The World Bank has warned that poverty rates in Russia will return to the rates they reached in 2007 as the nation’s economy continues to contract, inflation rises, and individual purchasing power diminishes. These conditions underscore the belief, common in the former Soviet nation, that the ordinary people in Russia are once again bearing the brunt of the nation’s poor economic climate.
The Federal Reserve has again cut its growth outlook for the American economy as multiple signs of weakness come from numerous independent reports. The Atlanta Federal Reserve’s GDPNow cut its outlook to 0.4% growth in the first quarter of 2016, the third cut that has seen growth expectations more than halve. That is far below economists’ consensus expectations of 1.9% growth, and is indicative of the GDPNow model’s reliance on real-time data and larger data sets.
An official from the U.S. State Department assured members of the U.S. Congress that Iran would not gain access to American markets, according to Reuters. The Iranian Sanctions Act is set to expire in the later part of 2016, but Republicans intend to renew the restrictions before they expire.
Iran has cooperated with U.S. authorities regarding its nuclear program, but officials levied new sanctions in early 2016 when Iran conducted ballistic missile tests.
The World Bank has taken its first steps into the sharing economy, made famous in America by companies such as Uber, Lyft, and Airbnb. In the case of the World Bank, it seeks to use the sharing economy to ease crippling traffic in the Philippines under a program it has dubbed the “Open Traffic Initiative.”
The Federal Reserve is urging Americans to prepare for higher interest rates that will impact almost all debts, including student loans, mortgages, and credit cards. Despite interpretations of a dovish Janet Yellen after last week’s remarks that the Federal Reserve would remain patient and pace its interest rate hikes in accordance with data, a more recent speech from the Fed is chastising investors for not preparing themselves for higher interest rates.
In a meeting with ambassadors, Armenian President Serzh Sargsyan stated that conflict over the disputed Nagorno-Karabakh territory could erupt into a regional war between his country and Azerbaijan, according to Reuters.
Armenia lost 20 troops during skirmishes with Azerbaijani forces, as members of the international community call for an immediate cease-fire. Nagorno-Karabakh is part of Azerbaijan, but retains a large number of ethnic Armenians.
The Organization for Economic Cooperation and Development (OECD) has rated Israel as the second poorest among its member nations. This is surprising, given the relative level of education and salaries.
Indeed, when looking solely at gross salaries, Israel is 26th in the world; however, when examining net salaries (i.e., disposable income after taxes), the country is second worst in the world (second only to Mexico).
Both incomes and manufacturing activity are growing in America, leading to hopes that the economic recovery is finally here. Wage growth surged in March as 215,000 new jobs were created in the month, according to the Bureau of Labor Statistics. While the unemployment rate unexpectedly rose to 5%, jobs were gained “in retail trade, construction, and health care.”
The increase in total jobs and a shift towards job growth in higher paid industries helped wages, which were up 2.3% on a year-over-year basis in March.
German Foreign Minister Frank-Walter Steinmeier visited Kyrgyzstan and praised the government for its commitment to democracy, according to Deutsche Welle. Germany pledged additional money to Kyrgyzstan to combat the Islamic State’s growing influence in the region. Kyrgyz Foreign Minister Erlan Abdyldaev stated that his government needs more aid to combat the spread of radicalism.
The International Monetary Fund (IMF) spent the weekend trying to smooth tensions with Greece following the release of a transcript of leaked phone calls between IMF officials. The head of the International Monetary Fund, Christine Lagarde, took personal notice of the matter and attempted to smooth tensions with Greece Sunday after Greek officials raised questions about whether it can obtain further funding as part of its $98 billion bailout.
