The Lastest Macroeconomic News
18.10.2017 19:06 Russian retail sales exceed expectations in September, underpin growth outlook
Russian retail sales rose more than expected in September, data showed on Wednesday, indicating economic recovery is under way. Retail sales are considered to be the gauge for consumer demand, the main economic driver in Russia. Such sales rose 3.1 percent in September in year-on-year terms after a 1.9 percent rise in the previous month. The Capital Economics research firm said in a note the data suggested "the economy remains in reasonably good shape, and the recovery in consumer spending is strengthening." "Consumers seem to have benefited from the further falls in inflation," Capital Economics said in a note. Annual inflation in Russia slowed to an all-time low of 3 percent in August, paving the way for more rate cuts by the central bank over the medium term. Analysts polled by Reuters in late September said they expected the central bank to cut the key rate to 8.00 percent from the current level of 8.50 percent. The retail sales data underpin latest official growth forecasts, which are more optimistic than predictions made earlier in 2017, the first year of economic growth after two years of contraction.
17.10.2017 22:18 EU-Russia trade bouncing back - despite sanctions
Earlier this year, analysts noted the deterioration of trade relations between the EU and Russia, after the imposition of sanctions in July 2014. It was a question of a sharp decline in both imports and exports in the sectors affected by the sanctions, as well as in other sectors of the economy that suffer from the uncertainties caused by the crises in Crimea and Ukraine. In September, the EU Parliament published a report confirming that this decline continued in 2016 and this news was also reported by EUobserver. However, the trend has changed in 2017. Eurostat data from the first seven months of the year shows that this decline has stopped and, in fact, the trend was reversed with an expected increase of 20 percent by the end of the year compared to 2016. EU-Russia trade was up to ˆ285 billion in 2014. In 2016, this number dropped to ˆ181 billion. In only three years, EU members imported ˆ64 billion less from Russia and exported to it ˆ31 billion less. This decline affected Germany, Italy, Austria and Lithuania above all, which constitute ˆ14.5 billion less in export towards Russia.
16.10.2017 17:47 Buried Treasure: How Much Is Hidden in Tax Havens?
Switzerland, which developed cross-border wealth-management in the 1920s, once was in a league of its own as a tax haven. Since the 1980s, however, tax-dodgers have had a rich menu to choose from: They can hide assets anywhere from the Bahamas to Hong Kong. The percentage of global wealth held offshore has increased dramatically—but it has been hard to say how much that is, and who owns it. Few offshore centers used to disclose such data. In 2016, however, many authorized the Bank for International Settlements to make banking statistics publicly available. Using these data, a new study by economists Annette Alstadsaeter, Niels Johannesen and Gabriel Zucman concludes that tax havens hoard wealth equivalent to about 10 percent of global GDP. This average masks big variations: Russian assets worth 50 percent of GDP are held offshore. Countries such as Venezuela, Saudi Arabia and the United Arab Emirates climb into the 60 percent-to-70 percent range. Britain and continental Europe come in at 15 percent, but Scandinavia at only a few percent. One conclusion is that high tax rates, like those in Denmark or Sweden, do not drive people offshore. Rather, higher offshore wealth is correlated with factors such as political and economic instability and an abundance of natural resources.
15.10.2017 14:09 AfDB projects 3.7% GDP growth for Africa by 2018
The Africa Development Bank, AfDB, yesterday, revised downward its projected GDP growth rate for the continent to 3.7 percent from 4.2 percent by 2018. The bank in an updated forecast released in Abidjan, said: “The changes in previous forecasts released in the African Economic Outlook in May 2017 have followed the release of new data by some key countries - Nigeria, Algeria, and Egypt - which account for some 50% of the continent`s GDP and which revised their 2017 and 2018 forecasts downwards.” Abebe Shimeles, Acting Director, Macroeconomics Policy, Forecasting and Research, said that however, the continent`s averages compare favourably with global economic growth projections of 3.5% and 3.6% GDP growth in 2017 and 2018, respectively. “Africa`s economic outlook improved in 2017 compared with 2016 and is expected to gain momentum in 2018. GDP growth in 2017 is expected at 3.0% up from 2.2 in 2016 and projected to expand to 3.7% in 2018,” he said.
14.10.2017 16:43 Emerging Markets Will Be Key Drivers of Global Growth
The market already knew, but the International Monetary Fund confirmed it last week: Global growth is on track and many developing countries are fueling the economic expansion. The IMF expects global growth of 3.6% in 2017, and 3.7% in 2018, a very slight upward revision from its July forecast. For developing economies, the IMF maintained its 4.6% GDP growth estimate for 2017, but raised it by a tenth of a point to 4.9% for 2018. The IMF`s assumptions are, in general, good for emerging markets. Those include generally higher commodity prices next year, but a relatively flat $50-per-barrel oil price this year and next. The IMF also assumes a gradual normalization of the policy interest rate in the U.S., a slightly weaker U.S. dollar, and no U.S. tax cuts - to President Donald Trump`s consternation. The report notes risks to the rosy outlook, including debt, a shift by central banks away from monetary stimulus, and weak profitability at a third of the world`s systemically important banks, which represent $17 trillion in assets.
14.10.2017 00:50 IMF raises China 2017 growth forecast due to its progress in economic reform
The International Monetary Fund (IMF)`s move to raise its forecast for China`s economic growth to 6.8 percent reflects the country`s recent progress in trimming financial risks and deepening economic reform, US experts have said. In its latest World Economic Outlook released Tuesday, the IMF expected the Chinese economy to grow 6.8 percent this year and 6.5 percent next year, both 0.1 percentage point higher than its previous forecast in July. “The growth rate is wonderful compared to the growth of many other countries,” Farok Contractor, a distinguished professor at Rutgers Business School, told Xinhua on Tuesday. “Of course it has come down from the previous eight or ten percent, but that is still a very healthy growth rate and that should be the envy of any other country in the world,” he said. According to IMF, the upward revision to the 2017 forecast reflects “the stronger-than-expected outturn in the first half of the year underpinned by previous policy easing and supply-side reforms.”
12.10.2017 22:26 IMF forecasts economic recovery for Middle East economies in 2018
Economic growth in the Middle East, North Africa, Afghanistan and Pakistan (Menap) is likely to rebound in 2018 after losing momentum this year, weighed down by geopolitical risks and a slowdown in Iran`s economy, according to the International Monetary Fund (IMF). Overall Menap growth is projected to rise to 3.5 per cent in 2017 from 2.6 per cent this year, the Washington-based IMF said in its world economic outlook report on Tuesday. The region`s 2018 prospects are just below that of the world economy as a whole, which is forecast to grow by 3.7 per cent next year, and far ahead of the average for advanced economies, which are predicted to grow by just 2 per cent. The UAE`s economy, which is more developed and diversified than most others in the Menap region, is expected to grow 3.4 per cent in 2018, up from 1.7 per cent this year. "In 2018, [Menap] growth is expected to increase to 3.5 per cent, mostly reflecting stronger domestic demand in oil importers and a rebound of oil production in oil exporters," the IMF said, adding that regional insecurity and geopolitical risks still weigh on the outlook.
11.10.2017 15:27 Russian Economic Growth Picks Up At End Of Q3
As the Russian economy continues to recover from recession, solid growth in the manufacturing and service sectors point to the emergence of stronger demand. Relatively muted inflation and falling interest rates, however, may be themes that continue throughout 2017. Russian firms have seen a solid progression throughout 2017 so far, with both manufacturers and service providers indicating a sustained recovery in operating conditions. The IHS Markit Composite PMI Output Index suggests that the Russian economy is on course for the best year since 2007. The latest PMI data signaled a sixth successive quarter of growth, the longest sequence of expansion since late-2013. Official GDP data signaled solid year-on-year growth of 2.5% in the second quarter, with the Composite PMI suggesting another robust performance in the third quarter. The PMI does not include construction and retail, however, and weak performances in these sectors have caused a drag on overall figures in the past. In 2016, PMI component sectors signaled GDP growth of 0.8%. This signaled stronger underlying GDP than was suggested by the final official data, which indicated a 0.4% contraction.
08.10.2017 13:07 No miracles: labor shortage set to hit Russia`s GDP
A dearth of young people joining Russia`s workforce because of a low birth rate will shave several percent off potential economic growth in the next five to six years, Economy Minister Maxim Oreshkin said. In an interview at the Reuters Russian Investment summit, he said the labor shortage made it hard for technology companies, among others, to recruit staff they need -- hurting a sector the government has identified as vital to reviving economic growth. Russia`s birth rate hit a low in 1999 after living standards fell following the Soviet Union`s collapse. The impact is being felt now as people born at that time reach school-leaving age. “In countries with a normal demographic pyramid, a new generation comes in with modern skills and takes up jobs in a modern economy and modern industries, and with their arrival the labor market changes in favor of new sectors,” he said. In Russia`s case, Oreshkin said, this was not happening. “This is a very serious thing. The process is going to continue for five to six years,” he said.
06.10.2017 14:57 World Bank ups forecast for China`s GDP growth in 2017 and 2018
The World Bank on Wednesday raised China`s growth forecast for 2017 and 2018, citing an improved external environment and strong domestic demand. The bank now expects China`s economy to expand by 6.7 percent in 2017, up from an April projection of 6.5 percent and, for 2018, 6.4 percent instead of 6.3 percent. "(China`s) GDP growth is revised upward in 2017 in light of better-than-expected performance in the first half of the year," the World Bank said in its latest East Asia and Pacific Economic Update. China`s economy grew at 6.9 percent in the first half. The updated projection is part of a broader forecast for the region to grow 6.4 percent in 2017 and 6.2 percent in 2018, compared with the previously forecast 6.2 percent in 2017 and 6.1 percent in 2018. As more efforts are made to rebalance away from investment and external demand toward domestic consumption, China`s growth is projected to moderate in 2018-2019 but remain higher than many economies in the region, it said.