The Lastest Macroeconomic News
22.09.2017 12:45 The global economy is starting to create lose-lose situations
Next month, when finance ministers and central bank governors from more than 180 countries gather in Washington, D.C., for the annual meetings of the International Monetary Fund and the World Bank, they will confront a global economic order under increasing strain. Having failed to deliver the inclusive economic prosperity of which it is capable, that order is subject to growing doubts - and mounting challenges. Barring a course correction, the risks that today`s order will yield to a world economic non-order will only intensify. The current international economic order, spearheaded by the United States and its allies in the wake of World War II, is underpinned by multilateral institutions, including the IMF and the World Bank. These institutions were designed to crystallize member countries` obligations, and they embodied a set of best economic-policy practices that evolved into what became known as the “Washington Consensus.” That consensus was rooted in an economic paradigm that aimed to promote win-win interactions among countries, emphasizing trade liberalization, relatively unrestricted cross-border capital flows, free-market pricing, and domestic deregulation. All of this stood in stark contrast to what developed behind the Iron Curtain and in China over the first half of the postwar period.
19.09.2017 18:31 Inventions That Transformed The Global Economy
Last week, Apple Inc. launched its newest iPhones. And while the historical significance of these new Apple products may be debatable, the first iPhone, which came out a decade ago, is undoubtedly one of the most important tech innovations of all time. The first-generation iPhone is one of the seminal technologies featured in journalist and economist Tim Harford`s book "Fifty Inventions That Shaped the Modern Economy." "I`m always looking for interesting ways to describe the economy that determines how we live, how we work, what we get to do, the choices we have. It`s all around us," said Harford. Here are some of the inventions featured in his book: The iPhone, The Gramophone, Google Search, Video Games, The Billy Bookcase.
17.09.2017 13:50 Russia cuts interest rate for 4th time this year
Russia`s central bank has cut its key interest rate to 8.5 percent, the fourth reductions this year as inflation hits a record low. The bank said it took the decision to slice 50 points off the rate after "inflation expectations resumed their decline". In a statement, the Russian bank said it would "continue to conduct a moderately tight monetary policy" in order to maintain inflation close to 4%. But it also said that "during the next two quarters, the Bank of Russia deems it possible to cut the key rate further." The central bank is still struggling to breathe life into the Russian economy as it slowly emerges from the longest recession of President Vladimir Putin`s rule on the bank of low oil prices and Western sanctions over Ukraine. The bank dramatically increased its interest rates following the crash of the ruble in late 2014 and has been gradually chipping away at the key rate since then in bid to bolster the economy. After three consecutive cuts, the bank chose to not to lower them further during its last meeting in July due to a worries over inflation. But those fears proved unfounded and inflation in August fell to a post-Soviet low of 3.3 percent.
13.09.2017 00:20 Why War with North Korea Could Cost Trillions of Dollars
War with North Korea could result in the death of fifty thousand or more Americans and more than two million Korean casualties. However, the economic cost would be massive, too, running into potentially trillions of dollars for the United States, while damaging Asia’s biggest economies. The 1950–1953 Korean War caused 33,651 U.S. casualties and cost the United States an estimated $20 billion. For South Korea, it caused 1.2 million deaths and saw the value of its gross domestic product (GDP) slump by more than 80 percent. However, the cost of a second Korean War would be far greater, according to Capital Economics.
10.09.2017 13:45 BRICS contributes to economic growth, citizen welfare
BRICS`s economic agenda is helping to build a new system for innovation, which will improve the welfare of citizens and boost economic growth of the bloc`s members, Russian First Deputy Prime Minister Igor Shuvalov has said. "By and large, the economic agenda of BRICS will help us to build an entirely new innovation system, at times differing from those imposed standards that our partners have, an economic system that will be both sovereign and, at the same time, permeated with integration. And this will allow our citizens to improve their welfare ... allow us to develop our economy," Shuvalov told Xinhua in a recent interview. Shuvalov said during the Third Eastern Economic Forum (EEF) here on Sept 6-7 that BRICS, which groups Brazil, Russia, India, China, South Africa, is at "a serious stage of its formation" and that it takes time to build a big, powerful organization. "From what we see, the leaders are determined to move forward in accordance with this plan," he said.
08.09.2017 20:31 Expanded BRICS cooperation benefits global economy
Israeli experts commend the BRICS bloc of five emerging economies for its seeking expanded cooperation and partnership, which they believe will benefit the global economy. The just-concluded BRICS summit, held in the Chinese coastal city of Xiamen at a time when the bloc enters its second decade, has attracted a close attention from the Israeli political and economic circles. The bloc grouping Brazil, Russia, India, China and South Africa is seeking to enhance cooperation in and outside it as well as to expand partnerships with especially developing countries in order to boost global growth and globalization. Israeli Minister of Economy and Industry Eli Cohen highly agrees with the BRICS initiatives of jointly building an open global economy and establishing diverse development partnerships. "Every nation in the world is looking forward to expanding and strengthening their economic ability," he told Xinhua Thursday. "We are a globalized world and we need to work together in order to achieve our mutual goals."
05.09.2017 17:53 Minister of Economy expects inflation to rise in Ukraine
Stepan Kubiv, Acting Head of the Ministry of Economic Development and Trade of Ukraine, in his last interview to representatives of the central mass media, noted that by the end of this year the country`s economy expects inflation rate of 11 percent, and by the end of the year GDP growth, which will not be more than two percent. Mr. Kubiv noted that in the final quarter of this year a number of internal as well as external factors will play a role in the Ukrainian economy. For example, among the domestic factors, the minister - called a real assessment of the state budget next year, as well as the need for a deep pension reform, for which a preliminary reading had already taken place. The head of the department and the direction for the country`s economy were designated for its innovative and investment restructuring and modernization. Among the external factors, the impact of global market mechanisms, past and forthcoming elections in a number of European states, sanctions and positions of a number of Asian countries: India, Turkey, China and Japan.
05.09.2017 12:40 Is Russia`s Arms Industry About to Fall Off a Cliff?
Is Russia on the verge of seeing one of its last major export industries fall off? A recent SIPRI report paints a grim picture of the future of Russian arms exports, squeezed by the West on one side and (increasingly) by China on the other. The report suggests that as Chinese arms catch up in terms of technology and reliability, Russia will struggle to hold onto its position as an arms exporter. To be sure, Russia has tenaciously held on to its market share over the last decade, despite some technical stagnation and the growing sophistication of Chinese arms. But keeping its place may simply be untenable in the long run.
02.09.2017 11:30 SEB: The world economic situation is improving
Late-cycle growth forces are lifting the global economy, which will expand faster than the historical average throughout our 2017-2019 forecast period. But forecasts point to a complex balancing act between dramatic political events and classic cyclical issues such as the sustainability of growth, the resource situation and inflationary forces, according to SEB economists writing in the September 2017 issue of the quarterly Nordic Outlook report. So far this year, statistics have provided renewed support for a high Swedish GDP forecast. There are mounting risks of overheating, and Sweden`s Riksbank will hike its key interest rate twice in 2018 and three times in 2019 to 0.75 per cent. Despite dark political clouds, activity has surprised on the upside in many economies - for example in China, Japan and the euro zone as well as in the Nordic and Baltic countries - driven by ever-stronger labour markets, rising resource utilisation, increased trade and higher asset prices. Aside from greater georpolitical risks, there are also major social challenges such as economic inequality, ageing populations and sectoral job losses due to digitisation and automation. GDP growth in the 35 mostly affluent countries of the Organisation for Economic Cooperation and Development (OECD) will reach 2.1 per cent this year and in 2018, then slow to 1.9 per cent in 2019.
29.08.2017 14:37 Roads And Fools In Russia: Not All That Glitters Is Silk Road
The collapse of the Soviet Union gave rise to a vast archipelago of unclaimed man-made objects and land in Russia and beyond. Thousands upon thousands of roads, bridges, water pipes, gas pipes, power grids, cemeteries, farmland, and more have passed from state hands to no one in the last 26 years. These assets aren`t just lying around. They`re being used. Without proprietors, inefficiencies, corruption, and extensive shadow economies pop up around them. China`s Belt and Road Initiative – packaged in part as a driver of development for Russia and Central Asia – dodges the myriad issues facing municipalities in the region as a result of the absence of legal responsibility for infrastructure in use. Building new roads and rails to transit goods does little to help the legal chaos surrounding ownerless assets, reiterating the extent to which China`s avowed virtue of non-interference in the domestic affairs` of others handicaps the utility of projects ostensibly meant to encourage development.
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