Inflation to hit 15%: official
Inflation could climb as high as 15 percent next year depending on oil price levels, Finance Minister Alexei Kudrin told Vesti-24 television on Saturday. “This year, inflation could reach between 13.5 and 13.8 percent,” Kudrin said. “With [annual] growth of 2.4 percent and a price of US$50 per barrel, inflation will reach 11 percent next year. [But] if the price per barrel is lower, at 30 rather than US$50, inflation will be higher and could reach 15 percent,” he said. At the start of this month, Prime Minister Vladimir Putin said this year inflation would level out at 13 percent over the course of the year — up from 11.9 percent across last year. Kudrin also said the outlook for the ruble was unlikely to improve much from Friday’s three-year low against the dollar, at 29.0058 rubles per US dollar. Kudrin said that an optimistic assessment would see a recovery in value to around 31 or 32 rubles per US dollar.
Japan to lower earnings
The nation’s two biggest steelmakers will likely downgrade earnings for the year to next March and announce a 12 percent drop in profits, a leading Japanese business newspaper said yesterday. Nippon Steel in October said it expected a one percent year-on-year drop in operating profit to ¥540 billion (US$6 billion) but will now lower that estimate to ¥480 billion, a 12 percent decline, the Nikkei daily said. The paper cited falling output at key clients of the country’s top steel firm, especially automakers. Meanwhile JFE Holdings, the nation’s second-largest steelmaker, is also likely to downgrade projections for operating profit to ¥450 billion, which would also be down 12 percent from the previous year, the paper said.
Production halt ordered
Ecuadorian President Rafael Correa said on Saturday he ordered Italy’s Agip Oil company to halt production so Ecuador can meet OPEC’s agreed output cut for the country of 40,000 barrels a day. “I have instructed the Oil and Mining Minister to cut back on all of Agip’s production,” Correa said in his weekly radio and television program. Agip, a subsidiary of Italian energy giant EN, currently produces around 28,000 barrels of oil in Ecuador’s Amazon basin, under a 2000 contract Correa said is not profitable for the country. Through Agip’s production cut, he said, “we’ll get rid of 20,000 barrels of the 40,000 we have to slash” from our production. Without mentioning any names, Correa said he was considering cutting back on oil production of “other companies that do not benefit the country,” to fulfill the quota of the Organization of Petroleum Exporting Countries.
Deal could be delayed
Korea Development Bank may delay signing a contract for the sale of a controlling stake in Daewoo Shipbuilding & Marine Engineering Co if buyer Hanwha Group provides fundraising details. “Considering the importance conclusion of this contract has to the country’s economy, we can delay exercising our rights as a seller until Jan. 30,” Chung In-sung, senior executive director at the state-run bank, told reporters in Seoul today. A delay may be given if Hanwha “sincerely” carries out efforts to raise funds, he said. Hanwha earlier this month asked to pay in installments for 50.4 percent of the world’s third-biggest shipbuilder amid concerns the Seoul-based group can’t raise sufficient financing. Hanwha offered 6.5 trillion won (US$5 billion) for the stake, the Chosun Ilbo newspaper said on Oct. 25, without disclosing its sources.