<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107389217-1710835109118-gettyimages-1832684732-ETHIOPIA_ECO.jpeg" alt="" class="wp-image-467962" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107389217-1710835109118-gettyimages-1832684732-ETHIOPIA_ECO.jpeg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107389217-1710835109118-gettyimages-1832684732-ETHIOPIA_ECO-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107389217-1710835109118-gettyimages-1832684732-ETHIOPIA_ECO-160x90.jpeg 160w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">ADDIS ABABA, Ethiopia &#8211; Dec. 7, 2023: A branch of the Commercial Bank of Ethiopia in Addis Ababa. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



Ethiopia’s largest bank is struggling to recoup millions of dollars after a glitch over the weekend allowed customers to withdraw unlimited funds, according to local media reports.



More than $40 million was reportedly withdrawn from the state-owned Commercial Bank of Ethiopia or transferred to other banks, as customers discovered they could withdraw more than their total balance. Transactions were halted several hours later.



The bank’s President Abie Sano told a press conference on Monday that a large portion of the cash was withdrawn by students, with the BBC reporting that long lines formed at campus ATMs.



Several universities have urged students to return cash that isn’t theirs, and Sano reportedly told Monday’s press conference that anybody who returns the money will not be criminally prosecuted.



In a post on X, the CBE confirmed the service interruption but denied that it was the result of a cyber attack. It added that its ATM services were now “fully operational,” according to a Google translation.



Ethiopia’s central bank, which oversees its financial sector, said in a statement that the interruption was a result of system security checks and “not an incident that endangers the bank, its customers and the entire financial system,” according to a Google translation.



CNBC has contacted the CBE for comment.

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‘Glitch’ at Ethiopia’s biggest bank sees customers withdraw millions that isn’t theirs

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-820x547.jpeg" alt="" class="wp-image-467930" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107386016-1710228393384-gettyimages-1434261548-banderajaponyyen9-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An editorial montage of the Japan flag and Japanese yen cash bank notes Javier Ghersi | Moment | Getty Images</figcaption></figure>



Japan’s central bank raised interest rates on Tuesday for the first time since 2007, ending the world’s only negative rates regime and other unconventional policy easing measures enacted over the course of the last few decades to combat deflation.



These changes mark a historic shift and represent the sharpest pull back in one of the most aggressive monetary easing exercises in the world, which was aimed at reflating prices in the Japanese economy. The BOJ’s actions also precede the U.S. Federal Reserve’s interest rate decision later this week.



“The likelihood of inflation stably achieving our target has been heightening &#8230; the likelihood reached a certain threshold that resulted in today’s decision,” BOJ Governor Kazuo Ueda said at a press conference after the central bank’s decision, according to a translation provided by Reuters.



The Bank of Japan though cautioned it’s not about to embark on aggressive rate hikes, saying that it “anticipates that accommodative financial conditions will be maintained for the time being,” given the fragile growth in the world’s fourth-largest economy.



“If the likelihood heightens further and trend inflation accelerates a bit more, that will lead to a further increase in short-term rates,” Ueda said. He added though there is still “some distance for inflation expectations to reach 2%.”



The BOJ raised its short-term interest rates to around 0% to 0.1% from -0.1% at the end of its two-day March policy meeting. Japan’s negative rates regime had been in place since 2016.



It also abolished its radical yield curve control policy for Japanese sovereign bonds, which the central bank has employed to target longer-term interest rates by buying and selling bonds as necessary.



The central bank though will continue purchasing government bonds worth “broadly the same amount” as before — currently about 6 trillion yen per month.



It would resort to “nimble responses” in the form of increased JGB purchases and fixed-rate purchases of JGBs, among other things, if there is a rapid rise in long-term interest rates.



Scaling back its asset purchases and quantitative easing, the BOJ said it would stop buying exchange-traded funds and Japan real estate investment trusts (J-REITS). It also pledged to slowly reduce its purchases of commercial paper and corporate bonds, with the aim of stopping this practice in about a year.



“As for the future, we will at some point eye shrinking our balance sheet given we’ve ended our extraordinary monetary easing. But we can’t specify now when that will happen,” Ueda told reporters.



He described the BOJ’s JGB and ETF holdings as “remnants of the extraordinary monetary easing scheme,” while deferring questions on the impact of the central banks’ unorthodox policies until an ongoing review is completed.



<h2 class="wp-block-heading" id="h-yen-weakens-yields-slip"><a></a>Yen weakens, yields slip</h2>



The yen weakened sharply to beyond 150 to the dollar — a level that’s previously prompted intervention from Japanese authorities.



Yields on the 10-year Japanese government bonds slipped, while the Nikkei stock index ended slightly up in a volatile session after the rate decision and ahead of a public holiday in Japan.



“As always, I won’t comment on short-term currency moves,” Ueda said at the press conference. “But if currency moves have a big impact on our economic and price forecasts, we will stand ready to take an appropriate monetary policy response.”



Financial markets had repositioned over the past week as local Japanese news reports and preliminary wage negotiation results fanned speculation that the BOJ could normalize rates a month earlier, ahead of its April meeting.



Ongoing “shunto” spring wage negotiations between Japan Inc and its unionized workers have so far yielded a weighted average 3.7% spike in base pay, Rengo, Japan’s largest federation of trade unions said Friday in its first provisional update.



This is even more robust than last year’s gains, which were the steepest spike in three decades.



<h2 class="wp-block-heading"><a></a>Inflation target</h2>



The BOJ had barely budged from its&nbsp;ultra-loose monetary policy&nbsp;posture despite “core core inflation” — which excludes food and energy prices — exceeding its 2% target for more than a year, as policymakers viewed price increases were largely imported.



BOJ Governor Kazuo Ueda had repeatedly said the outcome of this year’s annual “shunto” wage negotiations would be key to sustainable price increases. The Bank of Japan expects higher salaries to lead to a virtuous spiral with domestic demand fueling inflation.



“Services prices have continued to increase moderately, partly due to the moderate wage increases seen thus far,” the BOJ said in a statement.



“As these recent data and anecdotal information have gradually shown that the virtuous cycle between wages and prices has become more solid, the Bank judged it came in sight that the prices stability target would be achieved in a sustainable and stable manner toward the end of the projection period of the January 2024 outlook report,” it added.



<h2 class="wp-block-heading"><a></a>Uncertain outlook</h2>



With inflation slowing and an economy that barely averted a technical recession toward the end of last year, Ueda flagged some possible headwinds.



“There are numerous risks surrounding the global economy such as the chance of a negative market shock. There’s also the risk that consumption may not recover as much as expected,” he said.



High inflation has crimped domestic demand and private consumption. Private consumption fell 0.3% in the fourth quarter from the previous one — more than the provisional estimates of a 0.2% decline.



“If our price forecast clearly overshoots or, even if our median forecast is unchanged, we see a clear increase in upside risk to the price outlook, that will likely lead to a policy change,” Ueda said.



Investors and market watchers may have to wait for the BOJ to update its economic forecast at its April meeting, where the central bank is expected to release its 2026 forecast.



“Japan’s expectation of inflation, when looking at a timespan of 5 to 10 years, is likely somewhere around 1-1.5% &#8230; At present, real interest rate is likely deeply in negative territory. Unless the neutral, real rate of interest is very deeply in negative territory, we can say&nbsp;Japan’s monetary condition is accommodative,” he said.

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Bank of Japan ends the world’s only negative rates regime in a historic move, abandons yield curve control

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-820x547.jpeg" alt="" class="wp-image-467884" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Amin Nasser, CEO of Saudi Aramco, speaks at the 2024 CERAWeek by S&amp;P Global conference in Houston, Texas, on March 18, 2024. F. Carter Smith | Bloomberg | Getty Images</figcaption></figure>



HOUSTON — Saudi Aramco CEO Amin Nasser said Monday that the energy transition is failing and policymakers should abandon the “fantasy” of phasing out oil and gas, as demand for fossil fuels is expected to continue to grow in the coming years.



“In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities,” Nasser said during a panel interview at the CERAWeek by S&amp;P Global energy conference in Houston, Texas.



“A transition strategy reset is urgently needed and my proposal is this: We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately reflecting realistic demand assumptions,” the CEO said to applause from the audience.



The Paris-based International Energy Agency forecast last year that peak oil, gas and coal demand would come in 2030. Nasser said demand is unlikely to peak anytime soon, let alone by that year. Nasser suggested that the IEA is focusing on demand in the U.S. and Europe and needs to focus on the developing world as well.



Nasser said alternative energy sources have been unable to displace hydrocarbons at scale, despite the world investing more than $9.5 trillion over the past two decades. Wind and solar currently supply less than 4% of the world’s energy, while total electric vehicle penetration is less than 3%, he said.



Meanwhile, the share of hydrocarbons in the global energy mix has barely fallen in the 21st century from 83% to 80%, Nasser said. Global demand has increased by 100 million barrels of oil equivalent per day during the same period and will reach an all-time high this year, the CEO said.



Gas has grown 70% since the start of the century, Nasser said. The transition from coal to gas is responsible for two-thirds of the reductions in carbon emissions in the U.S., he said.



“This is hardly the future picture some have been painting,” Nasser said. “Even they are starting to acknowledge the importance of oil and gas security.”



Developing nations in the global south, meanwhile, will drive oil and gas demand as prosperity rises in those nations, which represent more than 85% of the world’s population, the CEO said. These nations receive less than 5% of the investment targeting renewable energy, he said.



Nasser said the world should focus more on reducing emissions from oil and gas in addition to renewables. The CEO said efficiency improvements alone over the past 15 years have reduced global energy demand by almost 90 million barrels per day oil equivalent. Wind and solar, meanwhile, have substituted only 15 million barrels over the same period, he said.



“We should phase in new energy sources and technologies when they are genuinely ready, economically competitive and with the right infrastructure,” Nasser said.

107388760-1710772295032-gettyimages-2087312988-CERAWEEK_2024

Saudi Aramco CEO says energy transition is failing, world should abandon ‘fantasy’ of phasing out oil

Inside the shadowy world of organized retail crime

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-820x547.jpeg" alt="" class="wp-image-467638" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An eagle tops the U.S. Federal Reserve building’s facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/ Jonathan Ernst | Reuters</figcaption></figure>



The Federal Reserve and the European Central Bank look poised to make “major progress” in cutting interest rates this year, according to the central bank of central banks.



Agustín Carstens, general manager of the Bank for International Settlements, told CNBC on Monday that major central banks had so far made “very impressive advances” in lowering inflation and suggested that they could soon shift toward a looser monetary policy stance.



“If everything goes fine, I think that, certainly this year, we will see major progress, especially toward the second part of the year,” Carstens told Annette Weisbach.



BIS serves as a bank and forum for national central banks, and as such has close understanding of their monetary policies. It holds no sway over policymakers’ decision-making.



Carstens warned that the “last mile” on the path of disinflation was likely to prove the trickiest.



“We have done the tightening, but the effect on the rest of the economy is still going. The uncertainty is how much impact will that be,” he said.



“Central bankers have to be very observant about the path of disinflation, and they have to keep going until the job is fully done.”



Investors are closely watching the future course for interest rates, with expectations of a shift toward looser monetary policy already bringing some relief to markets after months of interest rate hikes designed to dampen persistently high inflation.



During its March meeting, the ECB held interest rates steady, but hinted at a June rate cut as it trimmed its annual inflation forecast. ECB chief economist Philip Lane sought to temper those expectations last week, telling CNBC that any decision would depend on the latest economic data.



The Fed and the Bank of England are expected to shine future light on their plans for interest rates during their monetary policy meetings this week.



Higher-than-expected U.S. inflation data released on Thursday prompted some economists to curb predictions for a swathe of 2023 cuts. JP Morgan and Goldman Sachs said they now see the Fed reducing rates three times this year from June onwards.



The BoE is also expected to lower rates starting from June, according to analysts, with Goldman Sachs forecasting as many as five 25 basis point cuts.



The Bank of Japan is meanwhile predicted to lift interest rates on Tuesday, according to a Reuters poll, marking a major turn in its nearly two-decade-long cycle of negative interest rates.

107366350-17066268512024-01-30t110014z_2101305001_rc2as5axkmg4_rtrmadp_0_usa-fed-balance-sheet

Fed and other banks to make ‘major progress’ on rates this year, BIS chief says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-820x461.jpeg" alt="" class="wp-image-467547" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A view of the UAE city of Al Ain during a cloud-seeding mission on January 31, 2024 in Al Ain, United Arab Emirates.  Andrea Dicenzo | Getty Images News | Getty Images</figcaption></figure>



Rising global temperatures have added a strain on regions like the Middle East, which is extremely vulnerable to the impacts of climate change.



These nations are now faced with a big problem, how can they solve their water shortage issues?&nbsp;



The United Arab Emirates averages less than 200 millimeters of rainfall a year, in stark contrast to London’s average of 1,051 millimeters and Singapore’s 3,012 millimeters.



In the UAE, temperatures can reach as high as 50 degrees Celsius (122° Fahrenheit) during the Summer, where 80% of the country’s landscape is covered with desert terrain.&nbsp;



Extreme heat could exacerbate water scarcity issues and impose restraints on agricultural productivity in the country.&nbsp;



The United Nations projects that by 2025, 1.8 billion people will face absolute water scarcity across the world. The Middle East stood out as one of the most water-stressed areas with around 83% of the population in the region prone to experiencing high levels of water stress. 



With water scarcity at the core of the region’s challenges, the Gulf state implemented a program aimed at addressing this issue.&nbsp;



<h2 class="wp-block-heading" id="h-introduction-of-cloud-seeding"><a></a>Introduction of cloud seeding</h2>



In the 1990s, the UAE introduced a rain enhancement methodology called cloud seeding. Cloud seeding is the process of increasing the amount of rain produced from the clouds above, which is designed to improve water shortage issues in arid regions around the emirate. 



By the early 2000s, Sheikh Mansour Bin Zayed Al Nahyan, the vice president of the UAE, allocated up to $20 million for research into cloud seeding. The UAE partnered with the National Center for Atmospheric Research in Colorado and NASA to set up the methodology for the cloud seeding program.



The government introduced a task force called The National Center of Meteorology (NCM) in Abu Dhabi where more than 1,000 hours of cloud seeding is performed each year to enhance rainfall.&nbsp;



The NCM has a weather radar network and more than 60 weather stations where it manages seeding operations in the country and closely monitors atmospheric conditions.



<h2 class="wp-block-heading"><a></a>How it works</h2>



Weather forecasters at the center can observe precipitation patterns in clouds and identify suitable clouds to seed, with the aim of increasing the rate of rainfall.



Once they spot the right cloud, they instruct pilots to take to the air with their specialized aircrafts loaded with hygroscopic flares on the plane’s wings. 



Each flare contains about 1 kilogram of salt material components and can take up to three minutes to burn and shoot into the right clouds. After the seeding agent is introduced into the cloud, the droplets increase in size, surpassing the cloud’s capacity to sustain them against gravity, resulting in their release as raindrops.



<h2 class="wp-block-heading"><a></a>Seeding agents</h2>



Skeptics have long argued that governments who have introduced weather modification techniques to their skies are “playing God.”



During a visit to the NCM, General Director Abdulla Al Mandous told CNBC that the technology is “based on scientific background.”



Al Mandous added that Abu Dhabi’s program does not use silver iodide, a common crystal-like material used as a seeding agent in other countries. This material has been widely criticized for potential harmful effects on the environment and the public, however, some cloud seeding studies show there has been no substantial evidence to prove that at current levels it poses any toxic effects. 



The NCM said it does not use any harmful chemicals in its operations. “Our specialized aircrafts only use natural salts, and no harmful chemicals,” the organization told CNBC.



Al Mandous said the center started manufacturing its own seeding agent called nano material, a fine salt coated with titanium oxide, which is more effective than what it uses currently.&nbsp;



“It will give us three times more effective results than the hygroscopic flares,” he said.



The nano material is presently undergoing trials and experimentation in various atmospheres, both in the UAE and the U.S.

107388104-1710510554127-gettyimages-1967839257-776099513_uae_dicenzo_cloudseeding_17

United Arab Emirates is using cloud seeding tech to make it rain

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8-820x462.jpeg" alt="" class="wp-image-467543" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Around 970 million registered voters are expected to cast their votes for India’s next prime minister. Sajjad Hussain | Afp | Getty Images</figcaption></figure>



India will hold the world’s largest general elections starting April this year with nearly a billion voters set to exercise their franchise.



The seven-stage election process will start from April 19 and last till June 1, 2024, according to the schedule announced by the Election Commission of India. The country has about 970 million registered voters.



India’s Prime Minister Narendra Modi’s Bharatiya Janata Party is projected to win more than the required 272 seats to form a government, according to several opinion polls.



Experts also forecast that the BJP is set to win a third straight term.&nbsp;



“Given the economic growth momentum in the domestic economy created by a Modi-led government and an increased image of India on a global stage, many are confident that Modi will win again,” Kranthi Bathini, equity strategist at WealthMills Securities told CNBC.&nbsp;



Opposition parties have often alleged that electronic voting machines can be “hacked,” benefiting the ruling BJP, a claim refuted by the country’s election body.



In December, Modi’s party was accused by opposition members of orchestrating a power grab after 141 lawmakers were suspended for disrupting parliamentary proceedings.



Chief Election Commissioner Rajiv Kumar appealed to voters in a press conference on Saturday to “maintain decorum when campaigning and refrain from abuses and personal attacks.” 



Since Modi won a second term in the 2019 general election, India has seen the economy strengthen, with Indian equity benchmarks hitting record highs. The Nifty 50 and BSE Sensex have both hit all-time highs this year after the country overtook Hong Kong in December to become the world’s seventh largest stock market.



International Monetary Fund executive director Krishnamurthy Subramanian said earlier in March that India is “easily” the fastest-growing economy and is poised for 8% growth this year.



Warming relations with the U.S. after Modi’s state visit to the White House in June has also boosted India’s appeal as investment destination, with several firms keen to expand their manufacturing presence in the South-Asian nation as they diversify away from China.

107388489-1710720164910-gettyimages-2057346478-AFP_34KV6K8

India to hold the world’s biggest election starting April in over a month-long exercise

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-820x547.jpeg" alt="" class="wp-image-467526" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107388485-1710716931527-gettyimages-2079406255-cfoto-realesta240315_npjH7-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">High-rise residential and commercial buildings are being constructed near Dongyu Road, Qiantan, in the Pudong New Area of Shanghai, China, on March 15, 2024.  Nurphoto | Nurphoto | Getty Images</figcaption></figure>



BEIJING — &nbsp;China’s economic data for the first two months of the year beat analysts’ expectations across the board on Monday.



Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters poll, while industrial production climbed 7%, compared with estimates of 5% growth.



Fixed asset investment rose by 4.2%, more than the 3.2% estimated by analysts.



The unemployment rate in February for cities came in at 5.3%.



Online retail sales of physical goods rose 14.4% from a year earlier during the first two months of the year.



Investment into real estate fell 9% in the first two months of the year from a year ago. Investment in infrastructure rose by 6.3% while those in manufacturing increased by 9.4% during that time.



“We believe China’s sequential growth momentum remained solid in Q1 despite notable divergence across sectors,” Goldman Sachs analysts said in a report Monday following the data release.



“However, to secure the ambitious “around 5%” growth target this year, more policy easing is still necessary, especially on the demand-side (e.g., fiscal, housing and consumption).”



Despite the upbeat results, National Bureau of Statistics Spokesperson Liu Aihua cautioned that domestic demand remains insufficient.



She told reporters that real estate remains in a period of “adjustment,” and that the overall economy is “in a critical period of recovery, transformation and upgrading,” according to a CNBC translation of her comments in Mandarin.



When asked about the unemployment rate for people aged 16 to 24, Liu said the figures would be released a few days after the monthly press conference on economic data.



<h2 class="wp-block-heading" id="h-holiday-boost"><a></a>Holiday boost</h2>



Economic figures for January and February are typically combined in China to smooth out variations from the Lunar New Year, which can fall in either month depending on the calendar year. It is the country’s biggest national holiday, in which factories and businesses remain closed for at least a week.



This year, the number of domestic tourist trips and revenue during the holiday grew compared with last year as well as pre-pandemic figures from 2019. But Nomura’s Chief China Economist Ting Lu pointed out that “average tourism spending per trip was still 9.5% below pre-pandemic levels in 2019.”



Retail sales did not rebound from the pandemic as strongly as many had expected as consumers have grown uncertain about their future income.



“Consumers were buoyed temporarily by festivities-related spending at this start of the year. In the absence of decisive consumption-related stimulus this year, we think it would be difficult to sustain a robust consumer spending pace this year,” Oxford Economics’ Chief Economist Louise Loo said in a report on Monday.



<h2 class="wp-block-heading" id="h-lackluster-demand"><a></a>Lackluster demand</h2>



New loans in February missed expectations and fell from the prior month, “even after adjusting for seasonality,” Goldman Sachs analysts said in a report on Friday.



“The persistent weakness in property transactions and low consumer sentiment may continue to weigh on household borrowing,” the analysts said. “More monetary policy easing is needed.”



People’s Bank of China Governor Pan Gongsheng said earlier this month there was still room to cut the reserve requirement ratio, or the amount of cash banks need to have on hand.



Goldman expects 25 basis point cuts to that ratio in the second quarter of this year, as well as in the fourth quarter.



Real estate, which accounts for a significant part of household assets, has slumped over the last few years after Beijing’s crackdown on developers’ high reliance on debt for growth.



The average property price for 70 major Chinese cities fell by 4.5% in February from January on a seasonally adjusted, annualized basis, according to Goldman Sachs’ analysis using a weighted average of official figures.



That’s steeper than the 3.5% month-on-month drop in property prices in January, Goldman Sachs said.



“Our high frequency tracker suggests that 30-city new home transaction volume declined by 53.2% [year-on-year] in early March after adjusting to the lunar calendar basis,” the analysts said in a report.



<h2 class="wp-block-heading" id="h-focus-on-manufacturing"><a></a>Focus on manufacturing</h2>



Chinese authorities did not reveal significant new support for the massive real estate sector during an annual parliamentary meeting that ended last week.



Instead, Beijing emphasized the country’s focus on developing manufacturing and technological capabilities.



When asked Monday about overcapacity concerns, Liu said that China’s manufacturing capacity utilization rate was 76% in the fourth quarter, a 0.2 percentage point increase from a year earlier.



She described efforts to increase the level of high-end manufacturing a “strategic decision for achieving high-quality development,” while noting that efforts are needed to prevent inefficient and ineffective investments in the sector.



Data earlier this month showed China’s exports for January and February rose by 7.1% in U.S. dollar terms, beating expectations for a 1.9% increase.



Imports climbed by 3.5% during that time, also topping Reuters’ forecast for growth of 1.5%.

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The European Central Bank must take its time to get interest rate cuts right and will have a clearer picture of inflationary pressures in June, the institution’s chief economist told CNBC.



“A lot of evidence is accumulating, but what’s also fair to say is that the transition from this holding phase, we’ve been on hold since last September since a substantial hiking cycle, we do have to take our time to get that right, from holding to dialing back restrictions,” Philip Lane told CNBC’s Steve Sedgwick on Thursday.



Lane, a Governing Council member, said the euro zone central bank’s March meeting had been an “important milestone” in the accumulation of evidence, and showed the “disinflation process has been ongoing.” During the meeting, the ECB held rates and released updated macroeconomic projections, which lowered its inflation forecast for this year to 2.3% from 2.7%.



Inflation in the 20-nation bloc eased to 2.6% in February.



In line with the ECB’s March messaging, Lane said that more data was required, particularly around wages, and that the Governing Council would “learn a lot by April, a lot more by June” — the dates of its next two meetings.



In a press conference following the March meeting, ECB President Christine Lagarde said market pricing on the timing of rate cuts — which indicate a start in June as of Thursday — “seems to be converging better” with the central bank’s view.



June emerged as a key date in market commentary, as it’s set to mark the first meeting where the ECB can assess spring data on wage negotiations for the year.



Asked about other colleagues on the ECB’s Governing Council who have suggested rate cuts could take place before the summer, Lane said he believed this was a reference to the second quarter, which would include June.



“I think Q2 is a time when we will be far enough into 2024 to see more of the wage dynamic, to see more of the price pressures.”



He stressed that it was important, in his own role, to “avoid trying to provide calendar guidance to the market.”



“Once we are sufficiently confident that we will get back to target in a sustainable manner, in a timely manner, that’s the right time to move to the next phase,” he said.



<h2 class="wp-block-heading" id="h-room-for-profits-to-come-down"><a></a>Room for profits to come down</h2>



Policymakers have repeatedly stressed that many of the causes of the inflationary cycle have subsided, such as the energy price spike and supply chain issues. But they remain concerned about domestic inflationary pressures from corporate profits and wage rises.



Bank of England Governor Andrew Bailey caused controversy in 2022 for suggesting workers should not ask for a pay rise in order to avoid stoking inflation.



Lane said Thursday that, while the ECB’s forecast relied on some moderation in wage growth, it was “important” for people’s inflation-adjusted salaries to improve, and that companies should shoulder lower profits to allow this to happen.



“Wages were not the source of this inflation problem. But in terms of making sure we get back to target, the interplay between wages and profits, our forecast is built on a degree of wage deceleration,” he said.



“It’s important to say, we need to see workers’ real incomes improve, to rebuild, not just this year, [but] the year after. So we allow for higher to normal wage increases.”



Lane added, “But we also need to see, essentially, firms absorbing a fair amount of that in lower profits. Profits were quite high in 2022, there is some room for profits to come down. And that is part of the open questions we have.”

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The European Union’s parliament on Wednesday approved the world’s first major set of regulatory ground rules to govern the mediatized artificial intelligence at the forefront of tech investment.



The EU brokered provisional political consensus&nbsp;<a href="https://www.europarl.europa.eu/news/en/press-room/20231206IPR15699/artificial-intelligence-act-deal-on-comprehensive-rules-for-trustworthy-ai" target="_blank" rel="noreferrer noopener">in early December</a>, and it was then endorsed in the Parliament’s Wednesday session, with 523 votes in favour, 46 against and 49 votes not cast.



“Europe is NOW a global standard-setter in AI,” Thierry Breton, the European Commissioner for internal market, wrote on X.



President of the European Parliament, Roberta Metsola, described the act as trail-blazing, saying it would enable innovation, while safeguarding fundamental rights.



“Artificial intelligence is already very much part of our daily lives. Now, it will be part of our legislation too,” she wrote in a social media post.



Dragos Tudorache, a lawmaker who oversaw EU negotiations of the agreement, hailed the agreement, but noted that the biggest hurdle remains implementation.



Born in 2021, the EU AI Act divides the technology into categories of risk, ranging from “unacceptable” — which would see the technology banned — to high, medium and low hazard.



The regulation is expected to enter into force at the end of the legislature in May, after passing final checks and receiving endorsement from the European Council. Implementation will then be staggered from 2025 onwards.



Some EU countries have previously advocated self-regulation over government-led curbs, amid concerns that stifling regulation could set hurdles in Europe’s progress to compete with Chinese and American companies in the tech sector. Detractors have included Germany and France, which house some of Europe’s promising AI startups.



The EU has been scrambling to keep pace with the consumer impact of tech developments and the market supremacy of key players.



Last week, the Union brought into force landmark competition legislation set to rein in U.S. giants. Under the Digital Markets Act, the EU can crack down on anti-competitive practices from major tech companies and force them to open out their services in sectors where their dominant position has stifled smaller players and choked freedom of choice for users. Six firms — U.S. titans Alphabet, Amazon, Apple, Meta, Microsoft and China’s Bytedance — have been put on notice as so-called “gatekeepers.”



Concerns have been mounting over the potential for abuse of artificial intelligence, even as heavyweight players like Microsoft, Amazon, Google and chipmaker Nvidia beat the drum for AI investment.



Governments fear the possibility of deepfakes — forms of artificial intelligence that generate false events, including photos and videos — being deployed in the lead-up to a swathe of key global elections this year.



Some AI backers are already self-regulating to avoid disinformation. On Tuesday, Google announced it will limit the type of election-related queries that can be asked of its Gemini chatbot, saying it has already implemented the changes in the U.S. and in India.



“The AI Act has pushed the development of AI in a direction where humans are in control of the technology, and where the technology will help us leverage new discoveries for economic growth, societal progress, and to unlock human potential,” Tudorache said on social media on March 12. 



“The AI Act is not the end of the journey, but, rather, the starting point for a new model of governance built around technology. We must now focus our political energy in turning it from the law in the books to the reality on the ground,” he added.&nbsp;



Legal professionals described the act as a major milestone for international AI regulation, noting that it could pave the path for other countries to follow suit.



“Once again, it’s the EU that has moved first, developing a very comprehensive set of regulations,” said Steven Farmer, partner and AI specialist at international law firm Pillsbury.



“The bloc moved early in the rush to regulate data, giving us the GDPR, which we are seeing a global convergence towards,” he continued, referring to the EU’s General Data Protection Regulation law. “The AI Act seems to be a case of history repeating itself.”



Mark Ferguson, public policy expert at Pinsent Masons, added that the passage of the act was just the beginning, and that businesses will need to work closely with lawmakers to understand how it will be implemented as the fast-moving technology continues to evolve.

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Investors could be caught off guard by the strength of an oil price rally this summer, according to Morgan Stanley’s Martijn Rats.



His comments came as oil prices rose on Wednesday amid fears of potential supply disruption after Ukrainian drone attacks on Russian refineries, and hopes that the Federal Reserve may soon start cutting interest rates which traditionally boosts demand.



International benchmark Brent crude futures for May delivery traded at $83.23 a barrel at 12:20 p.m. London time, up $1.3 for the session, while U.S. West Texas Intermediate (WTI) futures for April delivery stood at $78.95, roughly $1.37 higher.



Brent futures have largely been trading in a narrow $75 to $85 interval since the start of the year.



“They are quite benign. We’ve had a nice rally [in] December, January and first half of February but the last couple of weeks we’ve been fairly rangebound,” Rats told CNBC’s “Squawk Box Europe” on Wednesday.



“There is a view in the market that the non-OPEC producers can meet all of the demand growth this year and therefore there isn’t much incremental room for OPEC oil and that means you rely on continued OPEC cuts,” Rats said.



“Now, they are doing that, but people think that that dynamic for now puts a little bit of a cap on the price. We’ve had a good amount of spare capacity. I think the summer could be tighter than people expect but this is the dynamic that currently exists.”



Earlier this month, OPEC+ agreed to extend voluntary output reductions until the end of the second quarter in a bid to shore up the short-term stability of crude markets.



OPEC+ refers to a group of some of the world’s largest oil producers, including heavyweights such as Saudi Arabia and Russia.



<h2 class="wp-block-heading" id="h-really-elevated-prices"><a></a>‘Really elevated prices’</h2>



Asked why fuel supplies could be tighter in the summer, Rats said that the oil research community had been “quite cautious” about the outlook at the start of the year. However, a flurry of stronger-than-expected data had convinced many to upwardly revise oil demand forecasts.



“On the supply side, we’re seeing a slowdown in U.S. shale, we’ve seen a wobbly start in Brazil [and] we’ve seen a wobbly start in Canada. We expected inventories to build but year-to-date they are kind of flat. If in the first quarter, inventories [are] flat then they can draw possibly quite significantly during the summer period.”



Rats said there were plenty of indicators, such as physical differentials and refining margins, among others, that indicate the oil market has already tightened a bit more than the current spot price suggests.



“Now, at the moment we are going through oil refinery maintenance so [this] is always a bit of a soft part of the year but I think as the summer driving season unfolds, inventories draw … look, we’re not calling for the super cycle, but we could have a bit of strength in the summer.”



The summer driving season typically refers to the months between the U.S. Memorial Day and Labor Day holidays when people in the Northern Hemisphere tend to hit the roads.



Speaking to CNBC’s Dan Murphy in late January, Amrita Sen of Energy Aspects said geopolitical factors such as the Israel-Hamas war and tensions in the Red Sea could also push oil prices higher this summer.



Reflecting on attacks in the Red Sea, Sen said that naphtha (a hydrocarbon mixture) and jet fuel markets had been significantly impacted.



“This is the weak period for jet demand,” Sen said.



“Summer jet is ahead of us, and we think these attacks are going to go on for months so we could see some really elevated prices into the summer.”



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