Tue, Jul 05, 2016 - Page 10 News List

World Business Quick Take

Agencies

OIL

Kuwait posts budget deficit

Kuwait posted a budget deficit of US$18.2 billion in the fiscal year that ended on March 31, as lower crude prices slash into government revenue, Kuwaiti acting oil minister Anas al-Saleh said. The state-run Kuwait News Agency on Sunday quoted al-Saleh as saying the deficit was nearly US$9 billion less than budgeted for. The budget deficit reflects the impact lower oil prices have had on crude exporters, particularly Gulf Arab monarchies that rely on oil revenues to support generous subsidies, welfare benefits and public sector wages.

MACROECONOMY

UK to cut corporate tax

British Chancellor of the Exchequer George Osborne plans to slash corporation tax to less than 15 percent to tempt businesses to stay following the nation’s shock vote to leave the EU, the Financial Times reported on Sunday. Osborne plans to create a what he called a super-competitive economy, cutting corporation tax by more than 5 percentage points from 20 percent to the lowest for any major economy, it said. The move, which would bring the tax close to Ireland’s 12.5 percent rate, follows concern companies could flee the uncertainty after Brexit.

OIL

Venezuela revenues fall

Venezuela’s oil revenues plummeted 40.7 percent last year due to sinking global oil prices, the nation’s state-owned Petroleos de Venezuela SA (PDVSA) said in its annual report released on Sunday. PDVSA — the world’s fifth-largest oil company — earned US$72.2 billion in revenues last year, a sharp drop from 2014’s US$121.9 billion. Its net profit fell 19 percent to US$7.3 billion. The first half of this year saw the value of Venezuela’s crude oil tumble to an average of US$31.15 per barrel, the Ministry of Petroleum and Mining said on Friday last week. The sector’s nose-dive has exacerbated the nation’s already dire economic situation in which 80 percent of basic consumer products, including food and medicine, are in short supply. Soaring prices and shortages have, in turn, led to riots, looting and vigilante justice.

MACROECONOMY

Japanese firms cut forecasts

Japanese companies cut their forecasts for inflation for five years’ time, dimming the prospects for Bank of Japan (BOJ) Governor Haruhiko Kuroda meeting the 2 percent inflation target set for the next fiscal year. Companies expect 1.1 percent of inflation in five years, the lowest estimate since the survey began in 2014, according to a report by the BOJ yesterday. In three years, companies also expect 1.1 percent price growth and 0.7 percent in one year. The price outlook among companies illustrates a stark contrast with the BOJ’s projection of reaching the 2 percent inflation target by March 2018.

CONSTRUCTION

Kier plays down Brexit

Kier Group PLC, a construction and support services firm, said the UK’s decision to exit the EU had not impacted its business to date due to the resilience afforded by its strong order books and wide range of activities. The company, whose activities range from building power stations to outsourcing work for local councils, said that although the EU referendum results had created some uncertainty, its underlying trading had been in line with its own expectations. The property unit had a pipeline in excess of £1 billion, consisting of projects that were being built non-speculatively, and the residential unit’s mixed tenure business had a £600 million-plus (US$796.1 million) pipeline, Kier said.

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