Business

WASHINGTON — The United States is very close to achieving a soft landing, the rare feat of tackling inflation without spurring a long recession, the IMF's chief economist told AFP.

Pierre-Olivier Gourinchas spoke to AFP ahead of Tuesday's publication of the International Monetary Fund's (IMF's) flagship World Economic Outlook (WEO) report on the health of the world economy.

The WEO report predicts that global growth will be slightly slower this year and next amid a slowdown in both China and India, while the US will remain a bright spot and the eurozone will continue to grow more slowly.

At the same time as US growth has remained buoyant, inflation has continued to ease toward the Federal Reserve's (Fed's) long-term target of 2 per cent, and the labour market has cooled — but remained pretty resilient.

"I think for the US, we're very close," Gourinchas said when asked if the Fed had successfully engineered a soft landing.

"Globally, what we're seeing is an inflation picture that is coming very close to central bank targets within the course of the next year," he added.

Gourinchas said that a number of supply-side factors had been supporting the US economy, including "very, very good" US productivity data, and a large rise in the number of foreign-born workers, which helped spur growth without fueling inflation.

But while it may have been good for growth, this spike in immigration has been controversial in the United States, where the Republican former president Donald Trump has sought to make it a key campaign issue ahead of the US presidential election on November 5.

Addressing China's property woes 

Gourinchas said the main issue for China's economy remained its ailing property sector, a key driver of growth in the world's second-largest economy.

"If you want to revive growth in China, you need to address the property sector," he said, adding that China must also find ways to "develop its domestic growth engines".

China has a very high level of households savings which, Gourinchas said, was party due to the lack of an effective safety net to support people.

"If we put in place these kind of safety nets... then they will reassure households," he said. "That will allow them to start spending more domestically, and that will help sustain medium term growth in China."

India's recent run of explosive growth is also showing signs of slowing, as the "pent-up demand accumulated during the pandemic" runs out, the IMF wrote in its WEO report.

"It's very important for them to try to grow as quickly as they can," Gourinchas said, adding that India should look to develop and deepening its domestic market integration and find ways to lift up its human capital.

"These are certainly vectors by which India could boost its growth," he said.

Russian economy surprises again 

Russia's economy has been surprisingly strong despite its costly ongoing war in Ukraine, now into its third year.

In October's WEO report, the IMF again upgraded its outlook for the Russian economy, and now predicts economic growth of 3.6  per cent this year — up 0.4  percentage-points from July — and slower growth of 1.3  per cent in 2025.

While Russia's economy "has been doing better than expected in the first half of the year", it is now facing rising price pressures, Gourinchas said.

"This is an economy that is trying to, at the same time, serve the needs of the domestic population, but also it is a war economy," he continued.

"So it needs to repurpose and invest in these sectors, and that's putting pressure on resources, and that's reflected in inflation," he added.

CALI, Colombia — UN Chief Antonio Guterres on Sunday appealed to nations gathered at a biodiversity summit in the Colombian city of Cali for "significant investment" in a fund set up to conserve and restore nature.

"We must leave Cali with significant investment in the Global Biodiversity Framework Fund [GBFF], and commitments to mobilise other sources of public and private finance," the secretary general said in a video played to delegates to the COP16 biodiversity conference that officially starts Monday.

The GBFF was created last year to help countries achieve the goals of the so-called Kunming-Montreal Global Biodiversity Framework adopted in Canada in 2022 with 23 targets to "halt and reverse" the loss of nature by 2030.

So far, countries have made about $250 million in commitments to the fund, according to agencies monitoring progress.

The fund is part of a broader agreement made two years ago for countries to mobilise at least $200 billion per year by 2030 for biodiversity, including of $20 billion per year from rich nations by 2025 to help the developing world.

Guterres highlighted that destroying nature increases conflict over resources, hunger and disease, fuels poverty and slashes GDP.

"A collapse in nature's services — such as pollination, and clean water — would see the global economy lose trillions of dollars a year, with the poorest hardest hit," he said at the ceremony that featured Indigenous rites and performances.

Avoiding such a future would entail countries "honouring promises on finance and accelerating support to developing countries", said Guterres.

"Those profiting from nature must contribute to its protection and restoration," he added.

BEIJING — Workers in China's capital voiced worries about their economic prospects recently, after Beijing posted its worst quarterly growth in over a year that it's hoping to correct with a slew of stimulus measures.

The 4.6 per cent expansion in July-September is the latest evidence that the country's post-pandemic recovery continues to sputter, as it suffers from sluggish consumption and a prolonged property sector crisis.

While officials have launched a string of policies over the past two years to reignite economic activity, they have had little effect.

"The economic situation is that it's very difficult to make money now," said 52-year-old coach driver Wang Youlong, who was taking a break before picking up a group of overseas tourists.

"My salary is too low, and sometimes [the company] doesn't send it on time."

There are hopes that a raft of stimulus unveiled since late last month will finally put the country back on track, but there is a worry that authorities are still not doing enough.

Wang said he thought every job was "difficult" at the moment.

His son had recently been forced to take a 3,000 yuan ($422) monthly pay cut, he told AFP, but still feared he might be let go in the future.

"You work today and don't know whether they'll want you to work tomorrow... employment is a big problem," he sighed.

In its announcement on Friday, the National Bureau of Statistics acknowledged a "complicated and severe external environment... as well as new problems of domestic economic development".

Hoping for the 'bazooka'

The measures unveiled last month were aimed at kickstarting consumption and addressing a painful debt crisis in the real estate sector.

The announcements — the most far-reaching in years — set off a blistering market rally fuelled by hopes for a long-awaited "bazooka" stimulus, but optimism has since tapered as a series of briefings left investors wanting.

Coach driver Wang said he hadn't noticed any benefits to his own life.

"It's not worth mentioning buying a house in Beijing, even in my hometown we can't afford it," he said.

In Beijing, people told AFP they remained cautious about spending.

A 25-year-old sales worker, also surnamed Wang, said she bought luxury items "less frequently than before".

"I don't have many sources of income and I hope to save some money," she told AFP.

"[Beijing] isn't particularly affordable for regular wage workers."

Others were more sanguine.

"People may be pessimistic about the situation... but for me, I actually feel quite normal," Shiyi, a short-video industry worker, told AFP.

"The industry I work in is still in quite a trending state, so for now it will be affected but not too much."

Even so, Shiyi is holding off on large purchases.

"Property prices are quite tempting right now, but I still want to earn more first [before buying]."

Liu, a 55-year-old pharmaceutical worker who asked to only use his surname, said he thought "the economy isn't the same as five or even 10 years ago".

"But I think for Beijingers the level of the economy is quite developed," he said.

"I hope the economy will improve, but I can't judge if it will."

SAN FRANCISCO — Netflix on Thursday said it added more than five million subscribers in the recently ended quarter but signalled slowing growth.

The streaming juggernaut said it ended September with 282.7 million subscribers, reporting a profit of $2.4 billion on revenue that jumped 15 per cent compared with the same period a year earlier to $9.8 billion.

Netflix shares rose nearly five per cent to $720.75 in after-market trades, trading at slightly more than double the price from a year earlier.

'Squid Game'

Netflix executives expect to end this year strong due to a line-up of coming releases that includes a second season of the global hit "Squid Game."

The dystopian Korean horror tale about a fictional, deadly game show remains by far the most-watched Netflix TV series ever.

Netflix this quarter will also stream a boxing match-up between Mike Tyson and Jake Paul as well as a pair of US National Football League games on Christmas.

"We're really excited about our line-up," said co-chief executive Ted Sarandos on an earnings call.

"We have a culture and operating model that allows us to create stories in more than 50 countries," he added.

Netflix said the average amount of time spent watching its platform grew to about two hours daily per member in the recently-ended quarter, touting a string of hits including "The Perfect Couple", "Emily in Paris," and "Beverly Hills Cop: Axel F."

Sarandos said that its show creators were curious about how they might use artificial intelligence tools.

Easing into ads

The streamer said that membership on ad-supported plans grew 35 per cent quarter-over-quarter.

Netflix next year should reach a scale sought by advertisers in the dozen countries where it offers ad-supported memberships, according to co-chief executive Greg Peters.

"It's worth noting we've got a lot of work still ahead of us to achieve that goal to make our offering better for advertisers," Peters said.

Ross Benes, senior analyst at eMarketer, warned that Netflix will need to be careful not to degrade the experience for viewers as it weaves ads into programming, and forecast that US ad revenue would be a small fraction of the money the company takes in.

In a bid to boost sputtering growth, the company launched an ad-subsidised offering last year around the same time as a crackdown on sharing passwords.

As part of that effort, Netflix also got rid of its cheapest commercial-free plan in the UK and Canada, with expectations of further changes of policy in that vein.

While Netflix gained 5.1 million subscribers overall in the quarter, it was a drop from the 8.8 million subscribers it added in the same period a year earlier, with the boost from its password-sharing crackdown appearing to abate.

"Netflix will eventually shore up its limited ad tier viewership with more partnerships and bundles that incentivize people to choose ad plans," analyst Benes said.

The company also launched an in-house advertising platform so that brands can better optimise its customer data, no longer partnering with Microsoft for that technology.

Investors have cheered on the moves, with Netflix shares gaining ground this year, despite the warnings that subscriber growth would slow.

In the United States, the company has begun to offer some users combined packages with its one-time rivals, making itself available through joint subscriptions with Peacock and Apple TV.

Netflix is seen as reigning supreme over the video content market, with Disney+ still struggling nearly five years after a launch that featured a slew of new content from its blockbuster Marvel and Star Wars universes.

HONG KONG — Stocks in Shanghai and Hong Kong slipped on a mixed day for Asian markets on Thursday as Chinese traders gave shrug to Beijing's latest plan to boost the country's troubled property sector, which came up short of expectations.

China's housing minister outlined a fresh batch of measures in the latest bid to convince traders the government was getting a handle on a painful real-estate crisis.

The world's number-two economy has struggled to recover since lifting strict Covid controls at the end of 2022, battered by a debt crisis in the property sector and torpid consumer demand.

Authorities announced a series of piecemeal measures in that time to little effect, but last month's raft of pledges sparked blockbuster rallies on the mainland and Hong Kong on hopes that even more were in the pipeline.

But news conferences last Tuesday and Saturday took the wind out of those sails and led to a fresh bout of volatility in trading floors.

And analysts said the latest briefing from housing minister Ni Hong also left investors wanting.

Ni said Thursday that officials would almost double the amount of credit available to complete unfinished housing projects to $562 billion and also help renovate a million homes.

The move, he said, would "be conducive to absorbing the existing stock of commercial housing".

But SPI Asset Management analyst Stephen Innes said: "They're still trying to talk the talk, with more noise about stabilising the property market.

"As the briefing rolled on, it was clear: traders were not thrilled.

"Let's be honest, though -- China's property mess isn't something that can be patched up with a few speeches and half-baked measures."

Hong Kong and Shanghai dropped more than one per cent, having started the day on a strong note, with property stocks -- which had rocketed in the wake of the initial round of measures -- tumbling.

There were also losses in Tokyo, Seoul, Manila and Mumbai, while London, Paris and Frankfurt all opened higher.

Sydney, Singapore, Wellington, Taipei, Bangkok and Jakarta also rose.

Heron Lim at Moody's Analytics said the latest round of announcements suggested China was "on its way to finding the bottom in housing prices".

However, he added: "We did not see an increase in funding for the purchasing of unsold inventory by (state-owned enterprises), which would have helped stabilise demand in the property segment.

"And the promise of reconstruction projects being expanded might be useful to spark a construction segment that has been in a lull from a lack of both private and public projects, but it remains just a promise with no number promised beyond the known 1 million homes thus far."

The tepid performance in Asia came after a strong lead from New York, where small-cap stocks rose as investors shifted out of big-name firms such as Amazon, Apple and Microsoft, which have soared this year on the back of demand for all things linked to artificial intelligence.

US investors also welcomed strong earnings from Morgan Stanley and United Airlines that helped offset a decision by Dutch tech giant ASML to cut its 2025 guidance and forecast a slump in sales bookings, which sparked worries over the outlook for the sector.

NEW YORK — Amazon announced significant investments in nuclear energy on Wednesday, joining other tech giants in aiming to meet the high electric power demands of cloud computing and artificial intelligence using atomic energy.

As companies including Microsoft, Amazon, and Google rapidly expand their global data center capabilities, they are actively seeking new electricity sources.

Amazon has signed three agreements to support the development of Small Modular Reactors (SMRs), which are more compact and potentially easier to deploy than traditional reactors.

The technology is still in its infancy and lacks regulatory approval, however, raising doubts about implementation timelines.

"One of the fastest ways to address climate change is by transitioning our society to carbon-free energy sources, and nuclear energy is both carbon-free and able to scale -- which is why it's an important area of investment for Amazon," said Matt Garman, CEO of Amazon Web Services.

Amazon's new partnerships include collaborating with Energy Northwest to develop four advanced SMRs in Washington state, potentially generating up to 960 megawatts of power by the early 2030s.

The company is also investing $500 million in X-energy, a leading SMR developer, to support more than five gigawatts of new nuclear-energy projects.

Additionally, Amazon is teaming up with Dominion Energy to explore an SMR project near Virginia's North Anna nuclear power station, aiming to add at least 300 MW of power to meet projected demand increases.

Northern Virginia, a global internet crossroads, is experiencing unprecedented growth in electricity demand due to data center expansion. Dominion Energy has indicated that new natural gas plants may be needed despite commitments to decarbonise the state's power grid by 2045.

But the need for fossil-fuel-fired generation to power data centre growth is at odds with the environmental ambitions of major tech companies, which are championing their ability to deliver AI's power without tarnishing their green credentials.

Google recently signed a deal with Kairos Power for SMR-generated electricity, while Microsoft plans to use power from the restarted Three Mile Island facility.

Amazon has also announced plans to locate a major data centre next to a 40-year-old nuclear facility in Pennsylvania.

According to Goldman Sachs, data center power demand is estimated to grow 160 per cent by 2030, with AI representing about 19 per cent of data centre power demand by 2028.

NEW YORK — US aircraft manufacturer Boeing on Tuesday unveiled measures meant to replenish its cash flow, including its intention to raise up to $25 billion, as it navigates recurrent production problems and a major US strike.

The company said it could raise the money via securities such as shares or bonds, according to a regulatory document.

It also earlier announced that it was in an agreement to obtain $10 billion in credit from multiple banks.

The moves come amid a worker strike by the International Association of Machinists and Aerospace Workers, who walked off the job on September 13 after overwhelmingly rejecting a contract offer.

The direct financial impact of the first month of the strike cost Boeing more than $3 billion, according to Anderson Economic Group.

Last week the company said it planned to cut 10 per cent of its workforce as it projected a large third-quarter loss, in the wake of the strike by some 33,000 workers in the Seattle regon.

The work stoppage has only added to the company's litany of problems.

Boeing sank into further turmoil in January when a window blew out mid-flight on an Alaska Airlines plane, necessitating an emergency landing on a 737 MAX, the aircraft involved in two fatal crashes in 2018 and 2019.

That led to the Federal Aviation Administration tightening oversight of Boeing's production processes, capping the company's output. Production on the MAX is now halted due to the IAM strike.

AMMAN — The Consumer Price Index (CPI), a key measure of inflation, increased by 1.65 per cent in the first nine months of 2024, reaching 110.57 points compared with 108.78 points in the same period of 2023, according to a report released by the Department of Statistics (DoS) on Monday.

The DoS report cited personal luggage as the most significant contributors to increasing inflation, accounting for 10.52 per cent, followed by water and sanitation at 7.34 per cent, union contributions at 5.86 per cent, rents at 389 per cent, and vegetables, dried and canned legumes at 3.76 per cent. 

For September 2024, the CPI reached 110.81 points, marking a 1.01 per cent increase compared with 109.70 points in July 2023, the Jordan News Agency, Petra, reported. 

Key drivers of the monthly inflation were personal luggage, up by 17.07 per cent, and sanitation by 7.34 per cent, tobacco by 6.7 per cent, union contributions by 5.86 per cent and entertainment by 4.99 per cent.

Declines in clothing by 4.59 per cent, fruit and nuts by 3.18 per cent, vegetables and dried and canned legumes by 3 per cent, furniture, carpets and bedding by 2.94 per cent helped moderate the overall increase, DoS added.

On a month-to-month basis, the index for September 2024 went down to 110.81 points compared with August's 111.17 points. 

The most notable contributors to the monthly decline were vegetables, dried and canned legumes at 5.1 per cent, meat and poultry at 4.03 per cent, clothing at 3.10 per cent, fruits and nuts at 2.58 per cent and transport at 0.98 per cent.