LUSAKA, April 11 (Reuters) - Zambia will resume construction of a power line linking it to East Africa, creating one of the largest energy markets in the world, a senior World Bank official said on Friday. Work on the Zambia–Tanzania Interconnector Project is set to resume this month, with estimated completion in 2028, Achim Fock, country manager for Zambia at the World Bank, said on Friday during a signing ceremony. Sign up here. The $320 million project to connect Zambia and Tanzania's power supplies is being financed by the World Bank, the European Union and Britain. The cost of the remaining work is $298 million, of which a World Bank grant will cover $245 million, Acting Finance Minister Chipoka Mulenga said, at the same event. The project was first floated more than a decade ago but has been stalled for various reasons, most recently due to COVID-19 as well as concerns over Zambia's debt default in late 2020. Zambia struck a deal with bondholders last year and is seen as a test case for a debt rework under the Common Framework, a G20 platform to bring together big creditors like China and the group of established creditor nations known as the Paris Club. Fock said an integrated market connecting the Southern and East African power pools would help lower electricity costs and increase energy security, and create new opportunities for trade and investment in the power sector across Africa. https://www.reuters.com/world/africa/zambia-resume-work-power-line-link-tanzania-world-bank-official-says-2025-04-11/

Trump's tariffs set to inflate prices of German imports U.S. is Germany's biggest trading partner Tariffs risk prolonging Germany's economic recession BERLIN, April 11 (Reuters) - In the Barbie movie, the iconic doll faces a pivotal decision: opt for her trademark but impractical sky-high stilettos or embrace the down-to-earth comfort of the quintessentially German Birkenstock sandal? Now, however, Barbie may have another consideration: price. Sign up here. U.S. President Donald Trump's sweeping tariffs are poised to inflate the prices U.S. shoppers pay for many German products - from Birkenstock (BIRK.N) , opens new tab sandals to Paulaner beer and Riesling wine. Trump's tariff offensive is testing relations between the two allies, threatening their two-way trade and risking major damage to an already limping German economy. And for German companies, it will test whether U.S. consumers - long willing to pay more for the renowned quality of the country's goods - can stomach even higher prices at a time when U.S. policies threaten to spark a recession. "Both European producers and U.S. consumers will suffer," said Rodger Wegner, president of the Association of Exporting Breweries, which represents German beer brands including Karlsberg, Lowenbrau and Radeberger. Germany, like most of the world, is now subject to a 10% tariff on its exports to the United States. But a 20% rate is still looming despite a 90-day pause. The duties could not come at a worse time for Europe's biggest economy, with economists predicting the trade turmoil could put it on track for a third year of recession for the first time in its history. The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($277.84 billion). 'A BITTER PILL' Birkenstock, like many other companies, may pass the cost onto consumers through price hikes, though it declined to say whether it planned to when asked by Reuters. However, even with higher prices, the brand could still have an advantage as consumers prioritise spending on comfort and quality, said Jessica Ramirez, co-founder of the retail consultancy The Consumer Collective. A weekly survey by industry association Footwear Distributors and Retailers of America found shoe sales since Trump's inauguration were down 9.5% from the same period last year. Birkenstock, however, said it has not seen any noticeable change in demand. It produces 95% of its shoes at its own factories in Germany and said its vertical integration makes it less exposed to tariffs than peers. The company said it was pushing ahead with expansion in the U.S. - a crucial market - despite the current turmoil, with plans to open up to five more of its own new stores there by the end of September, for a total of 15. "We're not going to alter our highly targeted retail expansion plans due to short-term disruptions," a spokesperson said. Whether that strategy pays off will likely come down to consumers like Clay White. The software engineer from North Carolina bought his first Birkenstocks in 2011 and is now on his third pair, but a severe price spike would make him think twice about buying another. "If they're going to be ... say over $200, then I would probably try and find a used pair," White told Reuters. "Or maybe I would purchase them in Europe." Birkenstock's bestselling Arizona leather sandals retail for between $130 and $350. German brewers are in a similar dilemma. The U.S. is the third-biggest market for German beer outside the EU. But production costs have risen sharply in recent years, the Association of Exporting Breweries' Wegner said, and U.S. beer drinkers would inevitably have to shoulder the tariff burden. The U.S. is also the biggest export market for German wines, with the sector earning around 63 million euros there, about a sixth of total export sales, data from the German Wine Association showed. For Dr. Loosen, a winery in the Mosel region known for Riesling, which exports a third of its production to the U.S., the financial implications of Trump's tariffs appear unavoidable. "It will be a bitter pill to swallow," said Thomas Loosen, the company's co-manager. ($1 = 0.9106 euros) https://www.reuters.com/business/retail-consumer/german-birkenstocks-beer-riesling-wine-caught-us-tariff-crosshairs-2025-04-11/

BUDAPEST, April 11 (Reuters) - Hungary's parliament will hold a confirmation hearing of former government debt agency leader Zoltan Kurali for central bank Deputy Governor next Tuesday, the agenda of the meeting showed on Friday. Prime Minister Viktor Orban's former finance minister, Mihaly Varga, took over as Governor last month amid strengthening risks to Hungary's economic growth and inflation outlook ahead of a 2026 parliamentary election. Sign up here. The National Bank of Hungary left its benchmark interest rate steady at the European Union's joint-highest level of 6.5% at Varga's first policy meeting last month and ruled out rate cuts for the foreseeable future as inflation rebounds. Earlier this week the bank said U.S. President Donald Trump's tariffs could lop 0.5 to 0.6 percentage points off Hungary's growth, denting recovery prospects after two years of near-stagnation amid an inflation surge to the EU's highest levels. An economist, Kurali had worked at several commercial and investment banks, including Citi and Deutsche Bank, where he held various management and senior investment banking positions before taking over at government debt agency AKK in 2019. Central bank Deputy Governor Mihaly Patai's six-year term is due to expire later this month, while Csaba Kandracs's six-year mandate as Deputy Governor expires in October. Kurali's confirmation is expected to be a formality given Orban's commanding majority in parliament. If appointed, Kurali could attend his first policy meeting on April 29. After leaving its base rate steady in a unanimous decision last month, the central bank raised its 2025 inflation forecast to between 4.5% and 5.1% and said tariff hikes and buoyant services and food prices posed upside risks to that projection. https://www.reuters.com/world/europe/former-debt-agency-leader-kurali-tapped-hungary-central-bank-deputy-governor-2025-04-11/

ABU DHABI, April 11 (Reuters) - U.S. Energy Secretary Chris Wright said on Friday that the United States could stop its oil exports to Iran as part of President Donald Trump's plan to pressure Tehran over its nuclear programme. The January return to the White House of Trump, who in his first term withdrew the United States from a 2015 power accord with Tehran and clamped down on its oil exports, has again brought a tougher approach to the Middle Eastern power over its nuclear work. Sign up here. Wright, speaking to Reuters during a visit to Abu Dhabi, said he thought the Gulf allies of the United States were extremely concerned about a nuclear-powered Iran and shared the U.S. resolve that this is an outcome that is in no one's best interest. Iranian oil exports recovered under Joe Biden, who became president after Trump's first term, and so far in 2025 have yet to show a decline, according to industry data. China, which opposes unilateral sanctions, buys the bulk of Iran's shipments. "That's actually very doable. President Trump actually did it in the first term," Wright said when asked how the United States can enforce its maximum pressure policy on Tehran. "We can follow the ships leaving Iran. We know where they go. We can stop Iran's export of oil. "I’m not going to talk about the specific methodology of how that’s going to happen. But can we turn the screws on Iran 100%," he said when asked if the United States would stop Iranian ships at sea. Iran said on Friday that it was giving high-level nuclear talks with the United States on Saturday "a genuine chance" after Trump threatened bombing if discussions failed. Wright also predicted that there would be a positive outlook for oil demand and supply in the next few years under Trump's policies, and the concern of markets about economic growth will be proven wrong. https://www.reuters.com/business/energy/us-energy-secretary-says-we-can-stop-irans-oil-exports-2025-04-11/

BEIJING/MADRID, April 11 (Reuters) - China has signed two agricultural trade protocols with Spain covering pork and cherries as the world's second largest economy acts to bolster ties with the European Union amid an escalating trade war between Beijing and the U.S. The deal, announced Friday by Spanish Prime Minister Pedro Sanchez in Beijing, came after U.S. President Donald Trump hiked tariffs on Chinese imports to 145%, prompting China to raise its own duties on U.S. goods to 125%. Sign up here. "In a context of enormous international commercial turbulence, derived from the tariff crisis, we welcome with optimism and hope this new gesture from the Asian giant, which is opening up new options for the supply of pork products," said the National Association of Spanish Meat Industries (ANICE). The new deal includes pork stomach exports - a product widely consumed in China but not previously authorised, according to Daniel de Miguel, international manager of Interporc, Spain's pork producers association. Analysts regard the deal as a signal Beijing might ease its anti-dumping inquiry into EU pork , opens new tab, launched last year in retaliation for EU tariffs on Chinese electric vehicles. The investigation could badly impact countries like Spain, the Netherlands and Denmark because a large portion of the EU's pork shipments to China are pig ears, noses, feet and offal - products rarely consumed in Europe but popular in China. "This is great news for Spain's pig farmers," said Even Rogers Pay, agriculture analyst at Trivium China. "It suggests regulators may delay or ease the pork investigation, as they recently did with brandy." China has extended its investigation into EU brandy by three months and is in talks with the 27-nation EU to set minimum prices for Chinese EVs. "This is part of a pattern of Beijing seeking to stabilise and improve its trade relationships with multiple key trade partners, including the EU," Pay added. Trump's announcement on Wednesday of a 90-day tariff pause for dozens of countries prompted the EU to hold off on retaliatory levies on about 21 billion euros ($23.85 billion) of U.S. imports set to take effect on April 15. The bloc is still assessing how to respond to U.S. car tariffs and the broader 10% levies that remain in place. China imported $4.8 billion worth of pork, including offal, in 2024 - over half of it from the EU, with Spain leading the bloc in exports by volume. China's pork inquiry is due to conclude by June 17, but could be extended. ($1 = 0.8804 euros) https://www.reuters.com/markets/commodities/china-expands-access-spanish-pork-trade-tensions-with-us-mount-2025-04-11/

WARSAW, April 11 (Reuters) - Euro zone financial markets are functioning well despite global turbulence and the European Central Bank is ready to deploy its financial instruments to maintain financial stability if necessary, ECB President Christine Lagarde said on Friday. Markets have endured a brutal week, marked by the eruption of an all-out trade war and a bond market selloff that has ignited fears of a global recession and shaken confidence in U.S. assets. Sign up here. "In Europe and in the euro area in particular, we have observed that market infrastructures and... the bond market (are) functioning in an orderly fashion," Lagarde told a press conference in Warsaw. The dollar slid to multi-year lows against most currencies on Friday and Treasuries sold off as investors sought safer haven assets, bracing for even more volatility in U.S. assets. Lagarde said the ECB did not target any particular exchange rate but remained attentive to movements since they impact inflation and needed to be factored into economic models. The euro's trade-weighted exchange rate hit an all-time high this week, which is likely to lower inflation since these movements make imports cheaper but could also slow economic growth since exporting goods becomes more expensive. This is one of the key reasons why financial investors now think a rate cut by the ECB next week is essentially a done deal, to be followed by more easing later in the year. Lagarde said the ECB was always ready to act and had a solid track record in devising new instruments when required. "The European Central Bank is monitoring and is always ready to use the instruments that it has available, and has come up in the past with the adequate instruments and tools that were necessary in order to procure price stability, and of course financial stability, because one doesn't go without the other," Lagarde told the press conference. https://www.reuters.com/markets/europe/european-markets-functioning-well-ecb-attentive-fx-movements-lagarde-says-2025-04-11/

NEW DELHI, April 11 (Reuters) - India's industrial output (INIP=ECI) , opens new tab in February was its weakest since August 2024, hurt by slowing manufacturing and mining sector growth, government data released on Friday showed. Industrial output grew 2.9% year-on-year in February, missing the 4% growth expected by economists polled by Reuters. Industrial output declined 0.1% in August. Sign up here. The growth rate was revised to 5.2% in January, from the initial estimate of 5%. Manufacturing output advanced 2.9% in February, electricity generation grew 3.6% and mining activity rose 1.6%, data showed. These sectors had grown by a revised 5.8%, 2.4% and 4.4%, respectively, in the previous month. In the April-February period, industrial output increased by 4.1%. The deceleration was broad-based, with all the use-based categories and two of the three sectors barring electricity witnessing slower growth in February compared to the previous month, said ICRA economist Aditi Nayar. "While the growth performance of mining is expected to deteriorate in March 2025 relative to February 2025, this is likely to be offset by an uptick in electricity generation, amid steady manufacturing growth," she said. Industries globally are reeling under uncertainty over U.S. import tariffs, which could worsen the outlook for the manufacturing sector and weigh on economic growth. Earlier this week, India's central bank cut its growth forecast for the current year by 20 basis points to 6.5% but economists say growth could fall even further amid the global turmoil. https://www.reuters.com/world/india/indias-industrial-output-rises-29-yy-february-2025-04-11/

LONDON, April 11 (Reuters) - The European Central Bank meets on April 17 with all focus on what tariff chaos means for how much further policymakers will need to cut rates. U.S. President Donald Trump first announced reciprocal tariffs around the world, including 20% on the European Union, last week before suddenly dialling back those duties on Wednesday for a 90-day period, whipsawing financial markets. Sign up here. The resulting additional time to negotiate has barely relieved jittery markets and the outlook hasn't become any more certain. "It will be very interesting how they (the ECB) walk that fine line between acknowledging what needs to be acknowledged without putting too stressed a tone to it," said Morgan Stanley chief European economist Jens Eisenschmidt. Here are five key questions for markets: 1/ Will the ECB cut rates next Thursday? Most likely. Traders fully price a 25-basis-point cut, bringing the ECB's deposit rate to 2.25% next Thursday, a move they had seen as more of a coin toss before catching on that Trump's reciprocal tariffs were really on the way. Policymakers had previously looked more divided on an April cut, but several have since suggested that tariff developments have strengthened the case for a move. 2/ How will Trump's latest tariffs impact growth and inflation? Hard to say, given negotiations ahead. But even with the 90-day reprieve, the EU is still being hit by a broad 10% tariff, not to mention higher rates on steel, aluminium and cars, so they will certainly hurt growth. Before Trump's U-turn on Wednesday, ECB sources told Reuters a previous estimate of a 0.5-percentage-point hit to growth in the first year was too low and could even exceed 1 percentage point, which would wipe out all expected growth for 2025. The impact on inflation is more ambiguous and will depend on the degree of retaliation against Trump's tariffs and, longer term, on how fragmented global trade becomes. But for now, oil prices have tanked 15% this month, the euro is up over 9% since the start of March while China, the biggest source of EU imports, is taking the biggest hit from tariffs, all pointing to further disinflation. "There is an across-the-board downward revision to the growth forecast and also because the euro has been so strong, which helps dampen inflation, (the ECB) can in the short-term focus on growth," said Principal Asset Management chief global strategist Seema Shah. 3/ So will the ECB have to speed up rate cuts? Markets sure think so. Traders now expect the ECB to cut rates twice more this year after Thursday. That's quite a change, given they had seen less than a full chance of another move this year and priced in the chance of a 2026 hike when the bank last convened in March. But economists see a more modest path. The median expectation in a Reuters poll was for just one further cut, putting rates at 2% in the second half of the year. "The fundamental problem, that we are facing very high uncertainty as to what type of economic policy we can expect out of the U.S., that has not gone away," said Morgan Stanley's Eisenschmidt, a former ECB economist. 4/ Will German stimulus come to the rescue? Not yet. Germany's historic debt-rule overhaul to ramp up infrastructure and defence spending is seen as a game changer for the European economy, but it will take time to feed through. "The economic impact of German fiscal spending is a story for 2026, not 2025," said Simon Wells, HSBC's chief European economist. 5/ How concerned is the ECB about financial stability? Policymakers don't seem alarmed yet, but have stepped up their monitoring of banks and markets. Euro zone bonds have also swung, but been less volatile than U.S. Treasuries, while the gap in borrowing costs between poorer member states and Germany, Europe's largest economy, has not widened to worrying levels. But the ECB remains concerned that financial stress could spread from non-financial entities to regular lenders in periods of market stress. Hedge funds unwinding some debt-laden bets is thought to have played a role in recent volatility. "I expect them (the ECB) to say they are ready to act if volatility in the market is unjustified by the fundamentals," said Gregoire Pesques, fixed income chief investment officer at Europe's largest asset manager Amundi. Indeed, ECB chief Christine Lagarde said on Friday the bank is ready to deploy its instruments to maintain financial stability and has a solid track record in devising new tools when required. (This story has been refiled to remove the extraneous word ‘market’ in paragraph 23) https://www.reuters.com/markets/europe/all-about-tariffs-five-questions-ecb-2025-04-11/

Countries back loosening targets to fill gas storage Changes affect 2026 and 2027, plus 2025 if approved fast enough Changes would let countries miss 90% filling goal by 10 percentage points EU countries, lawmakers will now negotiate final rules BRUSSELS, April 11 (Reuters) - European Union countries on Friday backed looser rules on filling gas storage ahead of winter, amid concerns that the bloc's current binding regime inflates gas prices. The EU's gas storage rules were introduced in 2022 to ensure EU countries had a buffer of stored fuel during winter, after Russia cut gas deliveries, sending Europe's gas prices soaring. Sign up here. Ambassadors from EU countries approved the planned changes in a meeting on Friday, the council of the EU said in a statement. The changes would let countries deviate by 10 percentage points from the EU's requirement to fill gas storage to 90% of capacity ahead of winter, if market conditions are unfavourable. The existing regime includes a binding commitment to fill storage to 90% capacity by November 1 this year. Countries agreed to keep this binding goal, but proposed amending its deadline to allow them to reach it at any time between October 1 and December 1. Countries must now negotiate the final rules with the European Parliament. Negotiations are due to begin in May. The changes will apply to EU filling targets for 2026 and 2027. They will also amend this year's November target if countries and lawmakers approve them before that date. Countries, including Germany, France and the Netherlands, have warned that the rules inflate gas prices by signalling to market participants when European buyers need to buy large volumes. The negotiating stance backed by EU member countries would also let them deviate by an extra five percentage points from the 90% target in certain circumstances - for example, if technical constraints mean a storage facility takes more than 115 days to fill. Countries also want to make voluntary the EU's binding intermediate filling targets for the months leading up to November. Industry group Eurogas urged policymakers to finalise the changes by July. The group said in a statement that uncertainty over the rules "creates additional challenges for market operators in making informed decisions regarding storage filling". Benchmark EU gas prices have tumbled since February, retreating to a near-nine-month low this week, in reaction to concerns of the economic fallout from U.S. President Donald Trump's trade war, as well as the push from EU countries to ease storage-filling targets. https://www.reuters.com/business/energy/eu-countries-agree-soften-gas-storage-rules-diplomats-say-2025-04-11/

LONDON, April 11(Reuters) - The pound fell versus the euro and rose versus the dollar on Friday, reflecting a sell-off in U.S. assets as traders flee to safe-haven currencies amid an escalating global trade war, while better-than-expected UK GDP figures barely moved the dial. At 1004 GMT, the pound was 1% higher versus the dollar at $1.30950, and 0.5% lower versus the euro at 0.8675. Sign up here. Heavy dollar selling has seen the greenback plunge versus a range of currencies, as investors' confidence in the world's largest economy flags. Safe-haven currencies such as the Swiss franc and euro are meanwhile at multi-year highs as traders dump U.S. assets. "The story with sterling it is more sensitive to risk sentiment than the euro ... and it's less liquid than the euro, in general it makes sense in these conditions to have euro/sterling move higher. When it comes to cable, it is just a dollar story," Francesco Pesole, FX strategist at ING, said. Earlier on Friday, official figures showed Britain's economy returned to growth in February with its fastest expansion in 11 months, beating economists' expectations. The pound barely moved on the news as attention remained squarely on tariff-related developments, with China slapping additional tariffs on the U.S. on Friday morning in a further escalation of the trade war. One additional factor weighing on sterling is the gilt market, Pesole said. "At a moment where bond market instability is driving outflows from the U.S. dollar in the U.S., markets are looking at bond market instability in the UK," he said. Thirty-year gilt yields plunged 16.8 bps on Thursday - their biggest daily drop in over two years - but on Friday resumed the upward climb seen since Trump's tariffs roiled markets. https://www.reuters.com/markets/currencies/sterling-falls-against-euro-rises-versus-dollar-traders-focus-trade-war-2025-04-11/