Business

AMMAN — Jordan Chamber of Commerce (JCC) President Nael Kabariti last week discussed with Anton Buttigieg, chief executive officer of Malta's commerce agency, ways to activate economic relations between the two countries at the private sector level. Kabariti praised the level of cooperation and coordination to organise the Jordanian-Maltese economic forum on April 11 during a scheduled official visit of Malta's prime minister to the Kingdom.

He suggested signing two agreements for cooperation and establishing a joint business council, which would play a role in enhancing cooperation and communication among the two countries' businesspeople.

For his part, Buttigieg said his country, which can be a gateway to European countries, has many opportunities to present to Jordan, stressing that the Maltese private sector seeks to discover cooperation opportunities with its Jordanian counterpart through exchanging commercial delegation visits. 

AMMAN — Real estate trading in the Kingdom increased by 6 per cent during the first two months of 2016 to JD1.1 billion, compared to JD985 million in the same period of 2015, the Department of Land and Survey (DLS) announced on Saturday.

The department’s revenues until the end of February this year reached JD53.1 million, 3 per cent higher than the JD51.5 million the DLS received in the same period of last year. DLS data showed that apartment exemptions in the first two months of 2016 went up by 20 per cent reaching JD13.4 million, compared to JD11.1 million in the same period of 2015. Iraqis came first in the number of purchases by non-Jordanians with 223 transactions, whose total value amounted to JD19.1 million; followed by Saudis with 109 real estates, JD6.7 million.

LONDON/ABU DHABI — Banks have cut credit lines for traders shipping food to war-torn Yemen, where ports have been battlegrounds and the financial system is grinding to a halt, choking vital supplies to an impoverished country that could face famine.

Lenders are increasingly unwilling to offer letters of credit, which guarantee that a buyer's payment to a seller will be received on time, for cargoes to a country plagued by a civil war between the government and Houthi militia as well as an Al Qaeda insurgency, say banking and trading sources.

"Western international banks no longer feel comfortable processing payments and are not willing to take the risk," said an international commodities trading source active in Yemen.

"What this means is traders are saddled with even more risks and have to effectively guarantee entire cargoes, usually millions of dollars, before the prospect of getting paid," added the source, who declined to be named, citing security concerns. "There are just more and more obstacles now to bringing goods into Yemen."

Traders that procure food for Yemen are mostly smaller, private firms based locally or regionally that buy the goods from international markets. Reuters spoke to several sources who declined to be identified, also citing security concerns.

The situation has worsened rapidly in the past month after Yemen's central bank stopped providing favourable exchange rates for local traders buying rice and sugar from global markets, say the sources, further hindering trading of food, which accounts for a large proportion of the country's imports.

The decision to limit such rates to wheat and medicine, deemed more nationally crucial, was a bid to preserve fast-dwindling foreign currency reserves.

The financing difficulties have been one of the factors behind falling shipments to Yemen, according to the sources. 

In January, around 77 ships berthed at ports in Yemen, according to UN data, down from around 100 ships in March last year, when the civil war escalated, and a far cry from the hundreds of ships that called every month in previous years.

The consequences could be grave for the Arab peninsula's poorest country, which the United Nations says is "on the brink of catastrophe". It relies on seaborne imports for almost all its food and 21 million out of 26 million people are in need of humanitarian support, with over half the population suffering from malnutrition.

Mohammed Al Shamery, an official at Yemen's sole sugar refinery, in the northern city of Hodaida on the Red Sea, said the credit and currency curbs had added to the problems of bringing cargoes into the country.

The process had already been complicated by deteriorating security as well as inspections of vessels by Arab coalition warships hunting for weapons bound for Houthi fighters.

"You have to be in constant touch with the shippers and reassure them that everything is fine and sometimes send pictures of the area so they know it's safe," Shamery added.

Prices rise

A European banking source said some banks had decided to completely withdraw from offering credit lines on food trades to Yemen. "Even if a bank is willing to process a payment, which relates to food, they have to be careful," the source elaborated.

Trading sources said banks that had been involved in Yemen's food trade have included Commerzbank, Deutsche Bank  and HSBC as well as regional Middle East banks.

Commerzbank and Deutsche Bank declined to comment. HSBC said it continued to support customers trading across the Middle East and North Africa region including Yemen "subject to relevant regulatory and commercial controls".

Yemeni banks are also feeling the pressure. 

Aidros Mohammed, an official with state-run National Bank of Yemen, said since the end of last year it had stopped opening letters of credit for the trade of goods in general "as outside banks have stopped dealing with us".

Watheq Ali Hamed, the manager of a store in Sanaa, said the decision by the central bank regarding rice and sugar purchases would be felt by ordinary Yemenis.

"Prices are already going up because of the war and the rise in the cost of securing the goods," he added. "The full effects of that decision will be felt going forward. Luckily, we still have some stocks."

Slowing of imports and rising prices could pose grave problems for Yemen, where areas are at risk of famine.

The country lacks sufficient seasonal rains, has limited access to farming areas and facing rising costs of agricultural supplies, a report by a UN food agency said in January.

Port flashpoints

Major ports have been flashpoints for fighting including the southern gateway of Aden, which has been gripped by violence since President Abed Rabbo Mansour Hadi's supporters seized it from Houthi forces in July. There have also been Saudi-led air strikes close to the port of Hodaida.

Adding to the turmoil, Al Qaeda in the Arabian Peninsula has been expanding its presence in Yemen; in February it took control of the southern town of Ahwar, months after seizing the major port city of Mukalla to the east.

Two banking sources in Yemen said restrictions on moving money abroad due to the conflict was adding to trade financing difficulties. 

"We have a big problem in transferring money abroad ... so we cannot open letters of credit for traders to import," one Yemeni banker said.

Trading and banking sources also said uncertainty over who was in control of Yemen's central bank, given its headquarters in Sanaa, was adding to lenders' caution. One Middle East banking source said some institutions were steering clear of transactions while Sanaa was still under Houthi control.

The central bank could not be reached for comment.

A February 11 report by Yemen's ministry of planning and international cooperation showed total foreign reserves of Yemen's central bank had slid to $2.1 billion by the end of 2015, from $4.7 billion at the same point in 2014.

The report said a "deterioration of the national currency value and scarcity of foreign exchange" were making it difficult to finance imports.

"In light of the ongoing conflict, the private sector has undergone painful shocks," Planning and International Cooperation Minister Mohammed Al Maitami wrote. "Hundreds of thousands of workers have lost their jobs and source of income."

PHILADELPHIA/KHOBAR, Saudi Arabia — A dramatic drop in oil prices is translating into a mixed bag for motorists across the globe, from hefty savings at the pump in the United States to a rare fuel price hike in Venezuela.

Oil prices have dropped nearly 70 per cent in the past 20 months, driven down by a glut in supply. All countries have access to the same oil prices on international markets, but retail gasoline prices vary wildly, largely because of the taxes and subsidies imposed on them.

That has meant the impact of diving oil prices has been uneven around the world.

In the United States, for example, drivers have enjoyed the fall as average gasoline prices tumbled to $1.64 a gallon ($0.43 a litre) last month from $3.37 a gallon ($0.89 a litre) two years ago. That has spurred a road renaissance of sorts as Americans hit the highways in greater numbers.

"It's great. It used to pain me to fill up my car, but now it's no big deal," said Patsy Gehring, a 59-year old who lives in Philadelphia. She says she notices the low pump prices every time she fills up her 2014 Honda Civic and is considering driving instead of flying on an upcoming trip to Florida.

"I'm probably going to end up driving. I'd prefer to fly, but gas prices are so cheap it just makes sense," she added.

The decline in prices at the pump has been more muted in countries like Indonesia, China and India, which have tried to reduce subsidies and absorb some of the gains from lower oil prices as taxes or levies, Barclays indicated in a research report.

Overall, retail fuel prices in Asia, which is home to three of the world's four largest energy importers, have fallen only about 35 per cent despite the almost 70 per cent decline in oil prices since July 2014, Barclays said.

‘No choice’

In China, the wholesale gasoline price ceiling, which is set by the country's central planning commission, has fallen 29 per cent since February 2014. But in January, regulators set a floor on price cuts, saying they would no longer adjust prices down when oil prices are below $40 a barrel. 

One benchmark oil price, Brent crude, was trading at around $36 a barrel lasy week.

Meanwhile, the Chinese government has also raised the consumption tax on fuel three times six since the slide in oil prices began. In Beijing, motorists appeared resigned to the limited benefit.

"When you look at oil prices, you can see the price at the pump should be a lot lower," said a 35-year-old man driving a black Audi A6, who gave his surname as Gao.

In Hong Kong, which has the world's most expensive gasoline at $6.69 per gallon ($1.76 per litre) according to www.globalpetrolprices.com, the slow downward march in prices has not impressed car owner Simon Lam. 

"It's been at this price range for so long and we have no choice but to accept that," he said.

A different story is being played out in two major oil producing countries, Saudi Arabia and Venezuela, where prices at the pump have actually risen due to cuts in subsidies, imposed to compensate for the economic hit from the oil price crash.

Venezuela in February increased pump rates for the first time in nearly 20 years. Its 95 octane gasoline rose more than 6,000 per cent from 0.097 bolivars to 6 bolivars per litre. (From 0.36 bolivars to 22.7 bolivars per gallon.) 

While that is $0.60 at the strongest official exchange rate, it is far less at the weakest official rate and just $0.006 on the black market, making it the cheapest fuel in the world at that rate.

The price is so low, especially in the face of raging inflation, that many Venezuelans support raising fuel rates even more.

"Gasoline is too cheap here. A litre of water is still more expensive than a litre of fuel. I have family abroad in Ecuador, and there it's very expensive, here it's nothing! They should have increased it a bit more," said taxi driver Raul Ramirez as he filled up his car at a Caracas gas station recently.

Similarly, Saudi Arabia, with its finances also hit hard by the oil slump, in December raised the price of 95 octane gasoline to 0.90 riyal ($0.24) per litre from 0.60 riyal. (From 2.27 to 3.40 riyal per gallon)

That still keeps Saudi Arabia among the countries with the cheapest gasoline prices in the world, so motorists are not complaining too much.

"It is still cheap, still reasonable — people can afford it," said a 40-year-old as he filled up at a gas station in Khobar near the state oil company's headquarters. "You don't usually tip the guy at the pump but in Saudi Arabia you do because petrol is so cheap.”

DOHA — Credit cards on the limit, huge bank borrowings and a struggle to repay loans: these are the personal debt problems of some Qataris despite the Gulf state's reputation for fabulous wealth.

Generous government salaries and free healthcare, funded by vast natural gas reserves in a country with only about 300,000 citizens, do not always translate into healthy bank balances for ordinary Qataris.

Instead, they can come under intense social pressure to live way beyond their means, spending lavishly on everything from the latest smart phones and designer fashions to family weddings. Now their problems are deepening as diving global energy prices mean even the Qatari welfare state is becoming less generous.

Many are borrowing enormous sums from local banks to finance lifestyles they cannot afford, according to a study by Qatar University.

"The idea of Qataris being a small, lucky, happy few — it's a myth," said Laurent Lambert, of the university's Social and Economic Survey Research Institute. 

"Many do not have the income to match the lifestyle and a small percentage are significantly poor by local standards and struggling to make ends meet," he indicated.

Widespread personal debt, while familiar throughout the Gulf where loosely-regulated banks and extravagant living are commonplace, does not yet appear to threaten Qatar's overall financial system.

Of the 75 per cent of Qatari families in debt, most owe more than 250,000 riyals ($68,700), according to a 2014 Qatar National Development Strategy report, only a handful default on their loan payments, an offence punishable by prison.

But recent layoffs of some state employees and petrol price increases, reforms hastened by the sinking energy market, have refocused attention on indebtedness and the problems it could present to social cohesion if citizens start to press their relatives and the government heavily for help.

‘Fever’

While Qatar has a total population of 2.4 million, most are foreign workers who have less access to the cheap loans available in a country where a conventional banking system operates alongside, but separately from, Islamic financial institutions.

Likened to a "social curse" by Qatari commentators and a "fever spreading from house to house", over-indebtedness among the much smaller local population is a raising national concern.

Radio talk shows air interviews with distressed civil servants who complain of becoming mired in debt after borrowing from banks without understanding the costs of repayment.

In Friday sermons, Muslim clerics rail against those who finance holidays to Europe and lavish wedding parties with loans that can devour salaries and lead to depression and divorce.

Part of the problem, some Qataris say, is that the country's economic boom during the era of high energy prices that lasted until mid-2014 rapidly pushed up standards of living — and expectations of what it means to be both wealthy and successful.

"You cannot have a bad watch on your wrist, a second-hand car, or an old telephone. You need to have the latest models so as not to appear 'poor'," said Mohammed Al Mari, a former traffic policeman who works in the charity sector.

"People end up pretending they have money just to keep up. There is this social pressure," he added.

Al Mari said that while he has managed to pay off debts and save money during his career years, he knew of a recent university graduate who was struggling. "He buys the latest iPhone because his peers have it but then, at the end of the month, he sells it back to pay his bills," he added.

Al Mari recalled how a Qatari woman had recently flown to neighbouring Dubai to purchase a counterfeit designer handbag.    

"Her friend had bought a bag that she wanted but couldn't afford," he said.

As well as a culture of extravagance and conspicuous consumption among some, others decry Qatar's "welfare syndrome" that has led a generation to believe it can live carelessly and be bailed out by relatives or a paternalistic government.

Spreading wealth

Part of a strategy by Gulf Arab governments to distribute some of their newly-discovered wealth, loans were extended to citizens in the 1960s and '70s and again in the early 2000s to help them buy shares in the state's multi-billion dollar energy enterprises.

Liberal lending by local banks, flush with funds from a fast-growing economy, was later extended to households wanting for instance to build a holiday home or buy a new car. These were handed loans, often several times their annual salary, with virtually no collateral.

"It was a free for all. Anyone could borrow basically as much they wanted," said Mohamed Al Kubaisa, a Qatari sociologist and newspaper columnist.

After concerns grew about the proliferation of loans and of Qataris unable to pay them back, the central bank imposed in 2011 a cap of two million riyals on consumer credit secured only against borrowers' salaries, with a maximum repayment period of six years.

Later that year, as Arab Spring protests spread across the region, the government raised state employees' salaries by 60 per cent and by 120 per cent for military personnel.

In a similar move neighbouring Saudi Arabia, which like Qatar escaped major Arab Spring unrest, boosted welfare spending sharply in an apparent attempt to secure social peace.

Also in 2011, the United Arab Emirates set up a fund to help cover low-income citizens' debts. Wielding oil-funded state largesse, Kuwait has occasionally paid off citizens' personal loans in response to popular pressure.

Qataris are divided over how to tackle the debt problem.

Those who see fault in the reckless spending habits of individuals advocate imposing upper limits on spending for marriage ceremonies and other social occasions, with penalties for those who violate.

Others say the government should more strictly regulate the banks, for which personal loans remain a lucrative business, and help launch more share offerings to encourage citizens to enjoy long-term benefits such as bonus issues and regular dividends.

Authorities have tried to raise awareness about the depth of the problem, launching a campaign titled "Debt is Disgraceful" in 2013 that saw donations collected to help pay money owed by debtors in prison or others threatened with criminal charges.

But some Qataris say that absolving people of their debts sets an unhealthy precedent.

"If you remove a person's debt, you also absolve them of their personal responsibility to repay the debt," said Mustafa Al Khamisi, who owns an audit firm. 

"That is really dangerous, because if you start eroding a person's responsibility towards society, you start eroding society itself," he added.

BRASILIA — Brazil's economy contracted sharply in 2015 as businesses slashed investment plans and laid off more than 1.5 million workers, official data showed on Thursday, setting the stage for what could be the country's deepest recession on record.

Gross domestic product (GDP) shrank 3.8 per cent last year, capped by another steep contraction in the fourth quarter, according to Brazilian statistics agency IBGE. It was the worst performance of any Group of 20 nation in 2015.

It was also Brazil's largest annual contraction since 1990, when the country was struggling with hyperinflation and a debt default. The outlook for 2016 is nearly as bad, with a central bank survey forecasting a 3.45 per cent contraction.

Back-to-back annual drops of that magnitude would amount to the longest and deepest downturn since Brazil began keeping records in 1901.

Brazil is "replicating the lost decade of the '80s in just two years", Goldman Sachs economist Alberto Ramos indicated in a research report. He added that the economy was close to an outright depression given that its contraction began nearly two years ago.

A paralysing political crisis, rising inflation and interest rates and a sharp drop in prices of key commodity exports have formed a toxic cocktail for Latin America's largest economy. The disastrous burst of a major mining dam and the biggest oil strike in 20 years added further strain in 2015.

Last year's contraction matched market expectations in a Reuters poll. Yields on interest rate futures rose after the data was published, also reflecting a split central bank decision to leave interest rates unchanged on Wednesday.

Stocks on the Sao Paulo exchange gained, as did the country's currency, the real.

Brazil's government said the poor data had been expected and added that it was focused on boosting the economy this year. 

"We want 2016 to be a year of recovery for jobs, employment, income, with economic growth," Labour Minister Miguel Rossetto said.

However, a private survey on Thursday showed services activity in February fell at the steepest pace on record, suggesting the economy had yet to hit bottom.

"We will probably see a similar contraction this year. There are no growth engines yet. The only one could be exports. But Brazil's economy is relatively closed, so we don't see that taking us out of this hole," said Joao Pedro Ribeiro, Latin America economist with Nomura Securities.

Costly stimulus

Brazil, once the world's seventh-biggest economy, has been underperforming since 2011, the year leftist President Dilma Rousseff took office. A sharp increase in government spending and subsidised credit underpinned the labour market until 2014, at the cost of fuelling inflation and eroding government finances.

The recession took root just as Rousseff started to roll back the costly stimulus policies, hiking taxes and interest rates and slashing investments in oil production. 

A corruption scandal at state-run oil producer Petroleo Brasileiro SA  and major construction firms also froze work at many infrastructure projects across the country.

Rousseff's popularity plummeted to record lows last year, fueling street protests and calls for her impeachment.

"Despite all the rhetoric from Rousseff last year about boosting private investment, it's abundantly clear that investors, both foreign and domestic, are staying away in their droves," said Michael Henderson, lead economist with consulting firm Verisk Maplecroft in England.

The downturn has been so severe that Brazil's economy will probably only regain its previous size by 2019, as it grapples with a much larger debt load, according to a Reuters poll.

DUBAI/DOHA — Low oil prices are forcing Gulf Arab states to borrow to prop up their economies and are now taking their toll on the region's banks too, complicating their efforts to raise capital required by regulators.

The impact of crude's fall from more than $100 to below $30 a barrel in less than 18 months has already been felt by oil and gas revenue dependent Middle Eastern countries which have had to borrow to prop up their economies.

And international investors have been avoiding the Gulf region's debt in recent months as a result, concerned about slower economic growth and substantial budget deficits.

This has had a knock-on effect on banks from Doha to Muscat, with the ensuing slump in stock prices and bond market volatility making it impossible for them to raise new capital so far this year, a situation which is unlikely to ease in the near future as they will have to compete with governments needing to borrow billions of dollars to pay their bills.

A dozen of the region's banks have announced capital raising plans as they try to meet local regulatory requirements, which in some cases are above the levels set by the Basel III banking accord, and top up reserves after years of lending growth.

These plans are now on ice and Gulf banks have to decide whether to attempt to borrow at a higher cost or hold out and risk falling short of more stringent regulatory requirements, which come into force over the next three years.

Another potential complication is that the flight of international buyers means banks will have to turn to local investors to buy their debt or equity. The problem here is that banks themselves are the largest regional debt investors.

Gulf banks reinforced their capital buffers in the wake of the global financial crisis so are not in any imminent danger, according to bankers and analysts.

However, they don't have the same funds to deploy as before as Gulf governments have withdrawn some of their deposits to bridge budget shortfalls, which as in Europe during the eurozone crisis, has exposed the interlinked relationship between governments and banks when bond markets fall.

The trend is perhaps most prevalent in Qatar, where half its commercial lenders have announced capital plans, including the largest conventional and Islamic banks, respectively Qatar National Bank and Qatar Islamic Bank.

"Market volatility has absolutely impacted plans for raising capital-boosting sukuk [Islamic bonds] but we are in a good position," QIB Chairman  Jassim Bin Hamad Al Thani told Reuters at the bank's annual general meeting.

QIB's total capital adequacy ratio (CAR), a key indicator of its health, stood at 14.1 per cent at the end of December, above Qatar's minimum requirement of 12.5 per cent, even though its total lending jumped 46.1 per cent in 2015.

Although Basel III's core equity minimum is 7 per cent, rising to 9.5 for the biggest global banks, most countries have set levels well above this, with Kuwait requiring 13 per cent.

But further increases are due which would eliminate the bank's room for manoeuvre. The 15.125 per cent minimum CAR set by Oman for 2019 would put most lenders there below or close to the limit at current capital levels.

Pricing Gulf

Gulf secondary bond markets have been particularly volatile since the start of the year, with the yields on perpetual bonds issued by banks to boost their capital widening significantly as prices have fallen.

This has forced high-net-worth individuals and private banks, traditionally major holders of perpetual bonds, to sell and will discourage them from buying back in, Ram Mohan Nataraja, portfolio manager at Invest AD, said.

"The usual latent demand will also be much lower, given the overall volatile market conditions," he added.

Although the relative illiquidity of these instruments accentuates such moves, they are generally considered riskier investments than regular bank bonds and this was apparent in some of their recent price movements.

Burgan Bank,, Kuwait's third-largest lender by assets, sold perpetual bonds in September 2014 with a 7.25 per cent coupon. These yielded 9.476 per cent on January 11, before spiking to 11.525 per cent on February 3.

Even National Bank of Kuwait, which boasts one of the highest credit ratings of any Gulf bank, saw trading on its 5.75 per cent bond issued in April 2015 jump from 5.92 per cent at the start of the year to 7.27 per cent on January 22.

These moves suggest that enticing investors to buy new capital-boosting bonds will require banks to pay higher, more attractive coupons, something that will grate with Gulf bond issuers who are traditionally regarded as extremely price-sensitive.

But limited options mean price is likely to trump pride.

Slumping stock markets, Dubai's bourse dropped 39 per cent between mid-July and mid-January, while Saudi Arabia's index is down 10.1 per cent year-to-date, means equity investors would be loathe to plough money into rights issues.

So-called contingent-capital bonds have never been sold in the Middle East, while convertible bonds are also a rarity.

And while retaining earnings would give bank reserves a minor lift, it would cut into shareholder dividend payments which are already in the sights of local regulators.

The United Arab Emirates central bank told its lenders to get approval before disclosing payouts for 2015, while Oman's regulator warned it could intervene on dividends to support capital ratios.

Banks seem poised to wait for better markets to place capital-boosting bonds and sukuk, according to bankers, although time is limited.

Saudi Arabia, Qatar and Oman are among the countries expected to issue bonds and the start of the holy month of Ramadan in June may mark the start of a three-month market shutdown for the Middle East's long summer break.

SYDNEY — Australia's economy strengthened last year supported by consumer and government spending, data showed Wednesday, with the better-than-expected figures raising hopes the resources-dependent nation is emerging out of a recent slump.

Economic growth expanded by 0.6 per cent in October to December to take the annual rate of expansion to a surprise 3 per cent, figures released by the Australian Bureau of Statistics showed.

The figures beat market expectations of fourth-quarter growth of 0.4 per cent for year-on-year growth of 2.5 per cent, and sent the Australian dollar jumping almost half a cent to 72.19 US cents.

"Today's December quarter national accounts show once again that Australia continues to successfully manage the transition from the largest resources investment boom in our history to broader-based growth," Treasurer Scott Morrison told reporters in Canberra.

"We are growing faster than every economy in the group of 7, growing well above the average of countries in the Organisation for Economic Cooperation and Development. We are growing faster than the United States and the United Kingdom, more than twice the pace of comparable resource-based economies like Canada," he said.

The healthy figures were further supported by an upwards revision of the September quarter growth rate from 0.9 per cent to 1.1 per cent, the strongest three-month reading since March 2012.

Household spending contributed 0.4 percentage points to the December quarter growth while public gross fixed capital formation, which includes construction and infrastructure spending, added 0.2 percentage points to gross domestic product (GDP), the data showed.

The gains were offset by a fall in business spending, which weakened the quarterly growth reading by 0.2 percentage points, as investment in the mining sector continued to soften.

Central bank on hold 

The Australian economy has slowed as the country exits an unprecedented mining investment boom that has helped it avoid a recession for 24 years, with the jobless rate hovering around a decade high and wage growth and business investment outside the resources sector both tepid.

The central Reserve Bank of Australia (RBA) has been trimming interest rates since November 2011, with the last cut in May 2015 taking it to a record-low of 2 per cent, as it sought to boost growth in non-mining sectors.

But the labour market showed signs of strengthening in late 2015, while consumers appeared to be more willing to open their wallets amid a booming residential housing sector.

The central bank kept the cash rate on hold on Tuesday, saying it was monitoring the improvement in the jobs market and that there were "reasonable prospects for continued growth in the economy, with inflation close to target".

The latest readings are better than the RBA's forecast of 2.5 per cent for the year to December 2015 and reinforces its stance to stay on the sidelines at this time, economists said.

"The latter half of last year looks a fair bit stronger than was realised at that time," JP Morgan senior economist Ben Jarman said.  "A lot of the most recent strength comes from consumer spending."

"With other things equal, this means that the RBA can have a bit more confidence in the domestic demand side of things. This helps their on-hold stance," he added.

While the headline figures were healthy, the income side of the economy remained weak, with nominal GDP, which is not adjusted for inflation, at 0.4 per cent for the quarter and 2.4 per cent year-on-year.

The terms of trade, a ratio that measures export prices to import prices, fell 3.2 per cent for the fourth quarter to decline 12 per cent on-year, amid weakening commodity prices.

"Income growth is soft. We've got a measure of living standards, and this is the fourth year of decline in that measure," Deutsche Bank economist Phil O'Donaghoe said.

"The cost of having strong employment in an economy like this is that income growth is so weak," he added.

Separately, Australia followed major world powers by lifting sanctions on Iran on Wednesday, after confirmation from the United Nations that Tehran had taken steps required to curb its disputed nuclear programme.

Under changes announced by the Australian government, businesses will no longer need to seek approval for transactions of more than A$20,000 ($14,436) involving entities from Iran.

While Australia has suspended some of the sanctions imposed on Iran autonomously in 2008 because of the Islamic republic's nuclear programme, some non-nuclear sanctions remain in place, the Department of Foreign Affairs and Trade said in a statement.

Sanctions still in force against Iran include restrictions on the transfer of proliferation sensitive goods, the arms and ballistic missiles embargoes and sanctions against some designated persons and entities.

Australia's anti-money laundering watchdog AUSTRAC expects reporting entities to scrutinise all payments that are routed via third-party countries to Iran or North Korea, which is also subject to sanctions due to its nuclear programme.

AUSTRAC says all transactions to those two countries should be considered as "high risk".

MOSCOW — "If you don't die by yourself, we'll help you," threaten the phone messages that Natalya, a 69-year-old Russian pensioner, has been receiving for months after falling further behind on her credit card payments.

Resorting to harassment and threats of violence, debt collectors sent out by banks to recover money have become notorious in Russia and, many complain, usually face no punishment.

But as Russia's unpaid debt soars to dramatic levels due to an economic crisis, authorities are now seeking to regulate the cowboy sector.

For Natalya, who declined to give her full name due to fear of reprisal, the problems began last summer.

She had to go into hospital and was forced to stop the part-time car park supervisor's job that supplements her monthly pension of around 150 euros ($164) plus the 70-euro disability benefit of her son, who lives with her.

It became impossible for Natalya, who lives in the region outside Moscow, to cover the monthly bills for her credit card which she says come to about 5,000 rubles (60 euros, $66), although she does not understand exactly what the amount represents.

Interest rates can reach as high as 20 per cent for longer term loans such as mortgages, and much higher for short term ones.

The menacing phone calls have become increasingly frequent, "day and night", she said.

Noting the telephone numbers used by the debt collectors, she has listed up to 18 calls per day.

The callers' tone has also grown more menacing, with threats of violence.

"We will come to your home to see if you have any gold teeth," or "we will confiscate your property", and "we will make you run for the cemetery" — just some of the threats she received.

"They got me into such a state that I didn't have the strength to leave my flat. I begged them but to no avail. They just kept on shouting and insulting me," she said, fighting back tears.

She finally went to a lawyers' association to attempt to get her repayments cut to a manageable level.

Mounting unpaid loans

Natalya's case is far from unusual, as are the tactics used against her. 

Russian media has carried reports of bailiffs beating up people with debts, posting insults in the entrance halls of their apartment blocks and threatening to attack their children.

"Over the last year, we have seen a wave of complaints," said Irina Malinina, a lawyer who heads a group helping people with unpaid loans.

"Delays or failures to make payments have increased so visits and phone calls from debt collectors have gone up," she added.

Collapsing oil prices and sanctions on Russia due to the conflict in Ukraine have plunged the country into recession, prompting a drop in spending power that caught out many Russians who had taken loans during the boom years when credit was available with almost no background cheques.

Payments were late on nearly 18 per cent of personal loans on January 1, up from 10.3 per cent a year earlier, according to the National Bureau of Credit Histories, a company that holds a large database of credit history records.

Exacerbating the situation, banks have sought to unload their bad loans by selling them to debt collector agencies.

Banks have also tightened the criteria for granting loans, pushing Russians towards small microcredit organisations offering short-term "payday" loans.

The situation is particularly difficult in the provinces, where the standard of living is low and people are ill-informed about their legal rights.

Anti-debt collector app

Siberian programmer Yevgeny Pyatkovsky, who is in his 30s, has created a smartphone app that allows users to add numbers of debt collectors to a database and block their calls. 

Designed initially for his own family, the Antikollektor app now has 300,000 users, he said.

He explained that the app has a dual aim: to protect relatives of debtors, who are sometimes also targeted, and to spare people who owe money from the "enormous stress" of harassment by debt collectors.

After long ignoring the issue, the authorities finally took notice as media reports of abuses by debt collectors have multiplied.

The investigative committee and the prosecutor general's office vowed to severely punish a debt collector in the Volga city of Ulyanovsk, who in January threw a Molotov cocktail into the house of a man who had taken out a small loan, causing his two-year-old grandson to suffer serious burns.

In mid-February, the speakers of the upper and lower houses of parliament, Sergei Naryshkin and Valentina Matviyenko, submitted a draft law regulating debt collection.

It limits the lawful number of phone calls debt collectors can make and bans them altogether at night, as well as penalising harassment.

But Malinina believes it does not go far enough.

"The constitution already bans entering properties, making threats and resorting to physical violence," she complained.

TIANJIN, China — Europe's largest aircraft manufacturer Airbus started construction Wednesday on a new facility to deliver wide-body planes in China, as it faces off against bitter US rival Boeing for market share in the world's second-largest economy.

At a ceremony in the northern port of Tianjin, Airbus Chief Executive Officer Fabrice Bregier and Chinese officials officially broke ground for the completion and delivery centre that will produce two A330 planes per month.

The centre is an expansion of the firm's existing final assembly plant for A320 single-aisle aircraft in the city.

It comes with China's economic growth at its weakest in a quarter of a century and concerns over its outlook sending shivers through global stock exchanges.

But Bregier said that "this is not true for our market", adding that increased middle-class incomes and easing visa rules were driving a boom in Chinese air travel.

The world's second-largest economy is already Asia's biggest aircraft buyer as a growing middle class takes to the skies in ever-increasing numbers. The country is forecast to have 1.7 billion air passengers by 2034, and is poised in the next two decades to become the largest civil aviation market in the world.

The new $150 million centre is the company's first such facility for wide-body aircraft outside Europe, and "marks a new milestone for Airbus' international footprint", Bregier said. 

It will take flyable unpainted aircraft from their headquarters in Toulouse, France and add cabins, furnishings and paint, before they are delivered to customers.

Boeing also plans to open a completion centre in China, it announced last year. The company sold 300 aircraft worth a record $38 billion during President Xi Jinping's visit to the US in 2015.

The two firms have been in a fierce battle for market share in China, where Airbus says it has gone from 27 per cent in 2004, before it opened the Tianjin final assembly line, to roughly 50 per cent today. 

The country is now Airbus' largest market, accounting for nearly a quarter of the planes it delivered in 2015. Days before the ground-breaking, Air China announced orders for 12 wide-body aircraft for $2.9 billion.

"I understand that our competitor is trying to mimic" the Airbus strategy by opening a facility, Bregier said in Tianjin, but added: "It's not really state-of-the-art."

A Boeing spokesman retorted: "Partnership is defined by more than a few buildings," calling its relationships in the country "second to none" in supporting the development of Chinese aviation.