Supporters of President Emmanuel Macron of France celebrating on Sunday night in Paris.Credit…Thibault Camus/Associated Press
PARIS — Officials across Europe swiftly reacted with a sigh of relief on Sunday after President Emmanuel Macron of France comfortably beat his far-right rival, Marine Le Pen, in the presidential election.
“Together, we will advance France and Europe,” Ursula von der Leyen, the president of the European Commission, the European Union’s executive arm, wrote in French on Twitter.
Charles Michel, the president of the European Council, wrote on Twitter that “we can count on France for five more years,” while Chancellor Olaf Scholz of Germany said Mr. Macron’s re-election was a “vote of confidence in Europe.”
Mr. Macron’s office said on Sunday that Mr. Scholz had called Mr. Macron to congratulate him. “It is the first call that the president has received and taken, a sign of Franco-German friendship,” his office said.
At home, Jean-Yves Le Drian, Mr. Macron’s foreign minister, told France 2 television that he was “convinced” Mr. Macron would be “up to the challenges that await.”
Final results are not yet published, but French pollsters project that Mr. Macron has won with roughly 58 percent of the vote. Still, his political opponents warned that his next term would have to take into account the simmering anger in the French electorate, as the far right won more of the vote than it has in decades.
“There has never been such a vote of despair,” Christian Jacob, the head of the conservative Républicain party, said on French television.
Roughly 28 percent of the French electorate sat out this round of the election — the highest level in over 50 years in the second round of a presidential vote.
“He is floating in a sea of abstention, and blank or null ballots,” Jean-Luc Mélenchon, the firebrand leftist who came in a strong third in the first round of the elections early this month, said in a speech on Sunday of Mr. Macron.
Mr. Mélenchon hopes to become prime minister if his party gets a strong majority in the parliamentary elections, to be held in June. “The third round starts tonight,” he said.
Top European leaders had expressed barely veiled alarm at the possibility of a Le Pen victory. Last week, the leaders of Germany, Portugal and Spain had taken the highly unusual step in an opinion article in Le Monde of implicitly urging French voters to reject her.
On Sunday, Christian Lindner, the finance minister in Germany, said a united Europe was the biggest winner. “This choice was a directional choice,” he wrote on Twitter. “It was about fundamental questions of values.”
Prime Minister Pedro Sánchez of Spain welcomed Mr. Macron’s victory as proof that the French want “a free, strong and just E.U.”
Officials outside of the European Union reacted, as well.
President Volodomyr Zelensky of Ukraine also congratulated Mr. Macron on his victory, calling him a “real friend of Ukraine” on Twitter. “I appreciate his support and I am convinced that we will move forward together toward new shared victories,” he wrote.
And, Christine Lagarde, the head of the European Central Bank, extended her “warmest congratulations” to Mr. Macron.
“Strong leadership is essential in these uncertain times and your tireless dedication will be much needed to tackle the challenges we are facing in Europe,” Ms. Lagarde wrote on Twitter.
And Prime Minister Boris Johnson of Britain tweeted that “France is one of our closest and most important allies.”
“I look forward to continuing to work together on the issues which matter most to our two countries and to the world,” Mr. Johnson wrote.
Liz Alderman and Raphael Minder contributed reporting.
Correction:
April 24, 2022
An earlier version of this article misstated the position of Christine Lagarde. She is the head of the European Central Bank, not the head of the International Monetary Fund.
President Vladimir V. Putin of Russia claimed victory in Mariupol on Thursday despite persistent fighting there, publicly calling off an assault on the final Ukrainian stronghold in the devastated city in a stark display of the Kremlin’s desire to present a success to the Russian public.
Mr. Putin ordered his defense minister, Sergei K. Shoigu, in a choreographed meeting shown on Russian television, not to storm the sprawling, fortress-like Azovstal steel mill complex where 2,000 Ukrainian fighters were said to be holed up, and instead to blockade the plant “so that a fly can’t get through.” That avoids, for now, a bloody battle in the strategic port city that would add to Russia’s mounting casualty toll and tie down troops who could be deployed to the broader battle for eastern Ukraine.
“Of course, getting control of such an important center in the south as Mariupol is a success,” Mr. Putin was shown telling Mr. Shoigu, though the city is not yet fully under Russian control. “Congratulations.”
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President Vladimir V. Putin used a choreographed meeting with his defense minister to claim major progress in the war, saying that he ordered Russian troops to blockade a steel plant where Ukrainian fighters and civilians have taken refuge.CreditCredit…Alexander Ermochenko/Reuters
The fight for Mariupol carries enormous significance for both sides. It is the last pocket of serious resistance in the land bridge the Kremlin has created between territory it already holds in the Donbas region in the east and the Crimean Peninsula in the south. It is also home to much of Ukraine’s Azov Battalion, filled with far-right fighters who give a sheen of credibility to Mr. Putin’s false claim that Ukraine is run by Nazis and that he is “denazifying” the country.
The battle for the city also illustrates both the brutality of the Russian invasion and its struggles — truths that have galvanized much of the world but that Moscow has worked hard to conceal from its own people. Mariupol has been under siege for more than a month, much of it lies in ruins, and satellite images show a growing mass grave on the city’s outskirts. Roughly three-quarters of the residents have fled and, according to Ukrainian officials, about 20,000 civilians there have been killed — yet it is still not fully conquered.
Russia is shifting the focus of the war to gaining territory and wiping out Ukrainian forces in Donbas, where Moscow-backed separatists have been fighting Ukraine since 2014. Britain’s Defense Ministry said Thursday in an intelligence assessment that the Kremlin is eager to make swift gains that it can trumpet on May 9, at the annual celebrations of victory over Nazi Germany in 1945.
At the White House, President Biden said the fight for Donbas was “going to be more limited in terms of geography but not in terms of brutality,” compared to the early phase of the war. But, he added, Russia will “never succeed in dominating and occupying all of Ukraine.”
Mr. Biden announced another $800 million package of weapons for Ukraine, including dozens of heavy howitzers, 144,000 shells for them, and tactical drones, bringing total military aid this year to well above $3 billion. The weapons supplied by NATO nations are becoming increasingly heavy and sophisticated, reflecting an expected shift in the nature of combat as the war pivots to Donbas, but the president said some of armaments will remain secret.
President Biden speaking about the war in Ukraine from the White House on Thursday.Credit…Kenny Holston for The New York Times
“We won’t always be able to advertise everything that we, that our partners are doing,” Mr. Biden said. Referring to the U.S.-made antitank missile that Ukrainians have used to devastating effect, he added, “To modernize Teddy Roosevelt’s advice, sometimes we will speak softly and carry a large Javelin.”
Mr. Biden also banned ships tied to Russia from U.S. ports, and announced $500 million in economic aid to Ukraine — though the government in Kyiv told the International Monetary Fund that over the next three months it will need $15 billion. The White House also detailed plans for accepting up to 100,000 refugees from Ukraine, saying that U.S. citizens can begin applying to sponsor the immigrants on Monday.
The war in Ukraine took center stage in the French presidential campaign in a televised debate Wednesday night between President Emmanuel Macron and his far-right challenger, Marine Le Pen, who has in the past praised Mr. Putin. She spoke against arming Ukraine and said Mr. Macron’s efforts to cut imports of Russian energy would hurt France economically. He replied, “you are, in fact, in Russia’s grip,” noting that Ms. Le Pen’s party had borrowed from a Kremlin-linked bank.
The Kremlin worked quickly to portray the battle for Mariupol as a success. Dmitri S. Peskov, Mr. Putin’s spokesman, told reporters that there was now “an opportunity to start establishing a peaceful life” in Mariupol and start “returning the population to their homes.”
Mr. Peskov described the Azovstal steel plant — an immense Soviet-era complex near the city center — as “a separate facility” with no impact on life elsewhere in the city. Ukrainian fighters have been hiding for weeks in the plant’s underground bunkers, along with about 1,000 civilians, amid rising concerns they lack food and water.
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Ramzan Kadyrov, the strongman leader of the southern Russian republic of Chechnya, said on Wednesday that his troops would soon help Russia capture the Azovstal plant in its entirety. In Thursday’s televised meeting, Mr. Shoigu told Mr. Putin that it would take three to four days to clear the plant.
But Mr. Putin responded by calling the storming of the plant “impractical,” and added, “I order it to be canceled.”
It was not clear what that would mean on the ground; shelling and rocket attacks on the steel mill complex continued on Thursday, Staff Sgt. Leonid Kuznetsov of the Ukrainian National Guard, one of the soldiers there, said via text message. He said that shortly before he heard about Mr. Putin’s public order, Russian troops had attempted to storm the plant, coming within about 20 meters of his hide-out. The Ukrainians, he said, were running out of ammunition.
In directing Mr. Shoigu on a national broadcast, Mr. Putin, who made the decision to go to war, presented himself as a rational and humane leader. “This is the case when we must think — that is, we must always think, but even more so in this case — about preserving the life and health of our soldiers and officers,” he said. “There is no need to climb into these catacombs and crawl underground through these industrial facilities.”
Implicit in his statement was a potential credibility challenge for Mr. Putin, stemming from his unwillingness to admit setbacks and blunders in the war to his own people. The government and military have not acknowledged the deaths of Russian sailors on the missile cruiser Moskva, pride of Russia’s Black Sea fleet, which was sunk last week, but information about missing troops is increasingly circulating online.
Coming after Russia’s decision last month to abandon its stalled campaign in the north of Ukraine, the sinking of the Moskva — Ukraine claims to have hit it with two missiles — and the morass in Mariupol, once a thriving industrial and shipping hub, underscore the systemic weaknesses bedeviling the Russian military.
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On Jan. 20, The New York Times captured drone video over the sprawling Azovstal Steel and Iron works complex in Mariupol, Ukraine. Now, it is a battered fortress for the last Ukrainian defenders.
But costly as Mariupol has been for Russia, it is far costlier for Ukraine. Civilian casualties are high, though for now there are only rough estimates, and nearly all the vital infrastructure — including some of Ukraine’s biggest export-oriented enterprises — have been destroyed. Hospitals, theaters, schools and homes have been reduced to rubble.
President Volodymyr Zelensky of Ukraine said on Thursday that he would trade Russian soldiers who had been taken prisoner for the civilians sheltered at Azovstal, but he said that Russia had not yet responded to the offer.
Agreements to evacuate civilians en masse or bring in vital aid have mostly been thwarted, and have sometimes turned deadly, largely because Russian units have halted or fired on aid convoys. But day by day, people have managed to escape, on their own or in small groups.
On Thursday, a yellow bus carrying dozens of people from Mariupol arrived in the central Ukrainian city of Zaporizhzhia, where passengers described weeks hiding in basements, cold and hungry, amid endless shelling. They escaped in a harrowing, all-night drive through Russian-held territory, past countless checkpoints manned by jumpy Russian soldiers.
Ukrainian families arriving in Zaporizhzhia after fleeing from the Russian-occupied city of Mariupol on Thursday.Credit…Lynsey Addario for The New York Times
“In the city everything is destroyed, it’s terrifying,” said Matvei Popko, 10, who had fled with his mother, father and grandmother. “At any moment your home could get hit and collapse. For a little more than a month we lived in the basement.”
Ukrainian officials have accused Russia of forcibly deporting hundreds of thousands of civilians, including a large number from the Mariupol area, to Russian territory, for use as propaganda fodder and a bargaining chip. Russia denies the charge, which is a potential war crime.
The weeks of heavy fighting in Mariupol tied up a significant chunk of Russia’s combat power; at one point the battle was estimated by military analysts to include roughly 10 percent of all the Russian forces in Ukraine.
On Thursday, a Russian video news report from the scene showed a convoy of armored vehicles moving out of Mariupol. Seymon Pegov, a pro-Kremlin reporter embedded with the Russian forces in the city, interviewed Timur Kurilkin, a commander of a separatist battalion from Donetsk, a city in separatist-held eastern Ukraine.
“We are going home, to Donetsk,” said Mr. Kurilkin, walking past the vehicles. “Our next battle is tomorrow,” he said, without specifying where.
In Mariupol, Russia is already seeking to establish authority over civilian life. Denis Pushilin, the head of the self-proclaimed Donetsk People’s Republic, promised high school seniors that they would receive diplomas certified by the separatist entity.
On Wednesday, Andrei Turchak, a top official in Mr. Putin’s party, visited a school in Mariupol, which has already switched to Russian-language curriculum. In a video of his visit, posted to social media, he said, “Many textbooks have already been delivered and these deliveries will continue.”
Anton Troianovski reported from Hamburg, Germany, Ivan Nechepurenko from Tbilisi, Georgia, and Richard Pérez-Peña from New York. Reporting was contributed by Michael Schwirtz from Zaporizhzhia, Ukraine, David E. Sanger and Zach Montague from Washington, Neil MacFarquhar from Istanbul, Matthew Mpoke Bigg from London, Alan Yuhas from New York, and Cora Engelbrecht from Krakow, Poland.
Police officers stand in front of the National Congress as the senate debates the government’s agreement with the International Monetary Fund (IMF), in Buenos Aires, Argentina March 17, 2022. REUTERS/Agustin Marcarian
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BUENOS AIRES, March 17 (Reuters) – Argentina’s Senate voted late on Thursday to approve a $45 billion debt deal with the International Monetary Fund (IMF), converting the agreement into law and ensuring that the economically battered country can avoid another messy default.
After an extended debate, the IMF debt restructuring deal backed by President Alberto Fernandez was passed with 56 senators voting in favor, 13 against, along with three abstentions.
The South American country’s center-left Peronist government led by Fernandez struck a staff-level agreement with the international lender at the beginning of March, which was then approved last week by the Chamber of Deputies.
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It now needs to be signed off by the IMF board.
The deal lays out a fresh schedule of financing over a 30-month period to replace a failed $57 billion program from 2018 that the grains-producing country was unable to pay back after years of recession, spiraling inflation and capital flight.
It garnered broad support from the center-right opposition, though some ruling party lawmakers have opposed it citing the economic strings attached, which include reducing the fiscal deficit, raising interest rates and cutting energy subsidies.
“This agreement will allow us to accumulate reserves, which will favor Argentina’s exchanges with the world and will allow sustained growth,” Senator Sandra Mendoza, from the ruling Peronists, said during the debate.
Roberto Basualdo, a senator from the opposition alliance Together for Change, told Reuters earlier in the day that approving the deal was key to any future economic expansion.
“We need to grow and the only way to grow is to be in international markets,” he said.
Many lawmakers stressed that the vote removes the worst-case scenario for near-term economic prospects.
“By approving this agreement we are prioritizing the interests of the Argentine republic by preventing default,” said Senator Jose Torello, of the opposition alliance.
Fernandez wants a quick approval of the agreement ahead of a $2.8 billion payment due to the IMF at the beginning of next week and billions more later this year. The new program would see repayments made between 2026 and 2034.
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Reporting by Nicolás Misculin; Additional reporting by Lucila Sigal and Eliana Raszewski; Editing by Adam Jourdan, Hugh Lawson and David Alire Garcia
Our Standards: The Thomson Reuters Trust Principles.
Russia’s threatened invasion of Ukraine could have economic repercussions globally and in the United States, ramping up uncertainty, roiling commodity markets and potentially pushing up inflation as gas and food prices rise around the world.
Russia is a major producer of oil and natural gas, and the brewing geopolitical conflict has sent prices of both sharply higher in recent weeks. It is also the world’s largest wheat exporter, and is a major food supplier to Europe.
The United States imports relatively little directly from Russia, but a commodities crunch caused by a conflict could have knock-on effects that at least temporarily drive up prices for raw materials and finished goods when much of the world, including the United States, is experiencing rapid inflation.
Global unrest could also spook American consumers, prompting them to cut back on spending and other economic activity. If the slowdown were to become severe, it could make it harder for the Federal Reserve, which is planning to raise interest rates in March, to decide how quickly and how aggressively to increase borrowing costs. Central bankers noted in minutes from their most recent meeting that geopolitical risks “could cause increases in global energy prices or exacerbate global supply shortages,” but also that they were a risk to the outlook for growth.
contending with quickly rising prices, businesses are trying to navigate roiled supply chains and people report feeling pessimistic about their financial outlooks despite strong economic growth.
“The level of economic uncertainty is going to rise, which is going to be negative for households and firms,” said Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, noting that the effect would be felt most acutely in Europe and to a lesser degree in the United States.
A major and immediate economic implication of a showdown in Eastern Europe ties back to oil and gas. Russia produces 10 million barrels of oil a day, roughly 10 percent of global demand, and is Europe’s largest supplier of natural gas, which is used to fuel power plants and provide heat to homes and businesses.
The United States imports comparatively little Russian oil, but energy commodity markets are global, meaning a change in prices in one part of the world influences how much people pay for energy elsewhere.
It is unclear how much a conflict would push up prices, but energy markets have already been jittery — and fuel prices have risen sharply — on the prospect of an invasion.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
If a conflict drives global uncertainty and causes investors to pour money into dollars, pushing up the value of the currency, it could actually make United States imports cheaper.
Other trade risks loom. Unrest at the nexus of Europe and Asia could pose risk for supply chains that have been roiled by the pandemic.
Phil Levy, the chief economist at Flexport, said that Russia and Ukraine were far less linked into global supply chains than a country like China, but that conflict in the area could disrupt flights from Asia to Europe. That could pose a challenge for industries that move products by air, like electronics, fast fashion and even automakers, he said at an event at the National Press Foundation on Feb. 9.
“Air has been a means of getting around supply chain problems,” Mr. Levy said. “If your factory was going to shut because you don’t have a key part, you might fly in that key part.”
Some companies may not yet realize their true exposure to a potential crisis.
Victor Meyer, the chief operating officer of Supply Wisdom, which helps companies analyze their supply chains for risk, said that some companies were surprised by the extent of their exposure to the region during the Russian invasion of Ukraine in 2014, when it annexed Crimea.
Mr. Meyer noted that if he were a chief security officer of a company with ties to Ukraine, “I would militate rather strongly to unwind my exposure.”
There could also be other indirect effects on the economy, including rattling consumer confidence.
Households are sitting on cash stockpiles and probably could afford higher prices at the pump, but climbing energy costs are likely to make them unhappy at a moment when prices overall are already climbing and economic sentiment has swooned.
“The hit would be easily absorbed, but it would make consumers even more miserable, and we have to assume that a war in Europe would depress confidence directly too,” Ian Shepherdson at Pantheon Macroeconomics wrote in a Feb. 15 note.
Another risk to American economic activity may be underrated, Mr. Obstfeld said: The threat of cyberattack. Russia could respond to sanctions from the United States with digital retaliation, roiling digital life at a time when the internet has become central to economic existence.
“The Russians are the best in the world at this,” he said. “And we don’t know the extent to which they have burrowed into our systems.”
Antigua and Barbuda’s Prime Minister Gaston Browne poses for photo in this undated handout picture distributed to Reuters on January 25, 2022. Government of Antigua and Barbuda/Handout via REUTERS
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MIAMI, Jan 26 (Reuters) – The United States should increase financing and aid to the Caribbean to help the region recover from the pandemic and cope with the growing impact of climate change, Antigua and Barbuda Prime Minister Gaston Browne said in an interview.
Countries in the region are facing unsustainable debt loads often equivalent to 100% of gross domestic product (GDP), Browne said, adding that many have been relying on loans from China due to favorable terms offered by Chinese banks.
“I feel that the U.S. ought to pay more attention to the Caribbean region in helping us to maintain our standard of living to avoid any mass movement of people,” he said in a telephone interview on Tuesday.
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“If people are unable to live in (Caribbean) countries, then clearly they’ll end up on the shores of the United States as refugees.”
China has lent over $4 billion to Caribbean nations in the last 10 years, according to figures compiled by the Washington-based Inter-American Dialogue, much of which has gone to finance infrastructure development.
The conditions of those loans are more favorable than even those provided by multilateral agencies such as the International Monetary Fund (IMF), Browne said, adding that borrowing from Chinese banks should not be understood as a political statement.
The U.S. State Department did not immediately reply to a request for comment.
The Caribbean was disproportionately affected by the COVID-19 pandemic, according to the IMF, which last year said tourism-dependent countries in the region saw economies contract by 9.8% in 2020.
Many struggle to get aid because multilateral agencies tend to classify them as a middle- or high-income nations based on per-capita GDP measurements, which do not factor in the higher costs facing small island nations or their vulnerability to climate change.
Sustained U.S. support for changing those criteria would provide a significant boost for the Caribbean, Browne said.
“We expect the United States would use its influence in the multinational financial institutions to effect that change,” Browne said, adding he had not seen evidence that this was happening.
The vast majority of some $336 million in U.S. aid to members of the Caribbean Community, or Caricom, goes to Haiti, with only around $70 million being distributed among 13 other countries, he said. The population of those countries is around 7.5 million.
“It’s just miniscule,” Browne said.
Antigua and Barbuda, a nation of two main islands and several smaller ones in the northeastern Caribbean, has, like other countries in the region, faced growing expenses associated with extreme weather events.
Hurricane Irma in 2017 ravaged Barbuda, leaving all buildings uninhabitable and forcing the evacuation of all residents for nearly 18 months. Reconstruction costs were in excess of $200 million.
Antigua and Barbuda bore most of those costs, but got only $169,000 in aid from the United States in 2019, Browne said.
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Reporting by Brian Ellsworth in Miami; editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.
At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.
But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.
The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.
by 7 percent in the year through December, its fastest pace since 1982. But in recent months, it has also moved up sharply across many countries, a fact administration officials have emphasized.
“The inflation has everything to do with the supply chain,” President Biden said during a news conference on Wednesday. “While there are differences country by country, this is a global phenomenon and driven by these global issues,” Jen Psaki, the White House press secretary, said after the latest inflation data were released.
the euro area. Data released in the United Kingdom and in Canada on Wednesday showed prices accelerating at their fastest rate in 30 years in both countries. Inflation in the eurozone, which is measured differently from how the U.S. calculates it, climbed to an annual rate of 5 percent in December, according to an initial estimate by the European Union statistics office.
“The U.S. is hardly an island amidst this storm of supply disruptions and rising demand, especially for goods and commodities,” said Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution.
But some economists point out that even as inflation proves pervasive around the globe, it has been more pronounced in America than elsewhere.
“The United States has had much more inflation than almost any other advanced economy in the world,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.
The difference, he said, comes because “the United States’ stimulus is in a category of its own.”
White House officials have argued that differences in “core” inflation — which excludes food and fuel — have been small between the United States and other major economies over the past six months. And the gaps all but disappear if you strip out car prices, which are up sharply and have a bigger impact in the United States, where consumers buy more automobiles. (Mr. Furman argued that people who didn’t buy cars would have spent their money on something else and that simply eliminating them from the U.S. consumption basket is not fair.)
Administration officials have also noted that the United States has seen a robust rebound in economic growth. The International Monetary Fund said in October that it expected U.S. output to climb by 6 percent in 2021 and 5.2 percent in 2022, compared with 5 percent growth last year in the euro area and 4.3 percent growth projected for this year.
“To the extent that we got more heat, we got a lot more growth for it,” said Jared Bernstein, a member of the White House Council of Economic Advisers.
$5 trillion in spending in 2020 and 2021. That outstripped the response in other major economies as a share of the nation’s output, according to data compiled by the International Monetary Fund.
Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing.
Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation costs and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains could also lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
Americans found themselves with a lot of money in the bank, and as they spent that money on goods, demand collided with a global supply chain that was too fragile to catch up.
Virus outbreaks shut down factories, ports faced backlogs and a dearth of truckers roiled transit routes. Americans still managed to buy more goods than ever before in 2021, and foreign factories sent a record sum of products to U.S. shops and doorsteps. But all that shopping wasn’t enough to satisfy consumer demand.
stop spending at the start of the pandemic helped to swell savings stockpiles.
And the Federal Reserve’s interest rates are at rock bottom, which has bolstered demand for big purchases made on credit, from houses and cars to business investments like machinery and computers. Families have been taking on more housing and auto debt, data from the Federal Reserve Bank of New York shows, helping to pump up those sectors.
But if stimulus-driven demand is fueling inflation, the diagnosis could come with a silver lining. It may be easier to temper consumer spending than to rapidly reorient tangled supply lines.
People may naturally begin to buy less as government help fades. Spending could shift away from goods and back toward services if the pandemic abates. And the Fed’s policies work on demand — not supply.
As the world economy struggles to find its footing, the resurgence of the coronavirus and supply chain chokeholds threaten to hold back the global recovery’s momentum, a closely watched report warned on Tuesday.
The overall growth rate will remain near 6 percent this year, a historically high level after a recession, but the expansion reflects a vast divergence in the fortunes of rich and poor countries, the International Monetary Fund said in its latest World Economic Outlook report.
Worldwide poverty, hunger and unmanageable debt are all on the upswing. Employment has fallen, especially for women, reversing many of the gains they made in recent years.
Uneven access to vaccines and health care is at the heart of the economic disparities. While booster shots are becoming available in some wealthier nations, a staggering 96 percent of people in low-income countries are still unvaccinated.
restrictions and bottlenecks at key ports around the world have caused crippling supply shortages. A lack of workers in many industries is contributing to the clogs. The U.S. Labor Department reported Tuesday that a record 4.3 million workers quit their jobs in August — to take or seek new jobs, or to leave the work force.
Germany, manufacturing output has taken a hit because key commodities are hard to find. And lockdown measures over the summer have dampened growth in Japan.
Fear of rising inflation — even if likely to be temporary — is growing. Prices are climbing for food, medicine and oil as well as for cars and trucks. Inflation worries could also limit governments’ ability to stimulate the economy if a slowdown worsens. As it is, the unusual infusion of public support in the United States and Europe is winding down.
6 percent projected in July. For 2022, the estimate is 4.9 percent.
The key to understanding the global economy is that recoveries in different countries are out of sync, said Gregory Daco, chief U.S. economist at Oxford Economics. “Each and every economy is suffering or benefiting from its own idiosyncratic factors,” he said.
For countries like China, Vietnam and South Korea, whose economies have large manufacturing sectors, “inflation hits them where it hurts the most,” Mr. Daco said, raising costs of raw materials that reverberate through the production process.
The pandemic has underscored how economic success or failure in one country can ripple throughout the world. Floods in Shanxi, China’s mining region, and monsoons in India’s coal-producing states contribute to rising energy prices. A Covid outbreak in Ho Chi Minh City that shuts factories means shop owners in Hoboken won’t have shoes and sweaters to sell.
worldwide surge in energy prices threatens to impose more hardship as it hampers the recovery. This week, oil prices hit a seven-year high in the United States. With winter approaching, Europeans are worried that heating costs will soar when temperatures drop. In other spots, the shortages have cut even deeper, causing blackouts in some places that paralyzed transport, closed factories and threatened food supplies.
China, electricity is being rationed in many provinces and many companies are operating at less than half of their capacity, contributing to an already significant slowdown in growth. India’s coal reserves have dropped to dangerously low levels.
And over the weekend, Lebanon’s six million residents were left without any power for more than 24 hours after fuel shortages shut down the nation’s power plants. The outage is just the latest in a series of disasters there. Its economic and financial crisis has been one of the world’s worst in 150 years.
Oil producers in the Middle East and elsewhere are lately benefiting from the jump in prices. But many nations in the region and North Africa are still trying to resuscitate their pandemic-battered economies. According to newly updated reports from the World Bank, 13 of the 16 countries in that region will have lower standards of living this year than they did before the pandemic, in large part because of “underfinanced, imbalanced and ill-prepared health systems.”
Other countries were so overburdened by debt even before the pandemic that governments were forced to limit spending on health care to repay foreign lenders.
In Latin America and the Caribbean, there are fears of a second lost decade of growth like the one experienced after 2010. In South Africa, over one-third of the population is out of work.
And in East Asia and the Pacific, a World Bank update warned that “Covid-19 threatens to create a combination of slow growth and increasing inequality for the first time this century.” Businesses in Indonesia, Mongolia and the Philippines lost on average 40 percent or more of their typical monthly sales. Thailand and many Pacific island economies are expected to have less output in 2023 than they did before the pandemic.
debt ceiling — can further set back the recovery, the I.M.F. warned.
But the biggest risk is the emergence of a more infectious and deadlier coronavirus variant.
Ms. Gopinath at the I.M.F. urged vaccine manufacturers to support the expansion of vaccine production in developing countries.
Earlier this year, the I.M.F. approved $650 billion worth of emergency currency reserves that have been distributed to countries around the world. In this latest report, it again called on wealthy countries to help ensure that these funds are used to benefit poor countries that have been struggling the most with the fallout of the virus.
“We’re witnessing what I call tragic reversals in development across many dimensions,” said David Malpass, the president of the World Bank. “Progress in reducing extreme poverty has been set back by years — for some, by a decade.”
Tightening the Taliban’s restrictions on women, the group’s new chancellor for Kabul University announced on Monday that women would be indefinitely banned from the institution either as instructors or students.
“I give you my words as chancellor of Kabul University,” Mohammad Ashraf Ghairat said in a Tweet on Monday. “As long as a real Islamic environment is not provided for all, women will not be allowed to come to universities or work. Islam first.”
The new university policy echoes the Taliban’s first time in power, in the 1990s, when women were only allowed in public if accompanied by a male relative and would be beaten for disobeying, and were kept from school entirely.
Some female staff members, who have worked in relative freedom over the past two decades, pushed back against the new decree, questioning the idea that the Taliban had a monopoly on defining the Islamic faith.
funding from the World Bank and the International Monetary Fund. That effectively deprived thousands of government workers and teachers of their salaries.
Understand the Taliban Takeover in Afghanistan
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Who are the Taliban? The Taliban arose in 1994 amid the turmoil that came after the withdrawal of Soviet forces from Afghanistan in 1989. They used brutal public punishments, including floggings, amputations and mass executions, to enforce their rules. Here’s more on their origin story and their record as rulers.
Who are the Taliban leaders? These are the top leaders of the Taliban, men who have spent years on the run, in hiding, in jail and dodging American drones. Little is known about them or how they plan to govern, including whether they will be as tolerant as they claim to be. One spokesman told The Times that the group wanted to forget its past, but that there would be some restrictions.
According to estimates by lecturers who spoke with The Times, more than half of the country’s professors have left their jobs. Kabul University has lost a quarter of its faculty, one of the university’s board members said, adding that in some departments, like Spanish and French language, there are no teachers left.
“Kabul University is facing a brain drain,” said Sami Mahdi, a journalist and former lecturer at Kabul University School of Public Policy, who spoke over the phone from Ankara, Turkey. He flew out of the country the day before Kabul fell to the Taliban, he said, but has kept in touch with his students back home. “They are disheartened — especially the girls, because they know that they won’t be able to go back,” he said.
gunmen from ISIS walked into a classroom in Kabul University and opened fire, killing 22 of her classmates. After escaping through a window to save her life, she was shot in the hand while running from the building.
She was left traumatized and with chronic pain, but still continued to attend classes. By August, when Taliban soldiers entered Kabul, she was only months away from receiving her degree. But now the Taliban decree appears to have rendered her dream impossible.
“All the hard work I have done so far looks like it is gone,” she said. “I find myself wishing I had died in that attack with my classmates instead of living to see this.”
“The government can place them under watch and pressure them through their employers or relatives not to make trouble,” said Minxin Pei, a professor of government at Claremont McKenna College who is writing a study of China’s domestic security apparatus.
China has a lot riding on its ability to contain the fallout from an Evergrande collapse. After Xi Jinping, China’s most powerful leader in generations, began his second term in 2017, he identified reining in financial risk as one of the “great battles” for his administration. As he approaches a likely third term in power that would start next year, it could be politically damaging if his government were to mismanage Evergrande.
But China’s problem may be that it controls financial panics too well. Economists inside and outside the country argue that its safeguards have coddled Chinese investors, leaving them too willing to lend money to large companies with weak prospects for repaying it. Over the longer term, though, China’s bigger risk may be that it follows in the footsteps of Japan, which saw years of economic stagnation under the weight of huge debt and slow, unproductive companies.
By not forcefully signaling an Evergrande bailout, the Chinese government is essentially trying to force both investors and Chinese companies to stop channeling money to risky, heavily indebted companies. Yet that approach carries risks, especially if a disorderly collapse upsets China’s legions of home buyers or unnerves potential investors in the property market.
An abrupt default by Evergrande on a wide range of debts “would be a useful catalyst for market discipline, but could also sour both domestic and foreign investor sentiment,” said Eswar Prasad, an economics professor at Cornell University who is a former head of the China division at the International Monetary Fund.
Some global investors worry that Evergrande’s problems represent a “Lehman moment,” a reference to the 2008 collapse of the Lehman Brothers investment bank, which heralded the global financial crisis. Evergrande’s collapse, they warn, could expose other debt problems in China and hit foreign investors, who hold considerable amounts of Evergrande debt, and other property developers in the country.
Millions of Afghans could run out of food before the arrival of winter and one million children are at risk of starvation and death if their immediate needs are not met, top United Nations officials warned on Monday, putting the country’s plight into stark relief.
Secretary General António Guterres, speaking at a high-level U.N. conference in Geneva convened to address the crisis, said that since the Taliban takeover in Afghanistan last month, the nation’s poverty rate has soared and basic public services have neared collapse and, in the past year, hundreds of thousands of people have been made homeless after being forced to flee fighting.
“After decades of war, suffering and insecurity, they face perhaps their most perilous hour,” Mr. Guterres said, adding that one in three Afghans do not know where they will get their next meal.
The deepening humanitarian crisis tops a dizzying array of challenges confronting the new Taliban regime as it navigates governing a country propped up for decades by aid from international donors.
face potential collapse. At a local hospital in Chak-e Wardak, administrators have been unable to pay salaries or purchase new medicines with banks still closed, according to Faridullah, the facility’s resident doctor.
as drought enveloped the nation.
On Monday, in his first public remarks to Congress, Secretary of State Antony J. Blinken defended the Biden administration’s withdrawal from Afghanistan, saying there was no reason to believe the country would have stabilized had the United States remained.
“There’s no evidence that staying longer would have made the Afghan security forces or the Afghan government any more resilient or self-sustaining,” Mr. Blinken told the House Foreign Affairs Committee, in a live teleconference call. “If 20 years and hundreds of billions of dollars in support, equipment, and training did not suffice, why would another year, or five, or 10, make a difference?”
international aid workers having fled the country out of safety concerns. Those who remain are unsure if they will be able to continue their work.
During the conference on Monday, the U.N. said it needed $606 million in emergency funding to address the immediate crisis, while acknowledging that money alone will not be enough. The organization has pressed the Taliban to provide assurances that aid workers can go about their business safely. By the end of the gathering, international pledges had surpassed the amount requested.
But even as the Taliban sought to make that pledge, the U.N.’s human rights chief, Michelle Bachelet, also speaking in Geneva, said Afghanistan was in a “new and perilous phase” since the militant Islamist group seized power.
“In contradiction to assurances that the Taliban would uphold women’s rights, over the past three weeks, women have instead been progressively excluded from the public sphere,” she said, a warning that the Taliban would need to use more than words to demonstrate their commitment to aid workers’ safety.
Monday’s conference was also intended to drive home the enormousness of the crisis and offer some reassurance to Western governments hesitant to provide assistance that could legitimize the authority of a Taliban government that includes leaders identified by the U.N. as international terrorists with links to Al Qaeda.
their origin story and their record as rulers.
Who are the Taliban leaders? These are the top leaders of the Taliban, men who have spent years on the run, in hiding, in jail and dodging American drones. Little is known about them or how they plan to govern, including whether they will be as tolerant as they claim to be. One spokesman told The Times that the group wanted to forget its past, but that there would be some restrictions.
On Sunday, Taliban authorities sent assurances that they would facilitate humanitarian aid deliveries by road, he said.
some $12 billion in assistance to Afghanistan over four years.
While the Taliban did not have a representative in Geneva for the meeting, Zabihullah Mujahid, the Taliban’s deputy information and culture minister, said the government welcomed all humanitarian efforts by any nation, including the United States.
He also acknowledged that not even the Taliban expected to be in control of the country so quickly.
“It was a surprise for us how the former administration abandoned the government,” he said. “We were not fully prepared for that and are still trying to figure things out to manage the crisis and try to help people in any way possible.”
More than half a million Afghans were driven from their homes by fighting and insecurity this year, bringing the total number of people displaced within the country to 3.5 million, Filippo Grandi, the U.N. refugee chief said.
The danger of economic collapse raised the possibility of stoking an outflow of refugees to neighboring countries.
Said, 33, lived in Kunduz before fleeing to Kabul, where he now lives in a tent in a park. He has been there with his wife and three children for a month.
“It’s cold here, we have no food, no shelter, and we can’t find a job in this city,” he said, adding that he had not received any aid.“We all have children and they need food and shelter, and it’s not easy to live here.”
Jim Huylebroek contributed reporting from Chak-e Wardak, Afghanistan. Sami Sahak also contributed reporting.