Public borrowing increases
The British chancellor of the exchequer will announce that annual public borrowing will reach almost £175 billion (US$260 billion) over the next two years when he unveils the budget next week, the Financial Times said yesterday. The figure will represent more than 12 percent of expected national income in the next financial year and the worst deficit since the second world war, it said. As a result, public spending will jump to about 48 percent of national income next financial year — a figure not seen for 27 years. Chancellor of the Exchequer Alistair Darling is expected to lower his economic growth projections when he delivers the government’s annual budget next Wednesday, after Britain fell into in late last year.
Funds to be liquidated
Two Luxembourg-domiciled investment funds that had money invested with Wall Street swindler Bernard Madoff are to be wound up, the country’s financial sector watchdog said on Wednesday. A Luxembourg court has ordered the Lux Alpha and the Herald Lux funds to be liquidated and proceeds are to be divided among investors, the Financial Sector Monitoring Commission said. Lux Alpha and Herald Lux were among the biggest Luxembourg-domiciled investment funds to have entrusted money with Madoff, a former fund manager and chairman of the NASDAQ stock market. Madoff was arrested on Dec. 11 and is to be sentenced on June 16 after pleading guilty to a massive US$50 billion pyramid fraud.
AT&T seeks deal extension
US telecom giant AT&T Inc is seeking to extend until 2011 the deal with Apple making it the exclusive service provider for the iPhone in the US, the Wall Street Journal said on Wednesday. The newspaper, citing “people familiar with the matter,” said AT&T chief executive Randall Stephenson was in discussions with Apple to extend their agreement, which expires next year. The report said the iPhone has been a huge boon to AT&T, which added 4.3 million iPhone subscribers in the second half of last year alone. Stephenson said that with or without the iPhone AT&T plans to invest heavily in wireless and that two-thirds of its capital outlays in the next five years will go to wireless-network investments and acquisitions.
PRC, Argentina swap money
Argentina and China have finalized a deal to swap US$10.2 billion worth of their currencies and avoid using US dollars in bilateral trade. A central bank statement on Wednesday says the swap is a contingency plan to bolster liquidity amid the global financial crisis. It was China’s first such agreement in Latin America. The move aims to cut trading costs associated with currency exchanges by letting Argentine importers buy Chinese products directly in yuan — and vice versa.
Exports may drop 30 percent
The country’s exports may decline 30 percent in value this year due to the global economic crisis, Finance Minister Sri Mulyani Indrawati said. In terms of volume, shipments may drop by between 5 percent and 8 percent this year on lower demand for goods, Sri Mulyani told reporters in Jakarta yesterday. Separately, Trade Minister Mari Pangestu said imports may decline by as much as 12 percent. Exports tumbled 33 percent in February from a year earlier to US$7.08 billion, the country’s statistics agency said, as companies sold less at lower prices.