The Lastest Macroeconomic News
03.12.2012 19:54 Chinese manufacturing returned to growth in November for the first time in over a year
Chinese manufacturing returned to growth in November for the first time in over a year and the deep downturn in euro zone factories eased slightly, according to business surveys on Monday. Monday`s purchasing managers indexes (PMIs) suggested China, whose economy has misfired this year, is regaining its vigour going into 2013. If sustained, it could prove vital for the world economy next year since a meaningful recovery in Europe still looks a long way off. Monday`s final reading of HSBC`s China manufacturing PMI rose to 50.5 in November from 49.5 in October, the first time since October 2011 the headline number has topped the 50-point growth threshold. While the decline among the euro zone`s embattled factories eased to an eight-month low in November, the latest PMIs showed the economy is on course for its worst quarter since the depths of early 2009. Markit`s Eurozone manufacturing PMI rose to 46.2 in November from October`s 45.4, though it stayed below the 50 mark dividing growth from contraction for the 16th straight month. There was little sign of an imminent turnaround, however, with the data merely showing factory activity, new orders and output declining at a slower rate. The big emerging economies that have contributed most to global growth in recent years have been sputtering of late, with India expected to post its weakest full-year GDP expansion in a decade and Brazil logging an unexpectedly weak third quarter. That has left investors once again hoping China will take up the slack, after seven straight quarters of slowing growth. British manufacturing activity shrank less than expected in November, but the sector remained fragile as orders edged down, a survey found on Monday. In the United States, the Institute of Supply Management (ISM) index of national factory activity, one of two PMI surveys due on Monday, declined to 49.5 for November, below the 50-line, from 51.7 in October. The most pressing threat to the U.S. economy remains a series of automatic budget cuts and tax hikes due at the end of the year that could plunge the country back into recession, unless opposing politicians can come to a deal to avert it. As of the weekend, neither side has been willing to yield. Aside from China, the outlook for other major Asian economies looks uncertain. Monetary easing by the big developed world central banks has been blamed for pushing up the currencies of countries such as Korea and Taiwan, hampering their export-led recoveries. South Korea`s HSBC/Markit PMI edged up in November, but was still below the key 50-mark for the sixth month in succession. Taiwan`s PMI reading has also been below 50 for six successive months, with the headline number deteriorating to 47.4 in November from 47.8 in October on weakening demand at home and abroad. India`s factory activity has been expanding for over three-and-a-half years, although it remains well below the expansion rate seen in the years before the global financial crisis.
27.11.2012 19:31 OECD sees 2013 global growth of 2.9 pct, down from 3.4 pct
The OECD slashed its global growth forecasts on Tuesday, warning that the debt crisis in the recession-hit euro zone is the greatest threat to the world economy. In light of the dire economic outlook, the Organisation for Economic Cooperation and Development urged central banks to prepare for more exceptional monetary easing if politicians fail to come up with credible answers to the debt crisis. The Paris-based think-tank forecast in its twice-yearly Economic Outlook that the global economy would grow 2.9 percent this year before expanding 3.4 percent in 2013. The estimate marked a sharp downgrade since the OECD last estimated a rate in May of 3.4 percent for this year and 4.2 percent in 2013. GDP growth across the 34 rich nations of the OECD is projected to match this year`s 1.4% in 2013, before gathering momentum to 2.3% for 2014, according to the forecasts. The euro zone is facing two years of economic contraction, while the United States risks a recession if lawmakers there fail to agree a deal to avoid a combination of tax hikes and budget cuts that will otherwise go into effect next year. Providing the deadlock in Washington is overcome, the world`s biggest economy will grow 2.0 percent next year, the OECD estimated, cutting its forecast from 2.6 percent in May. "The U.S. fiscal cliff is a very important source of concern, but the greatest downside risk remains the euro zone," OECD chief economist Pier Carlo Padoan told Reuters in an interview. "The reason for that is not only recession, but also the fact that different negative policy (feedback) loops between sovereign debt, the banking situation and exit risks remain. So the overall zone remains in a state of fragility." Cutting its estimates, the OECD forecast that the euro zone economy would contract 0.4 percent this year and another 0.1 percent next year, only returning to growth in 2014 with a rate of 1.3 percent. The OECD warned that diverging financing conditions within the European monetary union threaten to pull it apart if policymakers fail to get a grip on the debt crisis. "The euro area, which is witnessing significant fragmentation pressures, could be in danger," Padoan wrote in a foreword to the outlook, urging politicians to overcome deadlock over a single European Central Bank-led bank supervisor. Given the weakness of the global economic outlook, the OECD warned governments against being too zealous in their belt-tightening efforts and recommended that Germany and China even pursue temporary stimulus spending to revive growth.
16.11.2012 13:39 GDP down by 0.1% in the euro area and up by 0.1% in the EU27 in the third quarter of 2012
GDP fell by 0.1% in the euro area (EA17) and increased by 0.1% in the EU27 during the third quarter of 2012, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the second quarter of 2012, growth rates were -0.2% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 0.6% in the euro area and by 0.4% in the EU27 in the third quarter of 2012, after -0.4% and -0.3% respectively in the previous quarter. In September 2012 compared with August 2012, seasonally adjusted industrial production fell by 2.5% in the euro area (EA17) and by 2.3% in the EU27, according to estimates released by Eurostat. In August3 production increased by 0.9% and 0.5% respectively. In September 2012 compared with September 2011, industrial production dropped by 2.3% in the euro area and by 2.7% in the EU27. In September 2012 compared with August 2012, production of durable consumer goods fell by 4.3% in the euro area and by 3.7% in the EU27. Capital goods decreased by 3.0% and 2.6% respectively. Non-durable consumer goods declined by 2.8% in the euro area and by 2.1% in the EU27. Intermediate goods dropped by 2.0% and 1.7% respectively. Production of energy fell by 1.8% in the euro area and by 2.6% in the EU27. Among the Member States for which data are available, industrial production fell in eighteen, rose in four and remained stable in the Netherlands. The largest decreases were registered in Ireland (-12.6%), Portugal (-12.0%), Greece (-4.4%), Sweden (-3.4%), Spain and Latvia (both -2.8%) and France (-2.7%), and the highest increases in Estonia (+2.0%) and Slovakia (+1.4%). In September 2012 compared with September 2011, production of intermediate goods fell by 4.0% in the euro area and by 4.1% in the EU27. Non-durable consumer goods dropped by 2.3% and 1.8% respectively. Production of energy declined by 1.6% in the euro area and by 2.8% in the EU27. Durable consumer goods decreased by 1.2% and 3.0% respectively. Capital goods fell by 0.8% in the euro area and by 1.2% in the EU27. Among the Member States for which data are available, industrial production fell in seventeen and rose in six. The largest decreases were registered in Ireland (-12.8%), Portugal (-8.8%), Greece (-7.5%), Spain (-7.0%) and Italy (-4.8%), and the highest increases in Slovakia (+13.0%), Estonia (+8.3%) and Lithuania (+8.0%).
12.11.2012 18:09 Russia`s gross domestic product slowed to 2.9% in the third quarter of 2012
Russia`s gross domestic product slowed to 2.9% in the third quarter from 4.8% in the same period a year ago, preliminary data from the Federal Statistics Service showed. That exceeded a 2.8 percent median forecast of 15 economists in a Bloomberg survey, which was also the level of growth estimated by the Economy Ministry last month. The economy ministry had earlier predicted that GDP would grow 2.7% in the third quarter and 2.9% in the fourth quarter after the economy grew by 4% in the second quarter. The Bank of Russia expects the economy to grow by 3.5%-4.0% in 2012, while the economy ministry`s forecasts stands at 3.5%. In 2011, Russia`s GDP grew by 4.3%. The weakening economy presents a challenge to President Vladimir Putin, who returned in May for a third term in the Kremlin promising to create 25 million new jobs and boost investment. Droughts ravaged crops across southern and central Russia this year, while slowing growth in China and a slump in Europe curbed demand for shipments of oil, gas and metals.
10.11.2012 12:47 China, India GDPs to Exceed Entire OECD by 2060
The combined economic output of China and India will exceed that of the entire OECD bloc (Organization for Economic Cooperation and Development) by 2060, the group said in a report published on Friday. China, currently the world`s second biggest economy, is forecast to grow at an average pace of 6.6 percent from now till 2030, and 2.3 percent from 2030 to 2060. The projections for India, the 10th largest, are 6.7 percent and 4 percent, respectively, the OECD said. In comparison, the 34 OECD nations are projected to grow an average of 2.3 percent per year from now till 2030 and 1.7 percent from 2030 to 2060. “The faster growth rates of China and India imply that their combined GDP (gross domestic product) will exceed that of the major seven (G7) OECD economies by around 2025,” the group said in the report. “Strikingly, the combined GDP of these two countries will be larger than that of the entire OECD area, based on today`s membership, in 2060, while it currently amounts to only one-third of it.” Because of this faster economic growth, the two Asian giants will see their per capita income increase more than 7-fold, providing a big lift for the living standards of the average Chinese and Indian, the bloc added. This will be more pronounced in China because of the strong productivity growth and high capital investment compared to India, it added.
07.11.2012 10:39 Russia`s inflation rate fell to 6.5 percent in October from a year earlier
Russia`s price growth unexpectedly eased in October, slowing for the first time in six months and giving policy makers room to sidestep interest-rate increases. The inflation rate fell to 6.5 percent in October from a year earlier, compared with 6.6 percent in September, the Federal Statistics Service in Moscow said in an e-mailed statement. Prices grew 0.5 percent in the month. Economists projected a 6.7 percent annual rate and a 0.6 percent advance in the month, according to the median estimates of two Bloomberg surveys. Core inflation, a measure of underlying inflation pressures, was up 0.6 percent on the month, slightly lower than a 0.7 percent rise in September, and the same as in August. Core inflation, a measure of underlying inflation pressures, was up 0.6 percent on the month, slightly lower than a 0.7 percent rise in September, and the same as in August.
25.10.2012 14:49 The United Kingdom`s GDP rose at a 1.0 per cent quarter-on-quarter clip in Q3 2012
The United Kingdom`s gross domestic product (GDP) rose at a 1.0 per cent quarter-on-quarter clip in the three months ended in September, according to the latest data just out from the Office for National Statistics (ONS). That was the strongest reading since late 2007 and means that the economy exited from its double-dip recession. The consensus estimate had been for a reading of 0.6%, with some economists anticipating a rate of expansion of as low as 0.4%. Nevertheless, other economists, such as Goldman Sachs Asset Management`s Jim O`Neill had warned of the possibility for such a positive outcome. Versus a year ago GDP remained flat however, even if that was far better than the previous estimate for a contraction of 0.5% year-on-year during quarter two. As well, it must be pointed out that the ONS has indicated that: "it is not possible to quantify the overall impact of the Olympics and indeed some of the activity may have displaced other activity (for example, the comments on watching the Olympics in preference to films or DVDs)." Hence, no downwards adjustements have been made to the data. Nevertheless, the impact may have been quite substantial some economists seem to think.
23.10.2012 16:57 Russia`s GDP Growth Slows to 2.5% on Year in September 2012
Russian economic growth slowed in September partly due to the central bank`s policy of raising interest rates, which has failed to tame inflation and thwarted investment, Deputy Economy Minister Andrey Klepach said Friday "The Bank of Russia`s strict rate policy lowers investment, but doesn`t cool off the rise in consumer lending growth," Klepach said, speaking to reporters as he presented the GDP growth figures for September and the nine months of the year. He said the monetary policy tightening "proved to be unjustified, as it didn`t lower inflation, which is driven by non-monetary factors, but led to a higher cost of borrowing and lower investment activity." The central bank raised interest rates in early September, saying that it is more concerned about inflation than the slowing economic growth. Economists expect the bank to raise rates again by the end of the year. Klepach said Russian GDP growth stood at 2.5% year-on-year in Septemebr and at 0.4% on the previous month. The growth was mostly fueled by burgeoning domestic demand, which was up 4.4% year on year, while salaries were up 6.6%. Exports were mostly supported by the oil and gas sector, while imports stagnated on a monthly basis. Russian GDP growth stood at 3.8% for the first nine months of the year, while full-year growth is forecast at 3.5%. Klepach also noted that he sees a possibility of capital inflows at the end of the year, partly due to the Rosneft (ROSN.RS ) purchase of BP PLC (BP). He denied any knowelege of details of the possible deal.
07.10.2012 12:42 The IMF has cut its global growth forecasts for this year and next year
The IMF has cut its global growth forecasts for this year and next year and called on politicians in the eurozone and the US to take “decisive” steps to restore confidence, a German newspaper said. Citing excerpts from the IMF’s World Economic Outlook to be released early next week, the Handelsblatt business daily said that the Washington-based body predicted world economic growth of 3.3 percent this year and 3.6 percent next year. In July, the IMF issued forecasts of 3.5 percent and 3.9 percent, respectively. The German-language paper quoted the report as saying that the “further cooling of growth in the world economy this year and next goes along with a clear increase in downward risks.” The forecast depends in particular on “whether decisive political steps are taken in the eurozone and the US to stabilize confidence,” the paper quoted the report as saying. The IMF forecasts a shrinking of the eurozone economy of 0.4 percent this year and a small positive growth of 0.2 percent next year. The IMF cut its forecast for China to 8.2 percent, for India to 6 percent and for Brazil to 4 percent, according to Handelsblatt. The fund also saw a “further drop in inflation” given the sluggish global economic output and recommended additional cuts in interest rates to stimulate activity.
21.09.2012 19:15 Russia`s GDP grew 0.1 percent in August 2012 compared with the previous month
Russia`s GDP in August 2012 grew 0.1 percent compared with the previous month, Economy Minister of Russia Andrey Belousov said. In July 2012 Russia`s GDP fell 0.2 percent compared with the previous month and grew 2.6 percent with the same month of the previous year. Russia`s economy will expand 3.5 percent this year, exceeding a prior forecast of 3.4 percent, while consumer prices will advance 7 percent, Deputy Economy Minister Andrei Klepach said. The ministry raised the inflation forecast for this year from 5 percent to 6 percent, which is still the central bank`s estimate. Consumer prices will rise 5 percent to 6 percent in 2013, a range half a point higher than the ministry`s earlier forecast and Bank Rossii`s goal. Russia`s industrial output is expected to grow 3.6 percent in annual terms in 2012, up from 3.1 earlier forecast, Klepach said. Capital flight from Russia could reach $50-60 billion in 2012, he said, reiterating an earlier estimate maintaining that outflow could exceed $50 billion.