The Lastest Macroeconomic News

23.10.2016 19:27 Russia`s output decline may be prelude to GDP contraction

Russia`s industrial output was down 0.8% y/y in September and was 0.3% weaker than August on a seasonally-adjusted basis. The manufacturing sector, which accounts for the majority of industrial production in Russia, contracted in September by 1.6% y/y. This more than offset some growth in mining (+2.1% y/y) and utilities (+0.8% y/y). Russia`s manufacturing sector output is volatile and a monthly drop is often followed by a spike (often a result of large orders or projects completed in a single month). However, a closer look at September manufacturing statistics show that the weakness was not confined just to a sector or two, but was quite pronounced throughout industry.

21.10.2016 18:17 Duterte says US lost control of world economy

Shackled with trillions of dollars in debt to China, the US no longer controls the world economy, President Rodrigo Duterte said. Duterte spoke to Chinese businessmen in Beijing Thursday, in the middle of a four-day state visit that is meant to repair ties between Manila and Beijing that have been strained by disputes in the South China Sea. "America does not control the economy now. His place that he is the most powerful industrial nation in the world. That`s a lot of bullshit," Duterte said, to applause from the audience. "How can you be the most powerful industrial country when you owe China and you are not paying it for almost three trillion dollars? Kalaki-laki ng utang mo, may utang ka [You are saddled with huge debt]" he added. China is the biggest holder of US government debt, with $1.9 trillion in bonds, notes and bills as of August, according to Bloomberg data.

19.10.2016 13:20 Fitch: Russian recovery likely to be drawn out and weak

The Russian economy will struggle to return to pre-crisis growth levels in the next few years because consumer demand will stay weak as people save more and spend less, Fitch Ratings said on Tuesday. Consumer demand is the largest driver of Russian growth, while proceeds from energy exports, another important contributor, are seen stuck near multi-year lows as a global glut restrains oil prices. Presenting Fitch`s forecasts for 2016-18, Associate Director for Consumer and Healthcare Tatiana Bobrovskaya said Russian consumers would stay focused on keeping costs down. Some recovery in consumer demand was possible in the low and middle price segments of the market, she said, but stronger demand in higher price segments might only be possible from 2018. "The year of 2017 will still be very difficult for retailers and producers," Bobrovskaya said, adding that consumer confidence in the third quarter of 2016 remained at "crisis levels".

17.10.2016 11:05 Opinion: BRICS? What`s that?

It was the American investment bank Goldman Sachs that first dreamed of the rise of aspiring emerging economies. It established a nice-sounding fund, BRIC, in 2001 to entice investors from around the world. The BRIC countries, chosen with great care, were themselves enticed by the web of possibilities. In 2010, South Africa joined Brazil, Russia, India and China that formed the original BRIC group. It thrived on a grand vision. The BRIC countries felt a special kinship for one another and wanted to change the world. They challenged the dominance of industrialized nations at the World Bank, the IMF and the UN Security Council. They committed themselves to a renewed solidarity among countries of the global south.

16.10.2016 13:03 BIMSTEC in BRICS: A mini-SAARC summit in the making?

Over a period of time the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)- has definitely gone beyond its initial mandate of securing technological and economic cooperation among nations in the coast of Bengal. The inclusion of Nepal and Bhutan into BIMSTEC in 2004 along with BRICS and SAARC membership gave India an alternative platform to engage with all its immediate neighbours such as Sri Lanka, China, Bhutan, Burma, Nepal, while keeping Pakistan at an arms length. As host of 19th summit, Pakistan failed to secure confidence of SAARC nations on its anti-terrors effort, five member nations including India, Bangladesh, Sri Lanka, Bhutan, pulled out of the summit, while another BIMSTEC member and also SAARC Chair Nepal made formal announcement of 2016`s SAARC summit`s postponement without specifying any future dates. Therefore it wont be completely wrong to conclude that BRICS-BIMSTEC is the mini-congression of SAARC nations for 2016 with six of the eight SAARC members participating in it.

14.10.2016 10:36 Global debt reached 225% of world GDP

The IMF said about two thirds of the 2015 total, or about US$100 trillion, is owed by private sector borrowers, and noted that rapid increases in private debt often lead to financial crises. While debt profiles vary by country, the report said that the sheer size of the debt could set the stage for an unprecedented private deleveraging that could thwart a still-fragile economic recovery. Excessive private debt is a major headwind against the global recovery and a risk to financial stability, IMF Fiscal Affairs Director Vitor Gaspar told a news conference. Financial recessions are longer and deeper than normal recessions. While the United States has de-leveraged since the 2008-2009 financial crisis, the report cited the buildup of private debt in China and Brazil as a significant concern, fueled in part by a long era of low interest rates.

12.10.2016 09:51 Why Is The IMF So Obsessed About Growth?

How do you know when you are obsessed about something? The dictionary definition states you have an idea or thought that is constantly on your mind. At its annual meetings last week, the International Monetary Fund [IMF] showed it is absolutely obsessed with economic growth. At the presentation of the World Economic Outlook and its prediction for global growth, the word "growth" occurred 37 times, more than any other. Add another 22 occurrences at the press conference of managing director Christine Lagarde and 16 at a conference regarding financial stability and you can safely say the institution is obsessed with growth. "My hope at the end of the Annual Meetings is that each Finance Minister, each Governor of the Central Bank, will go back home thinking what can I do in order to propel that growth, which is currently too low for too long, benefiting too few," Mrs. Lagarde said at a conference on Oct. 6.

10.10.2016 11:48 Germany raises 2016 growth forecast for Europe`s biggest economy

The German economy will grow slightly faster than expected this year due to state spending on migrants and soaring private consumption, the Economy Minister said on Friday, and he called for more public investment in schools and roads. Sigmar Gabriel also warned Chancellor Angela Merkel`s conservatives against limiting the state`s spending ability by promising "gigantic tax cuts" ahead of next year`s election. "The level of investment is always a yardstick for how firmly a country believes in its future and how it is willing to tackle this," said Gabriel, head of the Social Democrats, junior partner in Merkel`s coalition government. "It`s clear that we need significantly more investment in education and schools," he said, adding that more roads needed to be modernised and Internet connections had to become faster. The government lifted its 2016 growth forecast for Europe`s biggest economy to 1.8 percent from 1.7 percent previously, which would be the strongest growth in half a decade.

08.10.2016 18:15 Risk of Deglobalization Hangs Over World Economy

One of the biggest puzzles in the global economy right now is the slowdown in trade. Since 2012, global trade has been growing at just 3% a year, less than half the rate in the previous three decades. Between 1985 and 2003, it grew twice as fast as global gross domestic product; in the last four years, trade has barely managed to keep pace, according to the International Monetary Fund. What`s more, this slowdown has been across the board, affecting both developed countries and emerging economies, trade in services as well as goods. The World Trade Organization is now forecasting that world trade will grow by just 1.7% this year, making this the first year in 15 years it has grown more slowly than the world economy. This slowdown is worrying because of what it may augur for the long-term health of the global economy. The globalization of recent decades has been a major driver of rising living standards across the world. Citizens of developed countries benefited from falling prices while those in emerging economies benefited from better paid jobs.

06.10.2016 13:35 Oil-rich Russia taps into reserve funds

While forecasting an economic recovery soon, the Russian government draws from its reserve funds to cover a budget gap. For the third time this year, the Russian Finance Ministry said it pulled money out of its reserve funds in an effort to cover a budget deficit. According to a report from Russian news agency Tass, the government transferred $6 billion from the reserve fund to cover a gap in the budget, thus depleting the fund by 18 percent from August. In April and May, the government pulled $6 billion from the fund each month to cover the deficit. A July report from the International Monetary Fund said the Russian economy would remain in recession through the remainder of 2016 because of lower oil prices and sanctions imposed by Western powers in response to the Kremlin`s stance on crises in Ukraine. Economists at the IMF said Russia was moving through a fiscal adjustment period that started in 2015, though there are prospects for "modest" recovery starting in 2017.

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