Top Stories
Factbox-Government measures to ease inflation pain
Global Banking & Finance Review®
Company
(Reuters) – Pandemic-related disruption to global supply chains and the knock-on effects of Russia’s war in Ukraine have combined to drive up prices of energy, commodities and basic necessities.
(Reuters) – Pandemic-related disruption to global supply chains and the knock-on effects of Russia’s war in Ukraine have combined to drive up prices of energy, commodities and basic necessities.
Below is a list of some of the actions taken by governments aimed at offering relief to hard-hit consumers and companies:
AMERICAS:
* The United States will help millions of indebted former students by cancelling $10,000 of their outstanding student loans. The move follows the $430 billion “Inflation Reduction Act” unveiled last month, which includes cuts to prescription drug prices and tax credits to encourage energy efficiency.
* Brazil’s oil giant Petrobras on Sept. 1 announced a 7% cut in refinery gate gasoline prices, its fourth consecutive gasoline price reduction since mid-July. The government in July cut fuel taxes and raised social welfare payments.
* Chile in July announced a $1.2 billion aid plan including labour subsidies and one-time payments of $120 for 7.5 million of its 19 million residents.
EUROPE:
* Germany will spend at least 65 billion euros on a new package shielding consumers and businesses from inflation. The plan includes a windfall tax, benefit hikes and extending subsidies on public transport. Berlin had already announced its planned gas price levy on consumers from Oct. 1, while in July, it agreed a 15-billion euro ($15.05 billion) state bailout of Uniper, the country’s largest importer of Russian gas.
* Spain will cut value-added tax (VAT) on gas to 5% from 21% from October to help households with utility bills. The government also reduced VAT on electricity twice over the past year to 5%.
* Finland and Sweden will offer billions of dollars in liquidity guarantees to power companies in their respective countries. Sweden’s government in August said it expected to have 90 billion Swedish crowns available to help consumers with record electricity prices.
* Italy is preparing a fresh multi-billion euro package to help shield firms and families from inflation. The bill would come on top of around 52 billion euros which Rome has already budgeted this year to soften the impact of sky-high electricity, gas and petrol prices.
* Denmark in August capped annual rent increases at 4% for the next two years. The move follows earlier relief measures, including a 3.1 billion Danish crown ($418.34 million) package announced in June.
* France’s parliament on Aug. 3 adopted a 20 billion euro relief bill, lifting pensions and some welfare payments, while also allowing companies to pay higher bonuses tax free. In late August, the government said it did not rule out a windfall tax on companies.
* Poland approved a new package, which includes subsidies for heating plants whose price increases will not exceed 40%, and a 13.7 billion zloty ($2.91 billion) cash transfer for municipalities to help residents with soaring energy bills. The country had also in July introduced a relief scheme for holders of local currency mortgages.
ASIA:
* Japan’s average minimum wage is set for a record 3.3% increase for the year ending March 2023. The government is also due to refrain from raising the price of imported wheat it sells to retailers, as part of a planned broader relief package. The steps follow a $103 billion bill passed in April.
* Indonesia will reallocate 24.17 trillion rupiah ($1.63 billion)of its fuel subsidy budget towards welfare spending, including cash handouts to 20.65 million households. The government will also instruct regional administrations to subsidise transport fares.
* India in May imposed restrictions on exports of food items including wheat and sugar, which account for nearly 40% of the consumer price index, and cut taxes on imports of edible oil.
* Malaysia is expected to spend a record 77.3 billion ringgit ($17.25 billion) in subsidies and cash aid this year to temper the effects of rising prices.
AFRICA AND MIDDLE EAST:
* South Africa in late July announced a cut in the pump prices of fuels.
* Saudi Arabia and the United Arab Emirates in early July raised their social welfare spending. The UAE doubled financial support to low-income Emirati families, while Saudi Arabia’s King Salman ordered the allocation of 20 billion riyals ($5.33 billion).
* Turkey in early July increased its minimum wage by about 30%, adding to the 50% rise seen at the end of last year.
($1 = 14,840.0000 rupiah)
($1 = 7.4103 Danish crowns)
($1 = 4.7145 zlotys)
($1 = 3.7552 riyals)
($1 = 0.9965 euros)
($1 = 4.4820 ringgit)
(Compiled by Olivier Sorgho, Leika Kihara, Manoj Kumar, Ina Kreutz and Agnieszka Gosciak; Editing by Alison Williams and Hugh Lawson)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or the Producer Price Index (PPI).
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by the rise in Gross Domestic Product (GDP).
Consumer protection refers to laws and regulations designed to ensure the rights of consumers are upheld, preventing businesses from engaging in unfair practices and ensuring product safety.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly, often leading to a loss of confidence and economic instability.
Explore more articles in the Top Stories category
