Bussiness
Ukraine war: World Bank boss warns over global recession
The head of the World Bank has warned that Russia’s invasion of Ukraine could cause a global recession as the price of food, energy and fertiliser jump.
David Malpass told a US business event on Wednesday that it is difficult to “see how we avoid a recession”.
He also said that a series of coronavirus lockdowns in China is adding to concerns about a slowdown.
His comments are the latest warning over the rising risk that the world economy may be set to contract.
“As we look at the global GDP… it’s hard right now to see how we avoid a recession,” Mr Malpass said, without giving a specific forecast.
“The idea of energy prices doubling is enough to trigger a recession by itself,” he added.
Last month, the World Bank cut its global economic growth forecast for this year by almost a full percentage point, to 3.2%.
GDP, or Gross Domestic Product, is a measure of economic growth. It is one of the most important ways of measuring how well, or badly, an economy is performing and is closely watched by economists and central banks.
It helps businesses to judge when to expand and recruit more workers or invest less and cut their workforces.
Governments also use it to guide decisions on everything from tax and spending. It is a key gauge, along with inflation, for central banks when considering whether or not to raise or lower interest rates.
Mr Malpass also said that many European countries were still too dependent on Russia for oil and gas.
That’s even as Western nations push ahead with plans to reduce their dependence on Russian energy.
He also told a virtual event organised by the US Chamber of Commerce that moves by Russia to cut gas supplies could cause a “substantial slowdown” in the region.
He said higher energy prices were already weighing on Germany, which is the biggest economy in Europe and the fourth largest in the world.
Developing countries are also being affected by shortages of fertiliser, food and energy, Mr Malpass said.
Mr Malpass also raised concerns about lockdowns in some of China’s major cities – including the financial, manufacturing and shipping hub of Shanghai – which he said are “still having ramifications or slowdown impacts on the world”.
“China was already going through some contraction of real estate, so the forecast of China’s growth before Russia’s invasion had already softened substantially for 2022,” he said.
“Then the waves of Covid caused lockdowns which further reduced growth expectations for China,” he added.
Also on Wednesday, China’s premier Li Keqiang said the world’s second largest economy had been hit harder by the latest round of lockdowns than it had been at the start of the pandemic in 2020.
He also called for more action by officials to restart factories after lockdowns.
“Progress is not satisfactory,” Mr Li said. “Some provinces are reporting that only 30% of businesses have reopened… the ratio must be raised to 80% within a short period of time.”
Full or partial lockdowns were imposed in dozens of Chinese cities in March and April, including a long shutdown of Shanghai.
The measures have led to a sharp slowdown in economic activity across the country.
In recent weeks, official figures have shown that large parts of economy have been impacted, from manufacturers to retailers.
Source: bbc
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
