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‘Sacred duty’: Inflation eats into Turkey’s Muslim feast



Istanbul merchants are selling far fewer animals for the Muslim festival of sacrifice because of Turkey's economic crisis
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With inflation in Turkey galloping, the sheep Gul Er buys every year for the Muslim festival of sacrifice in Istanbul looks agonisingly out of reach.

Prices have doubled or even tripled since President Recep Tayyip Erdogan began an unorthodox economic experiment last year that has seen Turks’ living standards suffer.

The young mother hopes to bargain down the price on one of the skimpiest-looking animals at a livestock fair held under white tents in a conservative corner of the city before the Kurban Bayrami (Eid al-Adha in Arabic) holiday.

“It is a sacred duty,” she said of buying a sheep, which along with oxen and goats are sacrificed in the name of Allah, with the meat traditionally shared with the poor, friends and neighbours.

“But this year, prices are unaffordable,” Er said, the stench of thousands of animals mixing with the sounds of haggling in the heavy summer air, ahead of Saturday’s first full day of festivities.

Annual inflation in Turkey has officially reached 78.6 percent, although economists and many ordinary Turks doubt government data.

Even if the official figures are to be believed, that is higher than in any other emerging market and nearly 10 times the record levels rocking the European Union, where the cost of living is unleashing political crises.

An independent survey prepared by the ENAG group — and believed by most Turks — puts the annual inflation rate at 175 percent.

Besides clouding Erdogan’s chances in next year’s election, these figures spell trouble for the merchants at the Istanbul animal fair.

– Snowballing problems –

Turkey’s agricultural chambers union chief Semsi Bayraktar expects sales to fall by a quarter this year.

Galip Toklu, a breeder who came to the 40,000-square-metre (10-acre) fair from the Black Sea city of Samsun, listed the ways inflation snowballs into seemingly endless problems.

The cost of animal feed has quadrupled while the amount he pays to drive his livestock to Istanbul has tripled since the last Kurban Bayrami, forcing Toklu to double the price of his meat.

“Last year, I sold 500 kilos (1,100 pounds) of beef for 20,000 liras. This year, I set my prices at 45,000 liras,” he said.

Yet few can now afford Toklu’s beef, while selling it any cheaper could put him out of business.

“Customers are unavoidably upset,” he said, his face sullen under a wide-brimmed hat.

– ‘Erdonomics’ –

While this year’s animal fair looks huge, its 160 tents are a fraction of the 500 erected in past years.

As the fair winds down, breeder Sinas Ates looks despondent, having failed to make a single sale in two days. Livestock farming in Turkey is “finished”, he grumbled.

Just like the sacrifice of sheep, Erdogan’s economic experiment — dubbed “Erdonomics” by sceptical global markets — is also linked to his faith.

Erdogan cites Islamic proscriptions on usury to justify his refusal to raise interest rates to fight inflation. 

High interest rates cause prices to rise, according to Erdogan’s logic, which contradicts accepted economic orthodoxy. 

So Erdogan has pushed the central bank to set interest rates even lower. Analysts at Capital Economics in London see the possibility of a crash of the lira as “a major risk”.

– ‘Allah’s orders’ –

At the market, Salih Yeter has responded to the crisis by coming out to look for the perfect sheep with seven friends, who will all contribute to the purchase.

“People usually can’t afford to eat meat,” the 57-year-old said, adding that giving away meat to the poor is particularly important in times of trouble.

The price of food has soared by 93 percent in the past year, according to official data, with meat prices pushing even higher.

This is especially painful for Er, whose daughter has a metabolic condition that restricts her to a meat diet.

“I can’t even respect my daughter’s diet,” the mother whispered.

But respect for the holy holiday’s traditions is binding, said Selahattin Kose, a “hajji” (one who has made the pilgrimage to Mecca), from the eastern city of Erzurum.

“Prices have doubled, but we have to deal with it,” Kose said. “It’s Allah’s orders.”

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US regulators clear Boeing to resume 787 deliveries




The FAA has approved changes Boeing made to production of its 787 Dreamliner which will allow deliveries to resume
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After more than a year, aviation giant Boeing will be allowed to resume deliveries of its 787 Dreamliner aircraft “in the coming days,” after the company made changes to its manufacturing process, US air safety regulators announced Monday.

Deliveries of the top-selling widebody plane have been halted since spring 2021, so the news will be welcomed by US airlines and travelers who have suffered from massive delays and canceled flights in recent weeks, partly due to the shortage of aircraft.

“Boeing has made the necessary changes to ensure that the 787 Dreamliner meets all certification standards,” the Federal Aviation Administration said in a statement.

The plane’s travails date to late summer 2020, when the company uncovered manufacturing flaws with some jets. Boeing subsequently identified additional issues, including with the horizontal stabilizer.

The difficulties curtailed deliveries between November 2020 and March 2021. Boeing suspended deliveries later in spring 2021 after more problems surfaced.

Acting FAA Administrator Billy Nolen met with safety inspectors in South Carolina last week to confirm they were satisfied with the company’s improvements, which were made to ensure they comply with standards and to identify potential risks after defects were uncovered on the plane.

“The FAA will inspect each aircraft before an airworthiness certificate is issued and cleared for delivery,” the statement said. “We expect deliveries to resume in the coming days.”

– Cleared for takeoff –

A company spokesman told AFP that Boeing will “continue to work transparently with the FAA and our customers toward resuming 787 deliveries,” but did not confirm the firm had received final FAA approval.

During a July 27 earnings conference call, Chief Executive Dave Calhoun described the company was “on the verge” of garnering approval, though he declined to give a precise target date.

At the end of June, Boeing had 120 Dreamliner planes in inventory and was producing the jet “at very low rates,” the company said in a filing.

The company’s stock price gained ground on the news, closing 0.5 percent higher.

Inability to deliver the Dreamliner has dragged down Boeing’s profits, which plunged 67 percent in the second quarter. And the manufacturing changes have led to billions in additional costs for the company.

The firm has delivered just over 1,000 of the planes since it was first introduced in 2004.

The enhanced regulatory scrutiny of the 787 and other Boeing planes comes on the heels of a pair of crashes in 2018 and 2019 on the 737 MAX, which led to aircraft being banned from the skies globally for more than a year.

But the MAX has since returned to service, enabling Boeing to ramp up production of the planes, collect meaningful revenues and announce significant new orders at the Farnborough Airshow earlier this month.

Even so, Boeing’s backlog of orders in the pipeline lags behind that of archrival Airbus.

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No recession in Switzerland this year: chief economist




The Swiss economy is 'doing well' despite the impact of the war in Ukraine on energy prices, the country's chief economist said
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Switzerland does not expect to dip into recession this year despite the threat of an energy supply squeeze, the government’s chief economist said Sunday.

The Swiss economy is “doing well” despite the impact of the war in Ukraine on energy prices, Eric Scheidegger told the SonntagsZeitung newspaper.

He said it was down to companies to steel themselves for the possibility of power shortages in the winter months.

“We may have to revise our economic forecast downwards for next year. The revised forecast will be published on September 20. However, we do not expect a recession for this year,” Scheidegger said.

“We run the risk of an energy supply bottleneck in winter. If there are persistent production interruptions in the EU and we ourselves have a gas shortage, it becomes problematic.

“In our negative scenario, we expect zero growth for 2023 instead of growth of almost two percent.”

Despite the threat of power shortages and the effects of the war in Ukraine, Scheidegger does not see a serious economic crisis heading towards Switzerland.

“At present, the economy is still doing well. Current indicators show that the economy in this country also developed well in the second quarter — after the outbreak of the war in Ukraine,” he said.

“Economic support measures such as general perks or tax relief are currently therefore neither necessary nor helpful,” he added.

– ‘Foreseeable events’ –

Scheidegger said the Swiss economy was less susceptible to high energy prices than other European countries as gas accounted for only five percent of its total energy consumption.

He said the government would discuss possible measures to curb high energy prices in the coming weeks, which could involve reducing health insurance premiums for low-income households.

The State Secretariat for Economic Affairs official said the help for businesses during the Covid-19 pandemic could not become the norm during economic downturns.

“It’s been known since spring that there can be a power shortage in winter. Companies have time to prepare for this,” he said.

“Companies can, and must, take this operational risk into account… it is up to companies to prepare for foreseeable events.”

As for inflation, he said Switzerland was “an island of bliss” compared to the United States, and inflation was likely to fall before the end of the year.

“At 3.4 percent, inflation is much lower here than in other countries.  Core inflation — inflation excluding fresh food, energy and fuel — is at two percent,” he said.

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Markets struggle as strong US jobs boost Fed rate hike bets




Attention turns to US inflation data this week after a forecast-beating jobs report put fresh pressure on the Federal Reserve to continue with its aggressive pace of interest rate hikes
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Asian markets struggled Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading — which was more than twice as high as expected — indicated the world’s top economy remained resilient despite rising prices and borrowing costs, it will complicate the bank’s plans to tighten monetary policy.

Traders have hoped that with several indicators pointing to a slowdown, including GDP figures showing a technical recession, policymakers could begin to ease back on their pace of rate hikes.

Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent.

“Friday’s payroll report indicates an overheated labour market that continues to tighten further,” said SPI Asset Management’s Stephen Innes.

“Hence at minimum, the markets expect another 100 basis points of Fed funds rate increases over the next three meetings… with risks skewed towards significant increases.”

All eyes are now on the release this week of US July inflation data, which is expected to show a slight slowdown from June but still at four-decade highs.

The “report seems very unlikely to offer ‘compelling evidence’ of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode.” Innes added.

The jobs figures left Wall Street’s main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade.

However, there was some relief that tensions had calmed since Nancy Pelosi’s visit to Taiwan last week sparked a furious reaction from China that saw it conduct days of live-fire military drills around the island.

Hong Kong dipped along with Sydney, Seoul, Singapore, Taipei, Manila, Jakarta and Wellington.

Tokyo edged up and Shanghai was flat, with better-than-expected Chinese trade data offset by fresh worries about Covid lockdowns in the country that threaten the economic recovery.

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

Bets on a recession across leading economies continued to weigh on oil prices as investors worry about the impact on demand — figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic.

A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.

Both main contracts have lost all the gains seen in the wake of Vladimir Putin’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 28,241.09 (break)

Hong Kong – Hang Seng Index: DOWN 0.6 percent at 20,072.68

Shanghai – Composite: FLAT at 3,227.00

Euro/dollar: DOWN at $1.0181 from $1.0184 Friday

Pound/dollar: DOWN at $1.2071 from $1.2075

Euro/pound: UP at 84.35 pence from 84.32 pence

Dollar/yen: UP at 135.32 yen from 135.00 yen

West Texas Intermediate: DOWN 0.2 percent at $88.87 per barrel

Brent North Sea crude: DOWN 0.3 percent at $94.68 per barrel

New York – Dow: UP 0.2 percent at 32,803.47 (close)

London – FTSE 100: DOWN 0.1 percent at 7,439.74 (close)

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