By Ira Dugal

MUMBAI (Reuters) - On a hot summer afternoon, 23-year old Nizamudin Abdul Rahim Khan is playing cricket on a muddy, unpaved road in the Rafiq Nagar slum in India's financial capital, Mumbai.

Here, there is scant evidence of India's fast-growing economy. Bordering what was once Asia's largest garbage dumping ground, Rafiq Nagar and surrounding areas are home to an estimated 800,000 people, most living in tiny rooms across narrow, dark alleys.

The young men and women in the area struggle to find jobs or work, and they mostly dawdle the day away, said Naseem Jafar Ali, who works with an NGO in the area.

India's urban unemployment soared during the COVID-19 pandemic, reaching a high of 20.9% in the April-June 2020 quarter, while wages fell. While the unemployment rate has fallen since, fewer full-time jobs are available.

Economists say more and more job-seekers, especially the young, are looking for low-paid casual work or falling back on unreliable self-employment, even though the broader Indian economy is seen growing at a world-beating 6.5% in the financial year ending in March 2024.

India is overtaking China to become the world's most populous nation with over 1.4 billion people. Nearly 53% of them are under 30, its much-touted demographic dividend, but without jobs, tens of millions of young people are becoming a drag on the economy.

"Unemployment is only the tip of the iceberg. What remains hidden beneath is the serious crisis of underemployment and disguised unemployment," said Radhicka Kapoor, fellow at economic research agency ICRIER.

Khan for instance, offers himself as casual labour for home repairs or construction, earning just about 10,000 Indian rupees ($122) a month to help support his father and his four sisters. "If I get a permanent job, then there will be no problem," he says.

The risk for India is a vicious cycle for the economy. Falling employment and earnings undermine India’s chances to fuel the economic growth needed to create jobs for its young and growing population.

Economist Jayati Ghosh calls the country's demographic dividend "a ticking time-bomb."

"The fact that we have so many people who have been educated, have spent a lot of their own or family's money but are not being able to find the jobs they need, that's horrifying," she said.

"It's not just the question of potential loss to the economy...it is a lost generation."

SMALL BUSINESSES COLLAPSE

Unemployment is far more acute in India's cities, where the cost of living is high and there is no back-up in the form of a jobs guarantee programme which the government offers in rural areas. Still many in the army of rural unemployed flock to the cities to find jobs.

While urban unemployment was at 6.8% in the January-March quarter, the share of urban workers with full-time jobs has declined to 48.9% as of December 2022 from an already low 50.5% just before the start of the pandemic, government data shows.

This means that of the estimated urban workforce of about 150 million, only 73 million have full-time jobs.

For people in urban areas with full time jobs, average monthly wages, adjusted for inflation, stood at 17,507 rupees ($212) in the April-June 2022 quarter - the latest period for which government data is available.

This was a modest 1.2% higher than the October-December 2019 period, before the start of the pandemic.

But for the self-employed, incomes have fallen to 14,762 ($178.67) rupees in the April-June 2022 quarter, according to research by Ghosh and C.P. Chandrashekhar, both at the University of Massachusetts, Amherst. It was at 15,247 rupees in the October-December 2019 quarter.

"The big thing that has happened is the collapse of small businesses, which were the backbone of employment," said Ghosh.

Since the Indian government's decision to demonetise 86% of the country's currency in circulation in 2016, there have seen continuous attacks on the viability of small business, with the pandemic being the latest, she said.

Over 10,000 micro, small and medium enterprises shut in 2022-23 (April-March) alone, the government said in parliament in February. In the previous year, over 6,000 such units had shut. But the government did not specify whether any new enterprises were set up in those periods.

GRADUATE PAINTER

Many families in Khan's neighbourhood, typical of the urban sprawl in the city of 21 million, have been hit by job losses and lower incomes in recent years. Young workers are particularly vulnerable.

Arshad Ali Ansari, a 22-year-old student, said he saw his brother and sister lose their jobs soon after the start of the pandemic.

Sitting in a single-room with a kitchen attached, where his family of eight lives, Ansari said they survive on his 60-year old father's earnings of about 20,000 rupees a month.

His brother, who was a graduate and had worked in a bank, lost his job during the pandemic and had to join their father in painting houses.

"My brother had education, he had experience," Ansari said.

His sister, once a social worker, also lost her job and has given up hope of finding one.

India will need to create 70 million new jobs over the next ten years, wrote Pranjul Bhandari, chief India economist at HSBC, in a note earlier this month. But only 24 million will likely be created, leaving behind "46 million missing jobs."

"From that lens, a growth rate of 6.5% will solve a third of India’s jobs problem," Bhandari wrote.

(This story has been refiled to fix a typo in paragraph 2)

($ 1 = 82.62)

By Kevin Buckland

TOKYO (Reuters) - The dollar languished below the psychological 140 yen level on Wednesday after getting knocked back from a six-month high after Japanese officials met on Tuesday to discuss their currency.

The Australian dollar rode a rollercoaster after it jumped on heated local inflation data only to be dragged lower moments later by more signs of a slowdown in China, a major trading partner. The Chinese yuan slumped to a six-month low in offshore trading.

The Aussie was last down 0.15% at $0.6507, heading back toward last week's 6 1/2-month low of $0.6490. It sank as much as 0.38% at its lowest point, immediately after climbing as much as 0.33%.

"We have to remember that the Aussie is a pro-growth currency, strongly linked to the outlook for commodities, and we've seen commodities under pressure of late," said Rodrigo Catril, senior foreign-exchange strategist at National Australia Bank (OTC:NABZY).

"The lack of positive news coming from economic activity in China is exacerbating that view, and proving to be the dominant one," trumping increased likelihood for further Reserve Bank of Australia tightening "sooner rather than later" following a hotter-than-expected consumer price reading, he said.

The New Zealand dollar sank as much as 0.5% to a 6 1/2-month trough at $0.60125.

Against the Chinese yuan, the U.S. dollar climbed as much as 0.38% to 7.1171 for the first time since Nov. 30.

Meanwhile, the greenback was little changed at 139.82 yen following a 0.46% slide on Tuesday, when Japan's top currency diplomat said following a meeting of the country's finance ministry, central bank and financial watchdog that officials "will closely watch currency market moves and respond appropriately as needed."

The dollar had risen as high as 140.93 earlier that day for the first time since Nov. 23.

"The meeting was preemptive," said Bart Wakabayashi, general manager at State Street (NYSE:STT) in Tokyo.

"I think the real line in the sand is 150," added Wakabayashi, who expects diverging monetary policy outlooks in Japan and the United States to continue to push the currency pair higher.

"If we get above 145, we're going to see pretty much every Japanese official on the wires trying to talk it down, and if they don't like what they see, they're going to act," he said, referring to the risk of currency intervention.

Elsewhere, the euro slipped 0.22% to $1.0711, giving back part of Tuesday's 0.28% advance.

Sterling retreated 0.14% to $1.2395, following a 0.44% gain the previous day.

By David Shepardson

WASHINGTON (Reuters) - The U.S. government is closely scrutinizing exports to China and last year denied or took no action on a quarter of requests in order to stop sales that would advance Beijing's militarization, a senior official said in testimony released on Tuesday.

In 2022, 5,064 export and re-export license applications were reviewed and about 26% were denied or returned without action, Commerce Department assistant secretary Thea Rozman Kendler said in written testimony for a Senate Banking Committee hearing on Wednesday.

"We identify sensitive U.S. technologies that would give our adversaries an advantage, develop policies and strategies for protecting these technologies, and review license applications submitted by exporters," Kendler's testimony said.

Nearly 700 Chinese parties are subject to the government's export controls on what is known as the "Entity List," Assistant Secretary of Commerce for Export Enforcement Matthew Axelrod said in written testimony. More than 200 have been added since the beginning of the Biden administration, he said.

"We leverage our administrative and criminal enforcement, as well as our regulatory authority, to address the diversion of advanced technologies – like semiconductors, marine engines, and satellite and rocket prototypes – that support China’s military modernization efforts," Axelrod's testimony said.

The goal is to counter China's "military modernization, human rights abuses, and other activities contrary to our national security and foreign policy interests," he said.

The hearing is titled "Countering China: Advancing U.S. National Security, Economic Security, and Foreign Policy".

The administration's plans to restrict certain U.S. outbound investments in specific sensitive technologies are still under discussion, said testimony from Treasury Department official Paul Rosen.

"Our desire is to avoid situations in which U.S. investments support and advance technologies that enhance military or intelligence capabilities in countries of concern that could undermine our national security and put Americans at risk," his testimony said.

Commerce Secretary Gina Raimondo said in March the Biden administration was considering a pilot program to address risks about investment in China.

"There are a lot of U.S. pension funds invested in China and people's retirement money. You certainly don't want do anything that has an unintended consequence," Raimondo said. "You don't want to be overly broad."

SYDNEY (Reuters) - The head of Australia's central bank on Wednesday pledged to do whatever is necessary to bring inflation back to target, warning that risks to inflation are on the upside and households should brace for the pain ahead.

Appearing before lawmakers, Reserve Bank of Australia Governor Philip Lowe said inflation expectations were well anchored for now, but that cannot be taken for granted and entrenched inflation would lead to higher interest rates and unemployment.

The RBA has projected headline inflation to return to the top of the bank's target of 2%-3% by mid-2025, a slower path than many other economies as Lowe wants to preserve strong gains in the labour market.

"Mid-2025 is pressing the length of time we can reasonably take, because if we take longer than that, people may reasonably say: 'Are you serious about the inflation target?' I want to reassure you we're serious," said Lowe.

"The risk to inflation is to the upside and we need to be attentive to that."

Services price inflation could remain elevated due to high unit labour costs if productivity growth failed to pick up, warned Lowe, adding that there are also uncertainties about the slowdown in household spending and the global economy.

The RBA has already raised interest rates by a whopping 375 basis points since May last year to an 11-year high of 3.85%. It has warned that more rate rises may be required to bring inflation back to target.

Lowe said success in the inflation fight is not guaranteed, and "it's going to be painful for a while yet" for Australian households.

"We won't be declaring victory until victory is achieved."

Markets see the RBA holding rates steady next month, but there is a sizeable chance of another quarter-point hike in August or September, and rates are expected stay elevated for the rest of the year.

Economic data over the past month has been on the soft side. Retail sales were flat in April as consumers cut back spending on food and dining out, while quarterly gains in wages missed forecasts and a red-hot labour market showed signs of cooling.

MEXICO CITY (Reuters) - Mexico will in 15 days launch a public tender for the construction of 10 industrial parks at a planned business corridor on an isthmus in the south of the country, President Andres Manuel Lopez Obrador said on Monday.

Auto makers, tech companies and semiconductor producers could be among investors in the parks, Economy Minister Raquel Buenrostro said this month, noting officials were pitching the project to companies from the U.S., Canada, Taiwan and Germany.

Lopez Obrador said last week the government is willing to provide subsidies and grant tax cuts to companies that set up operations in the so-called Inter-Oceanic Corridor.

The project is taking shape along the stretch connecting the Pacific port of Salina Cruz in Oaxaca state with the Gulf coast hub of Coatzacoalcos in Veracruz state. It ultimately aims to compete with the Panama Canal as a channel to move goods.

By Steven Scheer

JERUSALEM (Reuters) - Israel's competition watchdog sought more data on Sunday from the country's banks relating to an investigation, saying they were enjoying huge profits from higher interest rates on loans but weren't adequately sharing the benefits with customers.

The investigation, which began in 2022, wasn't made public prior to Sunday.

In a bid to rein in inflation, the Bank of Israel last week raised its benchmark interest rate by another 25 basis points to a 2006 high of 4.75%, its 10th straight hike of the key rate that stood at 0.1% last April.

"The fight against the cost of living tops our government's list of national priorities," Prime Minister Benjamin Netanyahu told a cabinet meeting on Sunday, adding he would set up and head a ministerial panel on the matter. 

Mortgage and loan payments, often tied to both inflation and the central bank's rate, have in turn jumped. This has caused anger among the public even as it has meant record profits for banks and sizeable dividends for their shareholders.

The top five banks earned a combined profit of 6.3 billion shekels ($1.7 billion) in the first quarter.

Banks have been slow to pass on the benefits of higher rates to customer deposits, the Competition Authority said.

Israel's aggressive policy-tightening cycle has sparked anger among its citizens as mortgage, loan payments and the cost of living have soared, with inflation staying around 5%.

The Competition Authority, formerly the anti-trust authority, said it had launched the investigation in 2022 when interest rates were starting to rise, and based on preliminarily results, it asked banks last week to provide more data. It declined to provide details on any possible disciplinary action.

Israel's banking regulator has downplayed the issue. Yair Avidan, the supervisor of banks, last week told reporters that 82% of the rate hikes have been passed on to customers. Still, he said many customers were not aware they could open interest-bearing accounts, and urged banks to educate their customers.

Last week, Economy Minister Nir Barkat asked Competition Authority head Michal Cohen to step down, saying she was a main cause of higher prices in the economy since the authority had not confronted monopolies enough. Cohen has refused to resign.

Barkat said that the authority "must carry out this investigation intensively, quickly and efficiently, because until it is completed, the public will lose."

($1 = 3.6280 shekels)

By Steve Holland

WASHINGTON (Reuters) - When Kevin McCarthy was struggling early this year to get enough votes from his own Republicans to become Speaker of the House of Representatives, Democratic President Joe Biden called the prolonged saga a national embarrassment, then had a little fun.

"I've got good news for you," Biden said, pointing playfully at a reporter after a speech in Kentucky. "They just elected you speaker."

During months of tense exchanges over the U.S. debt ceiling, McCarthy has also taken some swipes at Biden. Arguing that Biden should meet him to discuss his demands for lifting the debt ceiling in March, McCarthy made fun of the 80-year-old president's advanced age.

"I would bring lunch to the White House. I would make it soft food if that's what he wants. It doesn't matter. Whatever it takes to meet,” McCarthy told reporters.

In the last few weeks, however, both men have stopped the put-downs and cobbled together an agreement that will now lead to a congressional vote to suspend the U.S. debt ceiling and avoid a default that would wreak economic havoc on the country.

Like the deal they crafted, the relationship the two men forged does not look pretty but appears to have gotten the job done.

"I think he negotiated with me in good faith," Biden said of McCarthy on Sunday. "He kept his word. He said what he would do. He did what he said he would do."

The deal caps federal spending and forces more poor people to work for food aid, concessions that Democrats hate. But it also preserves much of Biden's Inflation Reduction Act and punts the next debt ceiling showdown into 2025, which Republicans hate.

STRANGE POLITICAL BEDFELLOWS

Biden, a veteran former senator from Delaware, talks about the days when both parties would often come together to solve pressing problems, and he has pushed his fellow Democrats to find across-the-aisle agreements as part of his larger attempts to re-center the country.

Although he initially called for the debt ceiling to be raised without negotiations, he ended up making compromises.

McCarthy, a 58-year-old Californian, is representative of a pugilistic style of Republican politics that took root with the "Tea Party" and blossomed under former President Donald Trump.

He came up through the party ranks pushing tax cuts for companies and reduced government spending and is now presiding over an unruly Republican Party in which radical lawmakers have threatened to force him out of the Speaker job unless he takes a hard line with the White House.

After an initial Feb. 1 meeting at the White House, an optimistic McCarthy predicted that he and Biden would find common ground and meet again soon.

Instead, a three-month stand-off ensued.

Biden refused to negotiate as the White House bet that investors and business groups would persuade Republicans to back off their threat to drive the United States into default.

Both McCarthy and Biden spent that time accusing the other of putting the U.S. economy at risk. McCarthy complained of his own isolation from the White House.

"I never had somebody from the White House reach out to me. Not one person from the administration called me. I called them," the House speaker told reporters at a Republican retreat in March.

Even after negotiations finally began in earnest, McCarthy portrayed the president as the captive of "socialists" intent on default.

"He'd rather be the first president in history to default on the debt than to risk upsetting the radical socialists who are calling the shots for Democrats right now," McCarthy tweeted last week.

But his tone changed as both sides moved toward a deal last week, expressing his respect for White House negotiators: "These are highly intelligent, highly respected on both sides. They know their work, they know their job, they know the numbers."

House Republican Patrick McHenry, a key negotiator in the talks, noted that Biden and McCarthy were "two Irish guys that don't drink" but had found a way to work together.

"What I saw in the Oval Office yesterday was a willingness to engage with each other in a sincere way - air disagreements, listen," McHenry said after one of the meetings last week.

Biden aides say the relationship between Biden and McCarthy is largely cordial and businesslike and that Biden recognizes the Speaker has a struggle on his hand presiding over the various factions within the Republican Party.

TRUMP, PELOSI CONNECTIONS

It may not help their relationship that both men were very close to the other's predecessor.

Biden idolized former Democratic House Speaker Nancy Pelosi, a woman "who I think will be considered the greatest Speaker in the history of this country," he said at his Feb. 7 State of the Union address.

McCarthy was an enthusiastic supporter of Biden's predecessor, Republican Donald Trump, and a frequent flyer on Air Force One when Trump was president.

He was among 147 Republicans who voted to overturn Biden's 2020 election win over Trump's claims of election fraud, although he eventually acknowledged Biden as the legitimate president.

He criticized Trump over his failure to rein in his own supporters during the Jan. 6, 2021, attack on the U.S. Capitol, but remains in touch with him.

By Nicoco Chan and Ellen Zhang

SHANGHAI/BEIJING (Reuters) - Wang Chunxiang pushes a cart around busy areas of Shanghai, playing cat and mouse with the authorities as she tries to sell pastries. The jobs she could get do not pay enough for her to make ends meet.

"Salaries are too low," said the 43-year-old, after serving a customer steamed sweet rice cakes from a wok.

"At my age, without much knowledge, I could only earn 5,000 to 6,000 yuan ($868) per month as a cleaning lady. Shanghai rent is so expensive. Even low quality homes are 2,000-3,000 yuan," said Wang, who recently resumed hawking after a six-year break.

She can earn about 10,000 yuan in a good month selling pastries for 15 yuan a box.

As life in China returns to normal after the pandemic, hawkers are hitting the streets. They look to at least supplement their income amid an uneven economic recovery in which jobs and wage growth has been sluggish.

For decades, street stalls and hawkers - common elsewhere in Asia - have been banned or tightly regulated in many Chinese cities, with authorities seeing them as unsightly.

There are signs, however, that local governments are giving hawkers more leeway, a trend expected to continue.

Zibo in eastern China became a media sensation this month after a rush of tourists visiting street food stalls forced authorities to issue warnings about overcrowding.

The tech hub of Shenzhen, which banned hawking in 1999, will ease restrictions on street stalls from September. Shanghai is seeking public opinion on revising hawker regulations and in April said it had set up 74 spots for vendors.

Lanzhou in the northwest said this month it would designate areas for street stalls as it sought to encourage innovation and entrepreneurship.

"It's natural for some local governments to trial street vending as they are facing great pressure in stabilising local economies and the job market," said Bruce Pang, chief economist at Jones Lang Lasalle (NYSE:JLL).

Household income grew 3.8% year-on-year in the first quarter, lagging broader economic growth. The job market remains sluggish with youth unemployment at a record high.

Economic pressure is forcing hawkers to risk fines or having their products confiscated.

Wang Xuexue, 28, who sells flowers off her scooter in Shanghai, prefers to hawk her goods away from designated areas, which she says are out-of-the-way and charge fees.

"Of course authorities try to catch us. Otherwise we wouldn't run so fast," said Wang Xuexue, who worked in a flower shop until recently.

Even in Beijing, which President Xi Jinping said should remain above all a "political centre" without a street economy, hawkers were seen at tourist spots.

Lu Wei, a pen seller, had his own store before the pandemic but cancelled the lease in 2020 as sales dropped and he could no longer afford rent. He now touts his 30-yuan pens along Beijing's Houhai lake, although business is slow.

"People have no money in their pockets. Even if they do, they don't want to spend it," Lu said.

($1 = 6.9121 Chinese yuan)

NAIROBI (Reuters) - Kenya will sign a trade pact with Russia aimed at boosting cooperation between businesses, President William Ruto's office said on Monday, after hosting Russian Foreign Minister Sergei Lavrov in Nairobi.

Russia has stepped up its drive to boost economic ties with Africa to help offset a big chill in relations with the West prompted by its invasion of Ukraine, and plans to hold an Africa-Russia summit in St Petersburg in July.

Kenya's presidency said in a statement that bilateral trade with Russia was still low despite the potential and the pact would give business the "necessary impetus".

It did not say when the pact might be sealed or give details on what it might encompass. Russia currently sells mostly grain and fertilisers to Kenya.

On Ukraine, the statement reiterated Kenya's support for respecting the territorial integrity of all countries, adding:

"Kenya calls for a resolution of the conflict in a manner respectful to the two parties."

Russia says its invasion of Ukraine, launched on Feb. 24, 2022, is aimed at protecting its own security against Ukraine's pro-Western leadership.

Kyiv and its Western allies accuse Moscow of waging an unprovoked war of aggression. Western nations have slapped sweeping economic sanctions on Russia, prompting it to forge closer ties with China, India, African nations and others.

Lavrov has visited the African continent at least three times this year, while Ukraine's foreign minister Dmytro Kuleba travelled to countries including Ethiopia, Rwanda and Mozambique last week.

Kenya's presidency said Lavrov was on his way to Cape Town for a June 1 meeting of foreign ministers of the BRICS group of emerging economies, which comprises Brazil, Russia, India, China and South Africa.

By Liangping Gao and Ryan Woo

BEIJING (Reuters) - China's new home prices will see a slower growth this year, according to a Reuters poll, suggesting pent-up demand after the country's economic reopening is fading though a slew of stimulus policies boosted confidence.

New home prices are expected to rise 1.4% year-on-year in 2023, slowing from a gain of 2.5% forecast for that period in a February survey, according to a Reuters poll conducted in May.

A string of stimulus policies to the crisis-hit property sector and the lifting of COVID-19 restrictions in December have boosted sentiment in recent weeks.

The revival, however, seems to be uncertain after the pent-up demand was released on top of the patchy economic recovery. Property investment and sales fell sharply in April, and the pace of home price gains slowed during the month.

"Residents' confidence in their incomes and expectations of house prices declines, as well as homebuyers' concerns about the presold homes unable to deliver, remain key factors impacting homebuyers to enter the market," said analyst Huang Yu at China Index Academy.

Property sales are expected to rise 2.7% from a year earlier for the whole of 2023, reversing a fall of 1.5% expected in the last poll, the survey showed.

A homeowner's failure to sell a flat in Beijing after dropping the asking price by 900,000 yuan in one month has created a buzz on social media on Friday.

"Homeowners need to sell at a lower price than the market if they want to sell their homes quickly in Beijing," said a property agent surnamed Lu, and she raised doubts on the sector's recovery in the coming months.

"China's property market has not yet stabilized and is still in a slow recovery from the bottom. The central and local governments are still releasing policies to support property market," said Wang Xingping at Fitch Bohua.

Property investment by developers is expected to fall 4.2% on year for 2023.

"In 2023, the property investment will mainly be driven by completion construction, and the decline in land purchase and new construction is expected to continue due to weak sales. We expect the decline in property investment for 2023 to narrow to around zero," said Wang.

"China property is set for another year of softening," said S&P Global (NYSE:SPGI) Ratings on Sunday，adding "weaknesses in China's tier-three and tier-four cities will keep the property recovery on an 'L-shaped' path. "

(For other stories from the Reuters quarterly housing market polls:)

($1 = 6.9121 Chinese yuan renminbi)