The Lastest Macroeconomic News
03.05.2017 00:02 Informal economy in Russia grows to record levels
In 2016, employment in the informal sector of Russia`s economy set a record level for the last 10 years, reports Rosstat, the Russian Statistics Agency (the information was published (in Russian) by the RBC business daily in mid-April). Rosstat believes that the informal employment category consists of those people who work in enterprises that are not registered as a legal entity, that is, the self-employed, farmers, individual entrepreneurs, and people whom they hire. Family members who help the family business or a business belonging to a relative are also included. The informal economy employed 15.4 million people in 2016. This is 21.2 percent of the total number of people employed in Russia. The informal sector has been growing rapidly since 2011 and in this period has increased by four million people, according to RBC`s calculations, which are based on Rosstat`s statistics. However, the Russian Presidential Academy of National Economy and Public Administration estimates that the informal labor market in Russia consists of 30 million people, 21.7 million of whom either combine official employment with informal earnings, or receive a part of their salary unofficially, "in envelopes." According to the Russian Finance Ministry, the volume of informal salaries in the country is estimated at 12 trillion rubles ($200 billion), which is 10-13 percent of the GDP.
01.05.2017 23:07 Philippines` GDP growth to hit 6.9% in 2017 and 7.0% in 2018
Higher infrastructure spending and remittances from overseas Filipino workers would make Philippine economy the third-best performer in Southeast Asia until next year, according to the United Nations Economic and Social Commission for Asia and the Pacific (Unescap). In the 2017 Economic and Social Survey of Asia and the Pacific, Unescap said Philippine GDP could grow by 6.9 percent this year and 7 percent next year. This will make the Philippines the third-best performer in the region where average growth is projected to settle at only 4.7 percent this year and 4.8 percent next year. “Higher oil prices would help boost economic activities in the Middle East, which hosts many Filipino overseas workers. In addition to higher workers` remittances, fiscal support would support household consumption,” Unescap said.
29.04.2017 15:05 The Russian central bank lowered interest rate on steady inflation decline
The Russian central bank lowered its key interest rate by half a percentage point to 9.25 percent on Friday, citing the alleviation of inflationary pressure. Inflation is moving toward the target of 4 percent for 2017 and the economy is recovering, said the bank in a statement. The bank cut its interest rate by half a percentage point to 10.5 percent in June 2016 in a first reduction since August 2015, and further cut the rate to 10 percent in September 2016 and to 9.75 percent last month. In the statement, the bank said it expects Russia`s inflation to decline to 4 percent before the end of 2017 and stay around this level in 2018-2019. Inflation fell to 4.3 percent in March from 4.6 percent in February, while it was estimated at 4.2-4.3 percent as of Monday, the bank said. The rate began to steadily decline last year from a peak of 17.0 percent in January 2015.
27.04.2017 13:38 President Trump`s economy isn`t bursting out of the gates.
All signs are that it is starting 2017 with more of the same sluggish growth the U.S. experienced during President Obama`s term. But as with the final years of Obama`s presidency, there`s reason to be optimistic about the current state of the economy under Trump. The government will publish the first report of economic growth in the Trump era on Friday. The Atlanta Federal Reserve is predicting 0.5% annual growth in the first three months of the year; private economists are forecasting 1.1%. The Trump administration isn`t really responsible for the slow growth yet. The reason: Many of his policies haven`t become law, and none of them have had enough time to work through the economy. "What happened in the first quarter of the year is entirely beyond credit or blame of the Trump administration or the 115th Congress," says Joseph Brusuelas, chief economist at RSM, an accounting firm. "That`ll be a 2018 story."
25.04.2017 14:13 Can India replace China as driver of world GDP growth over next 20 years?
The share of emerging and developing markets in world gross domestic product (GDP) has improved from 42.3% in 1996 to 58.1% in 2016, according to the International Monetary Fund`s latest World Economic Outlook database. (The share of global output has been computed by taking GDP on a purchasing power parity basis). This increase in share is a remarkable achievement and seems to be a ringing endorsement of the benefits of opening up the economy and of globalization. It`s a rise of 15.8 percentage points in the share of global output in the last 20 years. These years have been the heyday of globalization, which has led to a spurt in the growth of developing economies. But the story gets much more nuanced. If we disaggregate the numbers, we find that China`s share of world output has gone up from 6.3% in 1996 to 17.8% in 2016. In other words, the lion`s share, or 11.5 percentage points out of the 15.8 percentage point increase in the share of developing economies is due to the extraordinary growth of China alone. That means China contributed as much as 72.8% of the growth in the share of developing economies in world GDP in the last two decades. Remove China from the picture and the performance of the other developing economies gets toned down considerably.
23.04.2017 14:38 Russia and Saudi Arabia could face economic and political consequences if the oil-production deal isn`t extended
The world`s major oil producing countries - including some non-OPEC states - struck a deal in November to cut production with the hope of ending the global glut that has kept prices depressed for over two years. That six-month deal is about to expire and investors are trying to parse whether it`ll be extended amid perennial geopolitical tensions and overlapping strategic market interests. Saudi Arabia`s oil minister Khalid al-Falih suggested at an oil conference on Thursday that production cuts may need to continue, and said "there is an intitial agreement that we might be obligated to extend to get to our target." Given that the economic and political stresses major oil producers Russia and Saudi Arabia face at home - that could be exacerbated by another dip in oil prices - they`re likely to go along with it, says Helima Croft, Head of Commodity Strategy at RBC Capital Markets.
20.04.2017 00:39 IMF Expects Global Economy to Grow 3.5% in 2017
The International Monetary Fund (IMF) on Tuesday revised its forecast for global economic growth in 2017 upward by one-tenth of a percentage point to 3.5 percent but left its 3.6 percent forecast for 2018 unchanged, and warned of the risks of “isolationist policies” among advanced economies. The IMF`s “World Economic Outlook” highlights as major contributors to the upward revision – which sees global gross domestic product (GDP) growth rising four-tenths of a point above the 3.1 percent figure in 2016 - improved economic conditions in China and the US, the latter as a result of President Donald Trump`s promised fiscal expansion. The report projects 6.6 percent GDP growth this year in China and 2.3 percent GDP growth in 2017 followed by 2.5 percent growth in 2018 in the US. The US estimates are the same as in the January forecast, but they are one-tenth and four-tenths of a point, respectively, above the IMF`s October 2016 forecast.
18.04.2017 10:12 FIFA losses hit $369M in 2016; targeting $1B profit for 2018
FIFA finances showed a loss of $369 million last year as American and Swiss corruption investigations added legal costs to the soccer body`s budget and scared off sponsors. An even bigger loss is expected next year, FIFA said Friday after publishing its 2016 accounts, which reflect a new way of reporting income. FIFA expects to rebound with $1 billion in profit in the accounts for 2018, which will include income from most TV broadcast deals for the World Cup in Russia. Still, the scandal-hit soccer body`s confidence will be tested with 24 slots currently unsold in a 34-sponsor program for a World Cup that kicks off in only 14 months. “However, it goes without saying that stagnant global trade and subdued investment, combined with investigations surrounding previous FIFA officials, have put pressure on the organization`s overall revenue generation,” FIFA said in the 116-page financial report for 2016.
17.04.2017 11:12 Russian economic crisis far from over, experts say
It is early to say that the economic crisis in Russia is over, according to economists. Tatiana Isachenko, professor at MGIMO University in Moscow, told Anadolu Agency on Friday that she did not believe the Russian economy emerged from the crisis, and the country was trying to get through the crisis with its savings from the pre-crisis period. "However, we are spending our savings quickly and cannot create such components to substitute those savings," she said. Isachenko noted that the issue of carrying out necessary structural reforms was still ambiguous, therefore Russian President Vladimir Putin`s economy team had to change its strategy in the near future. "Russian industry needs foreign direct investments. Nevertheless it cannot be accomplished due to political reasons," she said, adding unless the sanctions are lifted, "we cannot achieve a remarkable success, even if we improve our relations with the EU and China".
15.04.2017 14:17 Trade Recovery Expected in 2017 and 2018
Growth in the volume of world merchandise trade is expected to rebound this year from its tepid performance in 2016, but only if the global economy recovers as expected and governments pursue the right policy mix. The World Trade Organization (WTO) is forecasting that global trade will expand by 2.4 percent in 2017. However, as deep uncertainty about near-term economic and policy developments raise the forecast risk, this figure is placed within a range of 1.8 percent to 3.6 percent. In 2018, the WTO is forecasting trade growth between 2.1 percent and four percent. The unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled. A spike in inflation leading to higher interest rates, tighter fiscal policies and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years.
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