Algerians heave a sigh of relief as government cuts income tax: Economic wrap

The government blames the hike in prices of vegetables, fruits and meat, on speculation

  
Image used for illustrative purpose.

Image used for illustrative purpose.

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RIYADH, CAIRO: Algerians heaved a sigh of relief as the country’s president instructed cuts on income taxes to help them mitigate the effects of soaring food prices.

President Abdelmadjid Tebboune “stressed the need to take all measures to preserve the purchasing power,” the presidency said in a statement after a Cabinet meeting.

The government blames the hike in prices of vegetables, fruits and meat, on speculation.

US economy

Julius Baer analysts have revised their 10-year Treasury yields to take into account mounting supply-side problems and China’s growth complications. While analysts still expect that 10-year yields will rise in the next 12 months, they expect that it will only be a slight increase compared to previous projections.

They also altered 3-month and 12-month Treasury yields to 1.85 percent and 1.90 percent respectively.

High-income business owners worry as Democrats plan to raise $2 trillion over the decade to increase social spending and combat climate change, the Wall Street Journal reported. This would heavily burden high-income owners of partnerships and so-called “S” corporations.

Fall in US unemployment is probably a bad sign, according to the WSJ. Economists say that this likely means that a higher number of people are leaving the workforce, who are much needed for stimulating the economy. The Labor Department’s unemployment rate only includes people who are not working but are actively seeking work. This leaves out all people who stopped looking for work when the pandemic began.

China’s growth

Julius Baer analysts also revised down their Chinese economic growth forecast to 7.9 percent for 2021.

Due to China’s dependence on exports and investment for the economic recovery, shortages in power have increased production costs and could possibly harm economic growth for the country.

They have decreased their quarter-on-quarter growth forecasts for Q3 and Q4 to 0.4 percent and 1.2 percent respectively. This led to a decline in the 2021 annual growth rate forecast to 7.9 percent.

Swiss inflation

Swiss monthly inflation remains almost the same in September at 0 percent compared to the previous month (0.2 percent), Federal Statistics Office data shows. This was accompanied by a yearly inflation rate of 0.9 percent in September 2021.

Unemployment in Spain

Spanish Ministry of Labor and Social Economy data revealed that the number of people registered as unemployed has decreased by 76,113 in September to reach a total of 3.3 million unemployed persons in Spain. This is a smaller drop compared to August which recorded a fall in the number of people registered as unemployed by 82,583.

Turkey

Turkish annual inflation rate reached 19.58 percent in September, a rise from 19.25 percent in August according to the Turkish Statistical Institute. This is the highest rate since March 2019. The month-on-month inflation rate also amounted to 1.25 percent in September compared to 1.12 percent in August.

Japan

Taro Asa, Japan’s outgoing minister of finance, said that he had pushed for a reduction in the central bank’s inflation target of 2 percent during the oil prices’ steep decline in the 2014-15 period. He added that the inflation target was difficult to achieve considering the circumstances.

Clarification

British Finance Minister Rishi Sunak said on Monday that he and Prime Minister Boris Johnson did not want to raise taxes again after a recent increase in social security contributions to help fund the health service and social care.

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