The Lastest Macroeconomic News
24.11.2008 22:27 Unemployment in Russia grew by 1.7%, to 4.624 million people in October
Unemployment in Russia grew by 1.7%, to 4.624 million people in October, according to the state statistics service, Rosstat. However, the number of formally registered jobless people keeps declining. The Healthcare and Social Development Ministry, the Russian Union of Industrialists and Entrepreneurs and trade unions have agreed to meet weekly to exchange information and select struggling companies in non-financial sectors requiring urgent assistance. Until last week, official estimates said the liquidity crisis was not affecting the labor market. In early November, Deputy Healthcare Minister Maxim Topilin said with conviction that they were not expecting employment layoffs to be higher than statistical average. The reduced working week at industrial giants KamAZ, GAZ or MMK had been long planned according to him. However, the Independent Trade Unions Federation said business activity was plummeting in various sectors of the national economy, including metals, construction, engineering and the automobile industry, and that settlements were delayed under contracts including state orders (in the light industry and in radio electronics). As a result, companies resort to shortening working hours or cutting personnel. And yet, the number of people registered as unemployed keeps decreasing, to 1.245 million in October from 1.552 million at the beginning of this year.
20.11.2008 23:03 Russia`s industrial production grew 4.9 percent in January-October 2008
Industrial production grew 4.9 percent in January-October 2008 compared to the same period a year earlier, the Russian Federal State Statistics Service (Rosstat) reported. In October alone, output grew 0.6 percent, down from 2.8 percent during the previous month. As reported earlier, industrial production growth stood at 6.3 percent in September for a 12-month period from the same month in 2007, and 5.4 percent for the year to date in 2008, down from 6.6 percent for the same period of the previous year. The government earlier projected a full-year industrial output growth of 5.2 percent in 2008, based on data provided by the Economy Ministry. According to Rosstat, output rose 0.5 percent in the primary sector in January-October 2008, 7.1 percent in manufacturing, and 4.1 percent in electricity, gas, and water production and distribution. Meanwhile, oil production (with gas condensate) fell 0.6 percent to 406m tonnes, natural gas output increased 1.4 percent to 540bn cubic meters, and power generation went up 4.1 percent to 851bn kilowatt-hours.
18.11.2008 23:47 U.S. industrial production rebounded by 1.3 percent in October 2008
U.S. industrial production rebounded by a stronger-than-expected 1.3 percent in October after a downwardly revised September drop that was the biggest fall in more than 62 years, according to a government report that is likely to reinforce fears of a recession. The Federal Reserve on Monday attributed the October output rebound to a return to production of energy and chemical facilities shut down by Hurricanes Ike and Gustav in September. These storm-related effects added 2 percentage points to output in October, so without them, industrial production would have fallen by around 0.7 percent, according to the Fed. Compared with a year ago, October`s industrial output fell 4.1 percent. Economists polled by Reuters had expected October industrial output to rise 0.2 percent in October, following an initially reported 2.8 percent fall in September. But the Fed revised the September fall to 3.7 percent - making it the steepest drop since a 5.0 percent decline in February 1946 as World War II production ended. Meanwhile, total capacity utilization edged higher to 76.4 percent from a downwardly revised 75.5 percent in September. The 1.3 percent rebound in October output was the sharpest increase since a matching rise in October 1999. October`s manufacturing output rose 0.6 percent after a revised 3.7 percent fall in September, while October mining output rose 6.1 percent after an 8.5 percent fall in September. Utility output rose 0.4 percent in October after a 2.4 percent rise in September.
17.11.2008 21:38 Japan slides into recession for the first time since 2001
Japan`s economy slid into a recession for the first time since 2001, the government said Monday, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis. Government officials and economists warned that the world`s second-largest economy could contract further in coming months. Japan`s economy shrank at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction. The result was worse than expected. Economists surveyed by Kyodo News agency had predicted gross domestic product would gain an annualized 0.1 percent. Japan`s Economy Minister Kaoru Yosano said following the data`s release that "the economy is in a recessionary phase." But the worst may be yet to come, especially with dramatic declines in demand from consumers overseas for Japan`s autos and electronics gadgets. Hurt also by a strengthening yen, a growing number of exporters big and small are slashing their profit, sales and spending projections for the full fiscal year through March. Compared to the previous quarter, GDP shrank 0.1 percent, the Cabinet Office said. Business investment — a main driver of Japan`s six-year economic recovery since 2002 — dropped 1.7 percent from the previous quarter. At its last meeting, the Bank of Japan cut its key interest rate for the first time in more than seven years, lowering it to 0.3 percent, joining central banks around the world in trimming borrowing costs.
15.11.2008 11:53 The economy of the euro zone slipped into recession for the first time in the third quarter
The economy of the euro zone slipped into recession for the first time in the third quarter, the European Union`s statistics agency said, as the financial crisis continued to depress manufacturing activity and consumer demand. The economy in the 15 countries that use the euro shrank 0.2 percent in the third and second quarters from the quarter before, further stoking expectations that the European Central Bank will cut interest rates to try to limit the damage. The weakness in the third quarter was particularly marked in Germany and Italy, both of which have entered a recession with gross domestic product contractions of 0.5 percent from the previous quarter after a similar decline in the second period. France`s economy grew 0.1 percent. Spanish GDP also fell, by 0.2 percent, posting the first quarterly decline since 1993. Dutch GDP was flat, after also stagnating in the second quarter. Outside of euro countries, British growth was down 0.5 percent after a flat reading the previous quarter. "The euro zone is not immune to what`s going on in the world economy generally, and exporting nations, like Germany, are totally plugged into the fortunes of the world economy," said Neil Mackinnon, chief economist at ECU Group. "We`re in for a pretty severe economic slump." Compared with the quarter a year earlier, GDP grew 0.7 percent in the euro zone and 0.8 percent for the 27 countries of the European Union. But economists said that a further contraction in euro zone GDP this quarter seems virtually assured and that the downturn is likely to endure well into next year. The European Commission forecasts that the aggregate budget gap of the euro countries would rise to 1.8 percent of gross domestic product in 2009 from 1.3 percent seen this year and to 2.0 percent in 2010, unless policies change. They also supported the Commission`s estimate that euro zone economic growth would slow to a mere 0.1 percent next year from 1.2 percent expected in 2008 in the wake of the financial crisis. The economy of the euro zone is to shrink 0.1 percent in quarterly terms in the fourth quarter, it said, and warned that further worsening in financial markets could push the euro zone into outright recession.
11.11.2008 21:01 Japan`s economy is teetering on the edge of recession
Economists say Japan, the world`s second-biggest economy, is teetering on the edge of recession. Third-quarter gross domestic product figures are due out Nov. 17. Central bank Deputy Governor Hirohide Yamaguchi promised lawmakers that the Bank of Japan, which cut its benchmark rate to 0.3 percent from 0.5 percent on Oct. 31, will stay focused on downside risks to the economy. "It will take a significant time before conditions for Japan`s economic recovery fall into place," Yamaguchi told an upper house parliamentary committee. Japan`s trade surplus has all but evaporated in the past couple of months, as high prices of oil and other raw materials boosted the value of imports, while exports languished as the global economy weakened in the face of its worst crisis in decades. The current account surplus in September fell 49 percent from a year earlier to 1.5 trillion yen ($15 billion), the finance ministry said. Japan`s economy shrank at the fastest pace in seven years in the second quarter, and some economists think it may have contracted again in the July-September third quarter, which would meet the common definition of a recession. However, the median forecast in a Reuters poll on third-quarter GDP suggested the economy skirted a recession by growing 0.1 percent.
09.11.2008 13:24 Russia`s inflation at 0.9% in October, 11.6% in January-October
Russia`s inflation stood at 0.9 percent for October, and 11.6 percent for the year to November, according to the Federal State Statistics Service (Rosstat). For reference, Rosstat cited 2007 figures: 1.6 percent for October, and 9.3 percent for ten months. The base consumer price index which excludes changes in prices for products induced by seasonal or administrative factors ran up to 101.3 percent in October, and 111.5 percent for the year to November. Despite the general price rise, however, gasoline prices sank 1.5-2.5 percent depending on the grade. So far, the Russian authorities have stuck to their official inflation forecast of 11.8% for 2008 although the government and the Central Bank have conceded that consumer price growth is likely to hit 13% this year. Most analysts predict inflation to hit 13-14% in 2008. The Russian authorities are planning to adjust their 2008 inflation forecast in November, taking into account the need to shore up liquidity in the domestic financial market by injecting billions of U.S. dollars into the economy.
30.10.2008 23:01 U.S. GDP dropped to a seasonally adjusted 0.3 percent annual rate in the third quarter
The U.S. economy officially shrunk as the country`s gross domestic product in the third quarter turned negative on higher number of consumers cutting down on spending, according to a report. The latest report by the Commerce Department released Thursday showed that the U.S. gross domestic product dropped to a seasonally adjusted 0.3 percent annual rate in the third quarter, but remained within the estimated decline of 0.5 percent by the market analysts on Wall Street. Nonetheless the decline is the biggest drop in the GDP figure since during July through September of 2001, when the U.S. economy shrunk by 1.4 percent. The report added that it is a preliminary estimate of the third quarter. The economy mainly contracted due to negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software. Imports, which are a subtraction in the calculation of GDP, decreased. The positive contributions that prevented the economy from further declining include federal government spending, exports, private inventory investment, nonresidential structures, and state and local government spending. Some of the analysts said the data reflects that the economy is in recession as credit crisis further deepens with collapsing of larger firms like Lehman Brothers Holdings Inc. and consolidation of Washington Mutual Co. during the quarter. Excluding food and energy, core consumer inflation increased by 2.9 percent in the third quarter, compared to the second quarter rise of 2.2 percent, the report showed. The real consumer spending, which accounts for about 70 percent of the country`s total gross domestic product (GDP), moved down by 3.1 percent in the third quarter on an annual basis, after increasing by 1.2 percent in the second quarter. The consumer spending slipped to the lowest level since its steepest decline of 8.6 percent in the second quarter 1980. Real exports of goods and services increased by 5.9 percent, compared to its rise of 12.3 percent in the second quarter; while imports dropped 1.9 percent in the quarter from 7.3 percent drop in the prior quarter. Equipment and software dropped by 5.5 percent, compared with a decrease of 5.0 percent. Real residential fixed investment slipped by as much as 19.1 percent, compared with a decrease of 13.3 percent. Federal government consumption expenditures and gross investment surged by 13.8 percent in the third quarter, compared with an increase of 6.6 percent in the second quarter. National defense outlays increased 18.1 percent, compared with an increase of 7.3 percent in the previous quarter; while nondefense increased 4.8 percent, compared with an increase of 5.0 percent. The U.S. economy had increased by 2.8 percent pace in the second quarter of this year.
24.10.2008 22:30 The Central Bank said Russia`s GDP will grow 5.7-7.1 percent in 2009
Depending on the oil price, Russia`s GDP will grow 5.7-7.1 percent in 2009, the Russian Central Bank said. According to the bank`s report, foreign trade conditions for Russia are expected to deteriorate in 2009-2011, compared with the previous three-year period. This environment will restrict Russia`s economic growth and curb inflation. The slowing of growth in the production of goods and services, which began in 2008, will continue in 2009, in accordance with forecasts. "The slowing of growth in demand expected in 2009 in countries that are the leading importers of Russian goods, the slowing of growth in consumer prices in countries that are the leading suppliers of goods to Russia, and also the possibility of declines in the prices of raw materials in line with world market trends, will affect the Russian economy by restricting economic growth and curbing inflation," the Central Bank said. According to the International Monetary Fund, Russia`s GDP in 2009 will grow by 5.5 percent. Inflation in Russia in 2009 will remain high, at 12%, the IMF said. The IMF also said inflation in Russia in 2009 would be the highest in Europe except for Ukraine. Meanwhile, the Russian government and the Central Bank have set the task of cutting inflation to 7.0-8.5 percent in 2009, 5.5-7.0 percent in 2010 and 5.0-6.8 percent in 2011.
20.10.2008 20:38 Russia`s GDP growth in September 2008 was only 0.4 percent
The official said GDP growth in Russia from January to September 2008 was 7.7 percent, higher than the 7.6 percent growth for the same period last year. But Russia`s GDP growth in September 2008 was only 0.4 percent compared to 7.0 percent in August 2008. Russia`s economic growth may decelerate in the medium term compared to the forecast, said Deputy Economy Minister Andrei Klepach. He noted, however, that if most problems are solved now, there will be no sharp slowdown. As reported earlier, Russia`s GDP growth is expected to reach 7.8 percent in 2008, 6.7 percent in 2009, and 6.6 percent in 2010, according to the Economy Ministry`s current forecast. Meanwhile, The International Monetary Fund revised Russia`s 2008 GDP growth forecast from 7.1% to 7.0% and raised its inflation projection for the country from 13.8% to 14.0% amid the ongoing global financial crisis. "In Russia, the growth forecast for 2008 reflects a stronger-than-expected performance early in the year, rising terms-of-trade gains, and a longer-than-expected fiscal stimulus package. But growth is set to weaken appreciably, reflecting slowing world demand and tightening financial conditions," the IMF said in its latest World Economic Outlook. According to the IMF, GDP growth in Russia is expected to fall to 5.5% and inflation ease to 12% in 2009.
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