The Lastest Macroeconomic News
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.
04.10.2016 18:30 IMF warns of protectionist threat to global growth
The IMF on Tuesday left its global economic forecasts unchanged into 2017 but called governments to action against the threats of low growth and protectionism. Global output is expected to grow this year at a rate of 3.1 per cent before rising to 3.4 percent next year, estimates that are unchanged from July, according to the International Monetary Fund. But the Fund downgraded forecasts both for growth in global trade volume and for advanced economies` output, saying that prospects for richer countries had darkened this year. "It is vitally important to defend the prospects for increasing trade integration," said IMF chief economist Maurice Obstfeld. "Turning back the clock on trade can only deepen and prolong the world economy`s current doldrums." The IMF notably cut its growth forecast for the United States, the world`s largest economy, but upgraded those for Japan and the Eurozone.
03.10.2016 11:50 Russia is preparing for $40 oil for a long time
Fourty Dollar Oil ? The Russian economy is slowly recovering from its oil and sanctions-induced coma, but reforms to encourage long-term economic growth are still not a priority; that`s according to a new research report from Morgan Stanley. Some Morgan Stanley analysts and economists recently visited Russia to try and get some idea of where the country is heading financially over the next few years. Analysts visited the CBR, Ministry of Finance and Ministry of Economy, as well as the IMF and a broad range of market experts. Discussions were centred on the growth outlook, the upcoming 2017-19 budget plan, the CBR`s vision of monetary policy and the political outlook.
01.10.2016 06:14 Russian economy likely to contract this year, expand next
The affirmed preliminary data of Russias second quarter GDP growth showed that the economy contracted 0.6 percent year-on-year, as compared with a 1.2 percent contraction in the first quarter. According to the details published, the agricultural sector grew 2 percent annually, while manufacturing, mining and quarrying rose 0.3 percent year-on-year. On the other hand construction contracted 9.5 percent annually, whereas wholesale and retail declined 1.2 percent. The preliminary seasonally adjusted data for the month of August indicated that the Russian economy grew 0.3 percent sequentially, the first growth since September 2015. The economy is expected to shrink 0.6 percent year-on-year for the whole of 2016, given the Brent year average of USD 48.6/bl, noted Danske Bank in a research report. For the next year, Russias GDP is expected to expand 1.2 percent, added Danske Bank.