The Day at a Glance | Jul 18 2022

The Top

*Yellen calls for production chains to be reshaped.

*EU expects Ukraine and Russia to reach an agreement this week to clear grain exports to the rest of the world.

*IMF will “substantially” cut its growth estimates in its next revision.

*China`s government offers businesses credit to compensate for unpaid mortgages in the country.

*Russia increases intense attacks on Ukraine.

Economic environment

Production chains. In Janet Yellen`s participation in G-20 meetings, the United States Secretary of the Treasury called on US allies to strengthen trade relationships and amend any negative upheavals that production chains may have had after the pandemic. Yellen proposed building production chains between allies to reduce vulnerabilities regarding the supply of goods and to reduce inflation, something she called “friend-shoring”. The benefits would include decreasing risks through the diversification of production chains and having goods flow between allied countries. Yellen proposed reducing dependency on China and said that it is important to avoid countries like China from using their important positions as manufacturing centers, providers of raw materials and technology to affect the global economy and exert geopolitical pressures. In her participation in G-20, Yellen also called to back the idea of implementing a price ceiling on crude oil exported from Russia, something that Europe and the US has supported with the intention of decreasing Putin`s government`s oil revenues. However, several countries have opposed this arguing that they fear Russian retaliation.