The Lastest Macroeconomic News
15.07.2012 10:35 Russia`s gross domestic product grew by up to 4% in the second quarter of 2012
Russia`s gross domestic product grew by up to 4% in the second quarter, showing resilience amid a drop in oil prices, slowing growth in China and an ongoing sovereign-debt crisis in Europe. The upbeat data come on the heels of better-than-expected results for the first quarter, when the economy grew by 4.9%. It also comes amid serious setbacks for some of Russia`s peers in the so-called BRIC group of countries: China`s economy grew at its slowest pace in three years in the second quarter, Brazil cut its key interest rate to an all-time low to fire up its sluggish growth, while on the same day India`s 2012 economic growth forecast was cut by the Asian Development Bank to 6.5% from 7%. Russia`s growth, by comparison, has been slower, but steady. The economy ministry has said it may raise this year`s forecast of 3.4% growth, and GDP growth is expected to remain at a dependable 3% to 4% for the next several years -- a slowdown from 2011. Sovereign debt remains at around 10%, way below the U.S. and many of Russia`s European neighbors, while on-year inflation ran at an all-time low of 3.6% in April and May. The country also has around $150 billion stashed away in a pair of windfall oil-wealth funds to help buoy the economy in case of a crisis. So far, the big driver has been an 11% jump in government spending, as well as consumer spending helped along by low inflation and a rising investment as political uncertainty dissipated after President Vladimir Putin`s convincing election victory in March. A nearly free-floating ruble helped cushion the economy from a more than 25% drop in oil prices -- a policy that would have serves Russia well in 2008, when the central bank spent more than $200 billion in reserves defending the country`s currency. To be sure, Russia`s road ahead is far from smooth. On-year inflation jumped to 5% as of July 9 on the back of a hike in utility tariffs and a surge in food prices, which is likely to crimp consumer spending going forward. With elections over and the global economic picture cloudy, the government may choose to delay promised spending or cut it altogether, economists said.
14.07.2012 12:03 China`s economy expanded 7.6 percent year-on-year in the second quarter of 2012
China`s economy expanded 7.6 percent year-on-year in the second quarter of 2012, slowing from 8.1 percent in the first quarter, the National Bureau of Statistics said. The figure, which marked the sixth consecutive quarter of decline, revealed the slowest growth pace since the first quarter of 2009 and was within market expectation of below 8 percent. On a quarterly basis, the country`s economy grew 1.8 percent in the second quarter, NBS spokesman Sheng Laiyun said at a press conference. According to preliminary statistics, the country`s GDP grew 7.8 percent year-on-year to reach 22.71 trillion yuan ($3.6 trillion) during the first half, Sheng said. Although the economic growth rate continued to slow in the second quarter, it was "rather good" compared with developed nations and other emerging economies, Sheng noted. Given the sluggish external market and global economic woes, China lowered its full-year growth target for 2012 to 7.5 percent in early March, after its economy grew 9.2 percent in 2011 from the previous year. Retail sales increased 14.4 percent from one year earlier in the first half, slower than the 14.8-percent growth registered in the first quarter. Fixed-asset investment, one of the principal drivers of China`s economy, grew 20.4 percent year-on-year to 15.07 trillion yuan. The growth rate moderated by 0.5 percentage point compared to that in the first quarter, and was down 5.2 percentage points from the same period last year. Official data showed that investment in the property sector, which directly accounts for about 13 percent of gross domestic product, rose 16.6 percent year-on-year in the first half, down from 32.9 percent last year. The country`s inflation eased to a 29-month low of 2.2 percent in June, leaving the government ample room to introduce more pro-growth measures to boost the slowing economy.
10.07.2012 18:43 The UK economy likely contracted for a third straight quarter in the three months to June
The UK economy likely contracted for a third straight quarter in the three months to June, deepening the country`s recession, a think-tank said. The economic performance was distorted by the additional public holiday to celebrate Queen Elizabeth II`s Diamond Jubilee, and underlying growth was more robust than the data suggest, the National Institute of Economic Research said. NIESR estimates gross domestic product contracted 0.2% in the second quarter, compared with a 0.3% drop in the first quarter of the year. The UK economy is in recession, defined by most economists as two consecutive quarters of contraction. GDP shrank 0.3% in both the first quarter of 2012 and fourth quarter of last year, compared with the previous period, according to official data from the Office for National Statistics. Year-over-year UK Industrial Production fell by 1.6% in May, following a 2.0% drop in April, National Statistics informed. This is a more positive result that the forecasted 2.1% decrease. UK Industrial Production rose by 1% between April 2012 and May 2012, in comparison with the 0.4% decline registered between March 2012 and April 2012 and against expectations of a 0.2% drop. On an annual basis UK Manufacturing Production fell by 1.7% in May, after decreasing 1.5% in April and above expectations of a 1.9% decline. Between April 2012 and May 2012 UK Manufacturing Production rose 1.2%, following a 0.8% drop between March 2012 and April 2012 and exceeding market consensus of 0.1% growth. The UK`s trade gap narrowed in May, helped by a boost in exports. The trade deficit - a measure of how much imports exceed exports - fell to £2.7bn, compared with £4.1bn in April, according to figures from the Office for National Statistics. The seasonally adjusted volume of exports was 6.6% higher, while imports rose 1%. The goods deficit was £8.4bn, compared to £9.7bn in April, while services showed an unchanged surplus of £5.6bn.
04.07.2012 12:21 The IMF lowered its 2012 and 2013 GDP forecast for the U.S. economy
The International Monetary Fund lowered its 2012 GDP forecast for the U.S. economy on July 3th to 2 percent from an already low 2.1 percent. Ironically, the IMF said that the Barack Obama Administration may be slicing its own throat by shrinking the government payroll, adding to a lackluster job market and slower growth. They warned that Washington was slicing the deficit too fast for the weak economy. Moreover, the economy was under threat from the pre-programmed “fiscal cliff” combination of sharp spending cuts and tax increases at the year-end, and a worsening of the eurozone crisis. An IMF team, led by Gian Maria Milesi-Ferretti, Assistant Director of the Western Hemisphere Department, met with Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and other senior U.S. officials from May 21 to July 2 to conduct the annual review. “The United States remains vulnerable to contagion from an intensification of the euro area debt crisis, which would be transmitted mainly via a generalized increase in risk aversion and lower asset prices, as well as from trade channels” IMF Managing Director Christine Lagarde said during a press conference in Washington, D.C. The IMF said in a statement on its website that it expects U.S. growth to remain modest til 2014 due to a weak housing market, the expiration of fiscal stimulus measures, and continued low global demand for U.S. goods and services, particularly in Europe. As a result, the U.S. economy is currently projected to grow by 2,25 percent in 2013.
03.07.2012 11:56 Official unemployment in Russia went down by 4.4% in June and now equals 1.14mln people
Official unemployment in Russia went down by 4.4% in June and now equals 1.14mln people, the Ministry of Labour and Social Security press-service reported. In June, the number of the unemployed dropped in 81 out of 83 regions of the country. According to the Russian Federal State Statistics Service, in May the total unemployment in Russia equalled 4.1mln people, which is 5.4% of the economically active population - the lowest level in at least 13 years. That`s less than the 5.7 percent median forecast of 12 economists in a Bloomberg survey. That`s less than the 5.7 percent median forecast of 12 economists in a Bloomberg survey. Retail sales grew 6.8 percent from a year earlier in May, the statistics service said. That`s quicker than April`s 6.4 percent advance, which was the slowest pace in nine months, and more than the 6.1 percent median estimate of 15 economists in a Bloomberg survey. Real wages grew 11.1 percent and real disposable incomes rose 3.6 percent in May, compared with 9.6 percent and 2.7 percent median estimates in two Bloomberg polls. Fixed-capital investment advanced 7.7 percent compared with 7.8 percent in April, beating the 6.9 percent median forecast in a separate Bloomberg survey. The government reduced its projection for economic growth this year to 3.4 percent from 3.7 percent, saying investment will be weaker than initially estimated.
28.06.2012 15:47 Fitch revised down it world GDP forecast by 0.1 point for both 2012 and 2013
The latest economic forecasts from rating agencies Standard & Poor`s and Fitch show the latter remains more optimistic about U.S. economic growth than its larger rival, especially for next year. Fitch released for the first time its GDP projection for 2014, expecting the U.S. economy to grow at a pace of 3.0%, slightly more than the 2.9% expected by Standard & Poor`s. The gap between the two agencies` GDP projections is slightly wider for this year: 2.2% for Fitch and 2.0% for S&P. But the largest divergence is for 2013, when the U.S. GDP growth rate is expected to reach 2.1% by S&P and 2.6% by Fitch`s estimate. In its Global Economic Outlook, Fitch revised down it world GDP forecast by 0.1 point for both 2012 and 2013, led by downward revisions in the euro zone but even more so -- for 2012 -- by emerging markets. The latter are losing steam, the rating agency said, expecting BRICs -- Brazil, Russia, India and China -- to grow at a pace of 6.0% this year and 6.6%, revised down by 0.3 point, and 6.6% in 2013, which was unrevised. Even as emerging markets growth is still expected to outpace that of major advanced economies by a significant margin over the next two years, "The vulnerabilities of future BRICs growth to domestic and global shocks have increased," Fitch said. In the eurozone, GDP is expected to decline this year by 0.4% before recovering 0.9% in 2013, both revised down 0.2 point. "Financial tension has resurfaced in the eurozone and the negative impact on GDP growth will be significant," Fitch said. Fitch`s global growth forecast is 2.2% for 2012 and 2.8% in 2013, compared with 2.3% and 2.9% in the previous Global Economic Outlook. In the U.S., noting the recent slowdown in the job market signaling weaker business sentiment, Fitch expects it "to be offset by continued resilience in consumer spending." For 2012 and 2013, Fitch has kept its U.S. growth forecast unchanged at 2.2% and 2.6% respectively, and projects and average growth of 3.0% in 2014. Turning to monetary policy in major advanced economies, Fitch said record low interest rates are likely to stay in place through mid-2013, warning that "The impact of further monetary stimulus would be doubtful given the already minimal yields of safe haven assets at longer maturity." Standard & Poor`s expects the U.S. GDP to grow at a pace of 2.0% this year, 2.1% in 2013, 2.9% in 2014 and 3.4% in 2015. It does not expect the unemployment rate to fall below 8% before 2014, with the improvement accelerating the following year to 7.1%. Standard & Poor`s remains the most pessimistic of the Big Three, as Moody`s sees U.S. real GDP rate rising to 2.6% next year from 2.3% this year, slightly more than Fitch`s 2.2% forecast. However, Moody`s forecasts included in its May 15 Credit Opinion refer to fiscal years.
22.06.2012 13:43 Germany`s Ifw think tank raised its 2012 growth forecast for Europe`s largest economy
Germany`s Ifw think tank raised its 2012 growth forecast for Europe`s largest economy by 0.2 percentage points to 0.9 percent due to low interest rates but cut its 2013 forecast, saying the euro zone debt crisis had dampened prospects. The Kiel-based Institute for World Economy (IfW) said that the crisis was having a negative impact on business sentiment and was reducing investment. It added however that this had not substantially altered the outlook for a strong increase in production this year. The German economy grew by 0.5 percent in the first quarter but the IfW said its growth dynamics would be weaker in the rest of the year. The institute downgraded its forecast for 2013 gross domestic product by 0.2 percentage points to 1.7 percent. The institute said the benefits to the German economy from low interest rates would feed through even more in 2013 as long as the euro zone crisis did not worsen further. Companies will invest more in equipment, while private consumption will benefit from the good outlook on the labour market, the institute said. The IfW also said exports would gradually pick up, especially as the economy in Germany`s trading partners recovers. But it warned that growth in exports would not be significant and that foreign trade overall would slow down Germany`s economic expansion as imports increased more quickly.
19.06.2012 12:09 Russia`s GDP grew at an annual rate of 4 percent in the first quarter of 2012
Russia`s gross domestic product grew at an annual rate of 4 percent in the first quarter of 2012, down from of the 4.9 percent estimate reported by the Federal Statistics Service Rosstat, according to data on the government`s website. “In the first quarter of 2012, GDP amounted to 12.869 trillion rubles [$402 billion] and expanded by 4 percent from the same period last year,” the data said. In mid-May, Rosstat reported Russia`s GDP had expanded 4.9 percent on an annual basis in January-March 2012, exceeding the 4 percent initial estimate of Russia`s Economic Development Ministry. According to Rosstat data, Russia`s GDP grew 4.3 percent last year, with a first quarter rise of four percent year-on-year. Russia`s industrial production grew 3.4 percent year-on-year from January to May 2012, the Federal Statistics Service (Rosstat) reported. Russia`s industrial output growth accelerated to 1 percent in May from 0.1 percent in April, excluding seasonal factors, Rosstat said. Output in the mining sector increased by 2.2 percent in May 2012 after a 5 percent fall in April. Production in the manufacturing industries grew by 6 percent in May compared to the previous month after a 2.5 percent decrease from March to April. Russia`s gross domestic product grew at an annual rate of 4 percent in the first quarter of 2012, matching its growth in the same period last year.
01.06.2012 19:41 US GDP up 1.9% in first quarter of 2012, revised lower
The U.S. economy ran into a deeper soft patch in the first quarter than initially estimated, a government report showed. The Commerce Department estimated that the economy grew at a 1.9% pace in the first quarter, slower than the 2.2% rate initially reported. This is down from a 3.0% growth rate of real gross domestic product, the output of goods and services produced in the U.S., in the fourth quarter. The figures are seasonally adjusted and adjusted for price changes. The revisions come from more complete data than was available at the first estimate. Economists surveyed by MarketWatch had been expecting a downward revision to a 1.8% rate. See comprehensive MarketWatch economic calendar. Economists were already disappointed with the first quarter even before the downward revision. “The takeaway from this report is simply that the economy has been unable to sustain the burst of momentum in the fourth quarter,” said Millan Mulraine, economist at TD Securities. “While the recovery has remained largely on track, it continues to struggle to generate sufficient positive momentum in a sustained manner to make any meaningful progress in absorbing the significant amount of slack in the economy,” he added. Economists are forecasting slightly stronger growth — about 2.2% on an annualized basis — in the second quarter ending June 30. The economy is slowly improving, analysts said, but remains held back by too much consumer indebtedness, a weak housing market, and renewed uncertainty over the mix of tax and spending policies that will be needed to trim the federal deficit. “As has been true throughout the recovery to date, the current expansion is neither as robust as optimists may hope nor as vulnerable as pessimists may fear,” said economists at Royal Bank of Scotland ahead of the GDP report.
15.05.2012 17:40 GDP remained stable in both the euro area (EA17) and the EU27 during the first quarter of 2012
GDP remained stable in both the euro area (EA17) and the EU27 during the first quarter of 2012, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2011, growth rates were -0.3% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP remained stable in the euro area and increased by 0.1% in the EU27 in the first quarter of 2012, after +0.7% and +0.8% respectively in the previous quarter. In March 2012 compared with February 2012, seasonally adjusted industrial production fell by 0.3% in the euro area (EA17) and by 0.4% in the EU27. In February production rose by 0.8% and 0.4% respectively. In March 2012 compared with March 2011, industrial production dropped by 2.2% in the euro area and by 1.9% in the EU27.