people with knowledge of the matter said on Monday, and has heightened concerns about “key man risk” for investors.

Shares of China Renaissance Holdings 1911.HK fell by as much as 5% on Monday, following a record low in the previous session after the investment bank said it could not contact its founder, chairman and CEO Bao Fan.

The stock ended the day up 0.1% in the Hong Kong market that rose 0.8%.

Though the reasons for Bao’s disappearance are unclear, his case follows a series of incidents in which high-profile executives in China have gone missing with little explanation during a sweeping anti-corruption campaign spearheaded by President Xi Jinping.

Some of them reappeared as abruptly as they disappeared.

China Renaissance said on Thursday in a stock exchange filing that it had no information that Bao’s “unavailability” was related to its business, and that its operations were continuing normally.

China Renaissance co-founder Kevin Xie and its investment banking head, Wang Lixing, who are running the company in Bao’s absence, have asked staff not to believe or spread rumours, according to two sources and copies of their messages to staff seen by Reuters.

“At such a critical moment, everyone should trust the company. Don’t fret and stumble. It’s OK to encounter some difficulties in the short term,” Wang said in his message posted on the company’s Wechat group on Friday.

According to two sources and some media reports, authorities took Bao away earlier this month to assist in an investigation into a former colleague, Cong Lin, the company’s former president.

All the sources, who have knowledge of the matter, declined to be identified due to its sensitivity.

A spokesperson for Beijing-based China Renaissance declined to comment on specific details and referred Reuters to its exchange filing made on Thursday.

Xie and Wang did not immediately respond to Reuters’ requests for comment on Monday.

Beijing’s public security bureau also did not respond to request for comment. Asked during a daily news conference on Friday whether the banker had been detained, Foreign Ministry spokesperson Wang Wenbin said he was not aware of the situation.

The Hong Kong-listed stock, which climbed as much as 3.5% early on Monday, gave up all those gains and fell to as low as HK$6.82. It hit an all-time low of HK$5 on Friday but later recovered some ground to close at HK$7.18, down 28%.

‘Key man risk’

Bao, also China Renaissance’s controlling shareholder, started the firm in 2005 as a two-person team, seeking to match capital-hungry startups with venture capitalist and private equity investors.

It firm later expanded into services including underwriting, sales and trading.

Known to be well connected in the corporate world, Bao was involved with tech mergers including the tie-up of ride-hailing firms Didi and Kuaidi, food delivery giants Meituan 3690.HK and Dianping, and travel platforms Ctrip 9961.HK and Qunar.

“What happened to China Renaissance highlighted the key man risk with some Chinese companies,” Li Nan, professor of Finance at Shanghai Jiaotong University, said.

“A group of Chinese financial institutions rose quickly over the past few years on one to two controllers’ efforts, while it makes these companies particularly vulnerable to any negative headlines that show the controllers are in trouble.”

Key man risk generally refers to the threat posed to a company from over-reliance on a limited number of personnel for decision making.

While it is not uncommon in China for authorities to take away business executives for various reasons, Bao’s disappearance comes against the backdrop of more than two years of sweeping regulatory crackdown on technology companies.

“This should once again remind foreign investors of the relative level of regulatory and governance risk associated with Chinese equities,” said Propitious Research analyst Wium Malan, who publishes on Smartkarma platform. 
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Iran’s troubled currency broke below the psychologically key level of 500,000 rial per U.S. dollar on Monday, as market participants saw no end in sight to sanctions.

The Iranian rial plummeted to a new record low of 501,300 against the U.S. dollar, according to Bonbast.com which gathers live data from Iranian exchanges.

Facing an inflation rate of about 50%, Iranians seeking safe havens for their savings have been buying dollars, other hard currencies or gold, suggesting further headwinds for the rial.

The reimposition of U.S. sanctions in 2018 by former President Donald J. Trump have harmed Iran’s economy by limiting Tehran’s oil exports and access to foreign currency.

Since September, nuclear talks between Iran and world powers to curb Tehran’s nuclear program in exchange for the lifting of sanctions have stalled, worsening economic expectations for Iran’s future. Over the last six months, Iran’s currency has slumped nearly 60% in value, according to Bonbast.com.

Meanwhile, the central bank said it was opening a new foreign exchange center to ease access to foreign exchange and increase the volume of official transactions.

“The rate set in this exchange will become the market’s rate. It should be free from expectation factors that do not reflect our assessment of the country’s financial situation,” Mohammad Reza Farzin, the central bank governor, told state TV on Monday.

Farzin was appointed in December as governor with the key job of controlling the value of foreign currencies, according to IRNA.
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China’s job fairs are making a comeback after being forced online by COVID-19 for three years, but subdued wages and less abundant offerings in sectors exposed to weakening external demand point to an uneven and guarded economic recovery. 

Authorities announced hundreds of such events across the country this month, the latest sign that China is returning to its pre-COVID way of life and that youth unemployment, a major headache for Beijing, may ease from its near 20% peak. 

In a country of 1.4 billion people, job fairs are one of the most efficient ways for employers and workers to connect. Although attendees said their long-awaited return is encouraging, some were not brimming with confidence. 

“I only pray for a stable job, and do not have high salary expectations,” said Liu Liangliang, 24, who was looking for a job in a hotel or property management company at a fair in Beijing on Thursday, one of more than 40 held in the capital in February. “The COVID outbreak has hurt many people. There will be more job seekers battling for offers this year.” 

Employment anxiety is widespread. 

A survey of about 50,000 white-collar workers published on Thursday by Zhaopin, one of China’s biggest recruiting firms, showed 47.3% of respondents were worried they may lose their jobs this year, up from 39.8% a year ago. 

About 60% cited the “uncertain economic environment” as the main factor affecting their confidence, up from 48.4% in 2022. 

Job confidence of those working in consumer-facing sectors, which are recovering faster from a low base, was higher than in sectors such as manufacturing, affected by weakening external demand, or property, which has only just started to show tentative signs of stabilizing, the survey showed. 

A human resources manager at Beijing Xiahang Jianianhua Hotel, who only gave his surname Zhang, said his company had three times more job openings compared with last year, as Chinese resumed travelling. 

By contrast, Jin Chaofeng, whose company exports outdoor rattan furniture, said he has no plans to add to his payroll as orders from abroad are slowing. 

“People in my industry are waiting and seeing, prudently,” he said, adding that he plans to cut production by 20%-30% in March from a year earlier.  

Frederic Neumann, chief Asia economist at HSBC, expects the service and manufacturing sectors to run at vastly different speeds this year, but said overall employment in China should grow. 

“Restaurants, hotels, and entertainment venues are now scrambling to hire staff. This is especially helpful for younger workers,” Neumann said. “The youth unemployment rate should start to fall in the coming months.” 

China’s economy grew 3% last year, in one of its weakest performances in nearly half a century. Policymakers are expected to aim for growth of about 5%, which would still be below the blistering pre-pandemic pace. 

That’s partly because the pain caused by stringent COVID rules persists. 

At another job fair in the capital, Wei, a former cleaner looking for similar work, said she and her unemployed husband are struggling with credit card debt. 

Wei, who has a child in primary school and did not want to give her full name, citing personal privacy, quit her previous job last year after her employer wanted to cut her wages to 3,200 yuan ($465.34) a month from 3,500 yuan despite demanding she work late hours to conduct COVID-related disinfection. 

“We owe the banks hundreds of thousands yuan,” she said. “We are overwhelmingly anxious.” 
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Long before the pandemic shut down Hong Kong’s vibrant retail sector, traders from China crossed the border to purchase everything from cosmetics to cars tax-free for profitable reselling upon returning home, where buyers worried about the quality of locally available products.

The brisk parallel import trade, which included some Hong Kong residents taking goods into China, survived protests by Hong Kong residents who felt it caused shortages of in-demand items such as baby formula and increased prices.

COVID-19 travel restrictions shut down parallel trading more effectively than any law could.

But within days of cross-border travel resuming between China and Hong Kong on Feb. 6, the parallel import trade picked up. Also revived were calls from Hong Kong residents who want the so-called “ants trade” regulated if not shut down.

Near Exit C of the Sheung Shui Station of the Mass Transit Railway (MTR), more than 10 people presumed to be parallel importers gathered to distribute goods around 11 a.m. on Feb. 12, the first Sunday after the border reopened. The station is in the Sheung Shui District of the New Territories, an area of Hong Kong that is closest to Shenzhen, a city in China’s Guangdong province. The Sheung Shui Station is one stop from the immigration control point at Lo Wu.

The number of people with either empty or jammed luggage grew as Sunday wore on. VOA Cantonese observed buying and selling of red wine, daily necessities and food.

Hong Kong Police Commissioner Raymond Siu Chak-yee said during a February 11 press briefing that the Immigration Department and the Food and Environmental Hygiene Department had stepped up crackdowns on popular parallel trading spots by issuing tickets. He said the operation will continue as part of an effort to nip the problem in the bud.

Leung Kam Sing, a spokesperson for the North District Parallel Imports Concern Group, told VOA Cantonese that the parallel import activities resumed sooner than he expected.

“If you look at where we are standing now, some people are already distributing the goods, and there are already bagged goods,” he said, adding that parallel importing thrives in Hong Kong because people in China worry about the quality of pharmaceuticals and cosmetics there.

According to a report by the local newspaper Ming Pao, more than 10 people gathered during the peak period of the parallel import activities near Sheung Shui MTR Station on Feb. 9 and dispersed when police arrived.

Leung said that the “ants trade” before and after the pandemic created a garbage problem in the Sheung Shui area and increased crowds.

He added that some of the traders hold Hong Kong ID cards and called on the governments of China and Hong Kong to cooperate in combating parallel trading activities. “I have repeatedly reiterated that it is not only Chinese mainland tourists but also Hong Kong people who engage in parallel imports,” Leung said. “We all hope that the government will really face up to this problem, for example, continuing to use the blacklist of (parallel importers) who pass through customs. For example, if some Hong Kong people engage in parallel imports, will the Shenzhen customs take some [actions]? If there are things that are out of reach for Hong Kong customs, will there be some actions by Shenzhen customs?”

According to statistics from the Hong Kong Immigration Department, about 2.43 million people from China entered and exited through border control points from Feb. 6-12, or more than the 2.4 million who visited in the entire pre-pandemic month of December 2019, according to the Hong Kong Immigration Department.

Leung, who launched many anti-parallel import activities before the pandemic, said that under the expansive, vaguely worded National Security Law, the group will not begin a campaign. But if parallel trading intensifies, he believes upset local residents might respond spontaneously.

He looked to political groups active in the community for years to “feel the reaction of the residents. I think even if my organization does not carry out (anti-parallel import operations), (the political groups) should all speak out for the residents.”
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America’s consumers rebounded last month from a weak holiday shopping season by boosting their spending at stores and restaurants at the fastest pace in nearly two years, underscoring the economy’s resilience in the face of higher prices and multiple interest rate hikes by the Federal Reserve.

The government said Wednesday that retail sales jumped 3% in January, after having sunk the previous two months. It was the largest one-month increase since March 2021.

Driving the gain was a jump in car sales, along with healthy spending at restaurants, electronics stores and furniture outlets. Some of the supply shortages that had slowed auto production have eased, and more cars are gradually moving onto dealer lots. The enlarged inventories have enabled dealers to meet more of the nation’s pent-up demand for vehicles.

Whether America’s shoppers can continue to spend briskly will help determine how the economy fares this year. The eight interest rate hikes the Fed has carried out in the past year have raised the costs of mortgages and auto loans as well as credit card interest rates. Inflation has also eroded workers’ paychecks, thereby limiting their ability to spend freely.

Yet for all the challenges, consumers continue to show resilience. Several factors likely helped propel last month’s spending. About 70 million recipients of Social Security and other government pension programs last month received an 8.7% boost in their benefit checks, an annual cost-of-living adjustment to offset inflation. It was the largest such increase in 40 years.

The job market also surged in January, with nearly a half-million new jobs added. The unemployment rate reached 3.4%, its lowest level since 1969. With many businesses still eager to hire and keep workers, average wages and salaries have risen about 5% from a year ago — among the fastest such rates of increase in decades.

Those raises have generally been eaten up by inflation. Still, consumer price increases have been slowing. And for many households, a sharp drop in gas prices since summer has freed up more money to spend.

As price increases have slowed, average wage gains have surpassed inflation in some months, lending some consumers additional spending power.

On Tuesday, the government reported that inflation eased again in January compared with a year earlier, the seventh straight such decline, to 6.4% from 6.5% in December. But on a month-to-month basis, price increases accelerated in January compared with November and December, evidence that high inflation won’t be defeated quickly or smoothly.
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The average price for a new vehicle in the United States soared above $49,000 in December, a record high.

With Americans increasingly price conscious at a time of high inflation and elevated interest rates, customer choice is a prominent theme at the 2023 Chicago Auto Show, the largest and longest-running auto show in North America.

A launchpad for manufacturers to showcase their latest offerings, previous auto shows have highlighted battery powered electric vehicles — commonly known as EVs and BEVs — that herald a carbon-free future for ground transportation.

While many EVs are also on display this year, manufacturers want customers to know they still have other options.

“We believe it shouldn’t be just one formula,” said Toyota regional manager Curt McAllister, noting that the company’s current product lineup, a mix of electric and gas-powered automobiles, reflects customer feedback. “Our customers are telling us they want choices. They just don’t want us to try to pigeonhole them into one subset.”

Which is why Toyota is profiling a fifth-generation Prius, a best-selling hybrid that uses both a battery and a gasoline-powered engine.

“We now have 21 hybrids across Toyota and Lexus,” said McAllister. “So it’s a big part of our carbon neutrality message.”

McAllister said Toyota isn’t ignoring the rapidly growing but more expensive battery powered electric vehicle market. “We know that BEVs are part of the future, but we want to make sure that we have something that not only makes sense but makes sense for their pocketbook.”

Though overall car sales down, EV sales up

Higher interest rates for car loans in 2022 slowed new vehicle purchases, marking the first drop in sales in a decade, even as carmakers worked to overcome supply chain problems such as shortages of microchips.

Even so, the number of EVs sold increased by about 65% from a year earlier, according to research firm Motor Intelligence. EVs made up nearly 6% of all new vehicles sold in the U.S. last year.

Despite recent price cuts for some electric vehicles that make them more competitive with gasoline-powered cars, many Americans remain reluctant to purchase battery powered electric vehicles.

One primary obstacle is what’s known as “range anxiety” — the concern about how far a vehicle can travel before having to recharge in a nation where gas stations still outnumber charging stations.

“Our customer base, some of them are not ready for EVs,” explained Chad Lyons, who is representing General Motors Chevrolet brand at the Chicago Auto Show. “So, actually our plan for the next five years is to offer EVs for those that are ready … but at the same time offer gas-powered vehicles for those that are not ready.”

Lyons said demand for gas-powered sedans has plummeted. As a result, his company’s lineup is focused on sport utility vehicles — commonly known as SUVs — including the redesigned gasoline-powered Trax compact SUV launching later this year, and priced similarly to Chevrolet’s sedans.

“People want vehicles that are higher up [higher riding] — that’s why you see so many SUVs right now being so popular,” he said.

‘The jelly bean proportion’

That preference is also reflected in Chevrolet’s electric vehicle lineup. Later this year, the brand will roll out two new SUV EVs, the Equinox and Blazer, and the choices don’t end there.

“Pickup trucks are the heart of America, and so we are going to offer the Silverado EV as well,” said Lyons.

“Everyone loves muscle cars,” said Dodge design manager Deyan Ninov, adding that customers want vehicles that look less electric and more classic. “I think if you look at all the electric cars out there right now, they all sort of look the same, they all have the same feeling and character they kind of have the same proportions — the jelly bean proportion.”

Ninov’s team has been working on an electric version of Dodge’s iconic Challenger, hoping to bring the “muscle car experience” to the battery-powered vehicle segment.

While manufacturers continue to emphasize choice, President Joe Biden has outlined a plan to ensure 50% of all vehicles on the road by 2030 are all electric. As a number of states consider mandates for electric vehicle adoption, California is leading the way, requiring all new vehicles sold in the state to be electric or hydrogen powered by 2035.
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U.S. inflation likely slowed again last month in the latest sign that consumer price increases are becoming less of a burden on America’s households. But Tuesday’s report from the government may also suggest that further progress in taming inflation could be slow and “bumpy,” as Federal Reserve Chair Jerome Powell has described it.

Consumer prices are expected to have risen 6.2% in January from 12 months earlier, down from a 6.5% year-over-year surge in December. It would amount to the seventh straight slowdown.

On a monthly basis, though, inflation is expected to have jumped 0.5% from December to January, according to a survey of economists by the data provider FactSet. That would be much faster than the 0.1% uptick from November to December.

So-called core prices, which exclude volatile food and energy costs to provide a clearer view of underlying inflation, are also expected to have slowed on a 12-month basis. They are forecast to have increased 5.5% in January from a year earlier, down from a 5.7% year-over-year rise in December.

But for January alone, economists estimate that core prices jumped 0.4% for a second straight month — roughly equivalent to a 5% annual pace, far above the Fed’s target of 2%.

“The process of getting inflation down has begun,” Powell said in remarks last week. But “this process is likely to take quite a bit of time. It’s not going to be, we don’t think, smooth, it’s probably going to be bumpy.”

Average gasoline prices, which had declined in five of the past six months through December, likely rose about 3.5% in January, according to an estimate from Nationwide. Food prices are also expected to have risen, though more slowly than the huge spikes of last summer and fall.

On a brighter note, clothing and airfare costs are thought to have barely budged from December to January. And economists have estimated that hotel room prices fell sharply.

Overall, the government’s inflation report will likely show the continuation of a pattern that has emerged in recent months: The costs of goods — ranging from furniture and clothing to toys and sporting goods — are falling. But the prices of services — restaurant meals, entertainment events, dental care and the like — are rising faster than they did before the pandemic struck and threaten to keep inflation elevated.

Goods have become less expensive because supply chain snarls that had inflated prices after the pandemic erupted in 2020 have unraveled. And Americans are shifting much of their spending toward services, after having splurged on items like furniture and exercise equipment during the pandemic.

Yet average wages are rising at a brisk pace of about 5% from a year ago. Those pay gains, spread across the economy, are likely inflating prices in labor-intensive services. Powell has often pointed to robust wage increases as a factor that’s driving up services prices and keeping inflation high even as other categories, like rent, are likely to decelerate in price.

The Biden White House last week calculated a measure of wages in service industries excluding housing — the sector of the economy that Powell and the Fed are most closely tracking. The administration’s Council of Economic Advisers concluded that wages in those industries for workers, excluding managers, soared 8% last January from a year earlier but have since slowed to about a 5% annual pace.

That suggests that services inflation could soon slow, especially if the trend continued. Still, wage gains of that level are still too high for the Fed’s liking. The central bank’s officials would prefer to see wage growth of about 3.5%, which they see as consistent with their 2% inflation target.

A key question for the economy this year is whether unemployment would have to rise significantly to achieve that slowdown in wage growth. Powell and other Fed officials have said that curbing high inflation would require some “pain” for workers. Higher unemployment typically reduces pressure on businesses to pay bigger wages and salaries.

Yet for now, the job market remains historically very strong. Earlier this month, the government reported that employers added 517,000 jobs in January — nearly twice December’s gain. The unemployment rate dropped to 3.4%, the lowest level since 1969. Job openings remain high.

Powell said last week that the jobs data was “certainly stronger than anyone I know expected,” and suggested that if such healthy readings were to continue, more rate hikes than are now expected could be necessary.

Other Fed officials, speaking last week, stressed their belief that more interest rate increases are on the way. The Fed foresees two more quarter-point rate hikes, at its March and May meetings. Those increases would raise its benchmark rate to a range of 5% to 5.25%, the highest level in 15 years.

The Fed lifted its key rate by a quarter-point when it last met on Feb. 1, after carrying out a half-point hike in December and four three-quarter-point increases before that.

The financial markets envision two more rate increases this year and don’t expect the Fed to reverse course and cut rates until sometime in 2024. For now, those expectations have ended a standoff between the Fed and Wall Street investors, who had previously been betting that the Fed would be forced to cut rates in 2023 as inflation fell faster than expected and the economy weakened. 
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Ford said Tuesday that it will cut 3,800 jobs in Europe over the next three years in an effort to streamline its operations as it contends with economic challenges and increasing competition on electric cars.

The automaker said 2,300 jobs will be eliminated in Germany, 1,300 in the United Kingdom and 200 elsewhere on the continent. It said its strategy to offer an all-electric fleet in Europe by 2035 has not changed and that production of its first European-built electric car is due to start later this year.

The Dearborn, Michigan-based company said it is looking for “a leaner, more competitive cost structure for Ford in Europe.” The automaker will embark on consultations “with the intent to achieve the reductions through voluntary separation programs.”

The job cuts come amid a sea change in the global auto industry from gas-guzzling combustion engines to electric vehicles. Governments are pushing to reduce the emissions that contribute to climate change, and a resulting race to develop electric vehicles has generated intense competition among automakers.

It’s even stirred tensions among Western allies as the U.S. rolls out big subsidies for clean technology like EVs that European governments fear could hurt homegrown industry.

Ford aims to cut 2,800 of the European jobs in engineering by 2025 as a result of the transition to electric cars that are less complex, though it plans to keep about 3,400 engineering jobs on the continent. The remaining 1,000 jobs will be cut on the administrative side.

“Paving the way to a sustainably profitable future for Ford in Europe requires broad-based actions and changes in the way we develop, build and sell Ford vehicles,” Martin Sander, general manager of Ford’s Model e unit in Europe, said in a statement. “This will impact the organizational structure, talent and skills we will need in the future.”

“These are difficult decisions, not taken lightly,” he added. “We recognize the uncertainty it creates for our team, and I assure them we will be offering them our full support in the months ahead.”

Ford also announced in August cuts of about 3,000 white-collar jobs in North America as it reduces costs to help make the long transition from internal combustion to battery-powered vehicles.

In a step in that direction, it said Thursday that it plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to make lower-cost batteries for new and existing EVs.

Company officials reported that its net income fell 90% in the last three months of 2022 from a year earlier. It said costs were too high and that it contended with a global shortage of computer chips and other parts used in its vehicles.

In Europe, Ford has some 34,000 employees at wholly owned facilities and consolidated joint ventures.
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Pakistan and the International Monetary Fund have held days of talks on reviving a stalled $6.5 billion bailout program but have failed to reach a deal to help prevent a looming default facing the South Asian nation.

The 10-day talks with the IMF delegation were “extensive” and “concluded successfully” before the visitors left the country early Friday, Finance Minister Ishaq Dar told a hurriedly convened news conference in the Pakistani capital, Islamabad.

Dar said his team will hold a virtual meeting with the IMF Monday after reviewing a draft memorandum on broadly agreed-to policies the IMF mission shared with his government.

An IMF statement described the talks with Pakistani officials as constructive and said “considerable progress” had been made.

However, it stressed “this mission will not result in a board discussion,” a meeting that would lead to the release of a $1.1 billion tranche critical to supporting the country’s crisis-hit $350 billion economy.

The tranche was initially expected to be disbursed in December as part of the $6.5 billion bailout package Pakistan signed with the IMF in 2019. The program is due to end in June.

The IMF must reach a staff-level agreement with Islamabad, which then requires approval by the agency’s Washington headquarters before the funds are released.

“Virtual discussions will continue in the coming days to finalize the implementation details of these policies,” the IMF said in its post-visit statement. It went on to stress the “timely and decisive” implementation of the policies was crucial for Pakistan to “successfully regain macroeconomic stability and advance its sustainable development.”

Economic experts see the IMF deal as key to preventing Pakistan from defaulting on external payment obligations and paving the way for other global lenders, including the World Bank and foreign governments, such as those of Saudi Arabia and China, to release funds.

Last year’s unprecedented summer flooding has fueled Pakistan’s economic troubles, stemming mainly from lingering political turmoil and security challenges in the wake of rising insurgent attacks.

Inflation has been raging at historic levels, the rupee has lost more than 35% against the U.S. dollar, and central bank foreign exchange reserves dipped to less than $3 billion this week — the lowest in a decade. The depleting dollar reserves have forced the government to place restrictions on imports, causing a severe industrial decline in Pakistan.

The IMF has been pushing the nuclear-armed country to broaden its low tax base, do away with tax exemptions for the export sector, and raise low gasoline, power, and natural gas prices.

The reforms would likely increase inflation to new record levels if Pakistan eventually secures the staff-level agreement with the IMF, according to experts.
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US President Joe Biden celebrated his economic record this week during the annual State of the Union address. While US unemployment statistics are on the upswing, economists say there are clear economic challenges. Keith Kocinski reports.
Camera: Keith Kocinski and Rendy Wicaksana
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CAIRO — Egypt is embroiled in cost-of-living and currency crises, in part, exacerbated by Russia’s full-scale invasion of Ukraine nearly one year ago — the fallout of which has led to severe disruptions in global food and energy security. Vulnerable Cairenes struggle to cope with their ever-diminishing purchasing power. (Captions by Elle Kurancid)

 
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Southwest Airlines executives and union officials are appearing before the U.S. Senate Commerce Committee Thursday to explain the cancellation of 16,700 flights last December in the middle of the holiday traveling season.

In a statement to the media ahead of his testimony, Southwest Airlines Chief Operating Officer Andrew Watterson took full responsibility for the failures that left more than 1 million passengers stranded in airports around the United States.

“We messed up. We own that,” he said, and pledged to take steps to ensure there will not be a repeat in the future.

Casey Murray, president of the Southwest Airlines Pilots Association (SWAPA), is also scheduled to testify at Thursday’s hearing. In a statement, he blamed the airline’s outdated scheduling technology and operational processes.

Murray said the airline ignored warnings about the system for years and said SWAPA predicted the holiday meltdown a month before it happened.

In a statement ahead of the hearing, Senator Maria Cantwell, chairwoman of the Senate Commerce Committee, said she was eager to hear the pilot’s testimony on how the debacle could have been avoided if the airline had acted sooner. She said the committee will be considering how to strengthen protections for consumers.

Some information for this report was provided by Reuters.
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