Thu, Dec 25, 2014 - Page 15 News List

World Business Quick Take

Agencies

RETAILERS

Wal-Mart to hike wages

Minimum wage increases across the US are set to prompt Wal-Mart Stores Inc to adjust base salaries at 1,434 stores, impacting about one-third of its US locations, according to an internal memo reviewed by Reuters. The memo, which was sent to store managers earlier this month, offers insight into the impact of minimum wage hikes in 21 states due to come into effect on or near Thursday next week. These are adjustments that Wal-Mart and other employers have to make each year, but growing attention to the issue has expanded the scope of the change. Thirteen US states lifted the minimum wage this year, up from 10 last year and eight in 2012. For Wal-Mart, the biggest private employer in the US with 1.3 million workers, minimum wage legislation is not a small thing.

OIL

Argentina to cut prices

Argentina is set to cut the price for crude oil produced and sold in the nation to allow a 5 percent reduction in gasoline prices, the government said on Tuesday. The federal government, which regulates domestic energy prices, announced a US$7 per barrel cut in the fixed price of crude under a deal struck with private oil companies and oil-producing provinces in Latin America’s third-biggest economy. The measures would help ease price pressures on consumers facing one of the world’s highest inflation rates. However, it could disappoint producers, who have said a significant cut could jeopardize investment flows. Inflation is running at about 40 percent, according to economists, though the government clocks it at nearly half that. The government has set the price of local crude below international market prices, but the slump in global prices has left Argentine consumers suffering while producers benefit.

OIL

Iraq eyes OPEC help

Iraqi Oil Minister Adel Abdul Mahdi said OPEC would have to “step in” if oil prices keep falling amid oversupply. OPEC decided on Nov. 27 to maintain its output at 30 million barrels a day to defend market share amid a glut that has helped send oil prices to the lowest levels since 2009. Prices have dropped about 20 percent since the meeting with the oversupply estimated by Qatar at 2 million barrels a day. The group’s decision was taken after Saudi Arabian Oil Minister Ali al-Naimi said OPEC must protect its market share and let prices fall to trim output outside OPEC, Mahdi said. “We accepted the Saudi theory to correct the situation in the market as it made sense,” he said. The “fair price” of oil that was US$100 to US$105 a barrel is now closer to US$70 to US$80 a barrel, Mahdi said. Iraq’s Cabinet yesterday approved a budget based on an oil price of US$60.

MACROECONOMICS

Ukraine forecasts shrink

Ukrainian Minister of Finance Natalie Jaresko forecast the economy would shrink by 4.3 percent next year and warned of the huge challenge of getting state finances in order, as she presented a draft budget to parliament on Tuesday. A year of revolution and war with pro-Russian separatists has pushed the hryvnia currency to record lows and crippled the economy, which was already near bankruptcy after years of corruption and economic mismanagement. Jaresko said 30 percent of next year’s budget would be spent on defense and debt obligations, and the deficit would be 3.7 percent of GDP. She highlighted the financial toll of the standoff with eastern rebels, saying the conflict cost the government 100 million hryvnia (US$6.3 million) every day.

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