The briefing released on 24 August 2012, reveals among other things that drought in large parts of the United States is pushing up world food prices, that emerging markets ease monetary policy to stimulate growth and that the debt crisis in the eurozone remains a major source of uncertainty.
Global economic growth is slowing as manufacturing production stagnates in many regions. Financial markets have declined sharply due to ongoing sovereign debt problems in Europe and weak growth prospects in the US and Europe. Food shortages are causing humanitarian crises for millions in Africa and Haiti.
FINCOR Weekly Market Perspectives (21 JAN 2013)João Pinto
The document summarizes key economic news and data from the past week. It reports that US retail sales rose more than expected in December despite fiscal cliff concerns. Industrial production also increased while inflation remained muted. Consumer confidence fell to a one-year low. Bank lending continues to expand. The Beige Book pointed to subdued but positive growth across the US. Brazil kept interest rates unchanged.
The Swedish economy is shifting into higher gear with strong domestic demand fueling growth. Private consumption and investments are increasing significantly, supported by robust household finances and record low mortgage rates. Exports are also recovering after years of stagnation, though they remain below pre-crisis levels. GDP growth is forecast to be 2.7% in 2014, up from 1.6% last year, but will moderate to 2.4% in 2015 as monetary and fiscal policy tightens. Inflation remains well below the Riksbank's target, forcing them to cut the repo rate further in July.
This is Western Union Business Solutions October edition of the global currency outlook, providing you and your business with invaluable market insight and visibility of key risk events.
The Swedish Economy No.2 - March 29, 2012 Swedbank
The Swedish economy contracted significantly in the fourth quarter of 2011 due to declining external demand, but signs of improvement emerged in early 2012. While GDP growth for 2010 was revised upward, growth in 2011 was weaker than previously reported. Lower productivity growth and household savings than estimated earlier pose challenges for economic analysis and policymaking.
This monthly briefing highlights that anaemic economic recovery is accompanied by tame inflation in developed economies; that GDP growth is stronger than expected in the United States and that currencies in some emerging economies are under pressure again.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
Ekonomiska Utsikter, Nordea Bank, juni 2013Nordea Bank
The document provides an economic outlook for the Nordic countries. It notes that while global growth is slow, the Nordic economies are gradually improving. Sweden's economy is divided, with weak industry but strong household finances supporting consumption. While current growth is slow, the forecast predicts a modest recovery later in 2013 and 2014 as exports and investments increase. The Swedish government plans additional stimulus measures totaling around 50 billion Swedish Krona through 2014 to support the economy.
Global economic growth is slowing as manufacturing production stagnates in many regions. Financial markets have declined sharply due to ongoing sovereign debt problems in Europe and weak growth prospects in the US and Europe. Food shortages are causing humanitarian crises for millions in Africa and Haiti.
FINCOR Weekly Market Perspectives (21 JAN 2013)João Pinto
The document summarizes key economic news and data from the past week. It reports that US retail sales rose more than expected in December despite fiscal cliff concerns. Industrial production also increased while inflation remained muted. Consumer confidence fell to a one-year low. Bank lending continues to expand. The Beige Book pointed to subdued but positive growth across the US. Brazil kept interest rates unchanged.
The Swedish economy is shifting into higher gear with strong domestic demand fueling growth. Private consumption and investments are increasing significantly, supported by robust household finances and record low mortgage rates. Exports are also recovering after years of stagnation, though they remain below pre-crisis levels. GDP growth is forecast to be 2.7% in 2014, up from 1.6% last year, but will moderate to 2.4% in 2015 as monetary and fiscal policy tightens. Inflation remains well below the Riksbank's target, forcing them to cut the repo rate further in July.
This is Western Union Business Solutions October edition of the global currency outlook, providing you and your business with invaluable market insight and visibility of key risk events.
The Swedish Economy No.2 - March 29, 2012 Swedbank
The Swedish economy contracted significantly in the fourth quarter of 2011 due to declining external demand, but signs of improvement emerged in early 2012. While GDP growth for 2010 was revised upward, growth in 2011 was weaker than previously reported. Lower productivity growth and household savings than estimated earlier pose challenges for economic analysis and policymaking.
This monthly briefing highlights that anaemic economic recovery is accompanied by tame inflation in developed economies; that GDP growth is stronger than expected in the United States and that currencies in some emerging economies are under pressure again.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
Ekonomiska Utsikter, Nordea Bank, juni 2013Nordea Bank
The document provides an economic outlook for the Nordic countries. It notes that while global growth is slow, the Nordic economies are gradually improving. Sweden's economy is divided, with weak industry but strong household finances supporting consumption. While current growth is slow, the forecast predicts a modest recovery later in 2013 and 2014 as exports and investments increase. The Swedish government plans additional stimulus measures totaling around 50 billion Swedish Krona through 2014 to support the economy.
The document provides an economic outlook for Sweden and the Baltic countries from Swedbank. It summarizes that global growth is expected to be modest in 2012 but improve slightly in 2013. In Sweden and the Baltic countries, GDP growth in 2012 will range from 0.5-3.3% and increase to 2.1-4.3% in 2013. Unemployment is forecast to remain high but fall gradually. Risks include further instability in the euro area and volatility in commodity prices.
The document summarizes two possible scenarios for Japan's economy following Prime Minister Shinzo Abe's announcement to dissolve parliament and hold new elections in December 2014. Scenario 1 predicts that Abe's economic policies (Abenomics) could be successful in stimulating growth if he remains in power after the election. Scenario 2 suggests that Japan's recession may continue if the election is costly and fails to build policy consensus, further weakening the economy and potentially forcing Abe to resign. Both scenarios discuss the challenges of Japan's large public debt and aging population.
Indonesia's exports and imports both declined in January 2012 on a month-over-month basis but still grew compared to January 2011. Exports fell 9.3% while imports dropped 11.6% in January 2012. Japan was Indonesia's largest export partner for non-oil and gas products, while China's share of imports was the highest. The report forecasts slightly lower exports and imports in February 2012 but a wider trade balance.
The document summarizes the state of the global economy in January 2011. It finds that while the global recovery continues, growth prospects have dimmed slightly from 2010's strong rebound. Rising commodity prices and inflation are creating risks. Inflation is a growing threat, forcing companies to cut costs and limiting job and economic growth. Emerging economies continue to power the recovery, while developed nations struggle with debt and budget consolidation.
The document discusses China's growing dominance over the global economic stage and the impact of China's economic slowdown and currency depreciation. It notes that China's economic troubles in 2015 caused stock market declines, currency volatility, and pressure on commodity exporters around the world. The rest of the global economy will continue to feel significant impacts even as China's economy gradually slows in the coming years. With China's increasing size in the global economy, its health will be a major determinant of overall global economic growth and conditions over the coming decades.
The document provides an analysis of emerging markets and currency forecasts for selected countries. Key points include:
- Emerging market currencies declined in June due to decreased US dollar liquidity and slowing China growth but some currencies may now be undervalued.
- The US Federal Reserve did not taper quantitative easing as expected, lessening concerns about a rapid cutback in stimulus.
- Currencies of countries with active central banks and large reserves like India and Brazil are viewed positively, while Turkey's currency is viewed negatively due to a weakening current account and battle with inflation.
- Country analyses and 3-month currency forecasts are provided for Russia, Poland, Turkey, and South Africa. Russia and Turkey face economic challenges
RICS UK Economy and Property Market Chart Book - February 2016 (1)George Marcou
The document provides an economic commentary and analysis of the UK property market. It notes that global growth concerns continue to rattle financial markets and weigh on the outlook. While the UK economy expanded 2.2% in 2015, growth slowed in the second half of the year. The labor market added jobs recently but substantial slack remains. Commercial property demand is rising, particularly for industrial space, while housing transaction activity increased ahead of an upcoming tax change.
Energy & Commodities, No.4, 15 April 2011 Swedbank
- Swedbank's Total Commodity Price Index rose in March to its highest level since August 2008, driven by a substantial increase in oil prices. Excluding energy, the price index fell for the first time in over half a year.
- Investments in precious metals like gold and silver have seen renewed interest due to high oil prices and inflation concerns. Gold prices have risen to new record levels.
- Metal prices slowed in March, with nickel, zinc and copper declining the most, though prices remain high. Slower Chinese commodity imports and Japanese production cuts contributed to the decline.
The document summarizes the Ma Foi Randstad Employment Trends Survey (MEtS) for the fourth quarter of 2011 and projected trends for the first quarter of 2012. The survey polled 639 companies across 13 sectors to assess employment trends in the organized sector. Key findings included expected increases in employment in sectors such as financial services, IT, and healthcare, while manufacturing saw more muted growth. The report analyzed trends by sector, salary increases, new hire experience and functions.
Reflecting a positive hiring outlook, the organized sector in India is expected to create about 1.6 million new jobs in the year 2012, as per the latest results of a survey from HR firm Ma Foi Randstad..
- Commodity prices, including agricultural, metals, and oil prices declined in early 2013 due to weak global demand and increased supplies. Global trade growth barely expanded over the first quarter of 2013 and slowed below 1% due to sluggish global demand.
- The US economy grew at an annualized rate of 2.5% in the first quarter, led by private consumption and investment. Unemployment fell slightly. Japan's economy exhibited some growth in the first quarter but levels remained below pre-crisis levels.
- The ECB cut interest rates and maintained unconventional monetary policies to stimulate the weak eurozone economy, which remains in recession. Economic growth was subdued or declined across many developed and emerging
The document provides economic updates from Spain and Europe. For Spain, GDP growth is projected to be 3.1% in 2017 before declining in 2018-2019. Employment and new job contracts increased significantly in May 2017. Small and medium enterprises are expected to generate over 500,000 new jobs from 2017-2018. In Europe, GDP increased 0.6% in Q1 2017 in both the Eurozone and EU28. The ECB predicts GDP growth of 1.9% in the Eurozone in 2017.
Swedbank's economic outlook report analyzes the economies of Sweden and the Baltic countries. It finds that while growth has been stronger than expected in 2012, it is expected to slow for the rest of the year due to a cooling global economy and recession in the euro area. Growth is projected to pick up again in 2014 as the global outlook gradually improves. Unemployment is expected to remain elevated, especially in Sweden. Downside risks to the outlook include a worsening of the euro area crisis or a hard economic landing in major economies like China.
The Estonian economy grew strongly in the first quarter of 2011, reaching 8% growth driven by strong export sector performance and increased investment activity. Inflation remained high at 5.4% in April due to increasing commodity prices globally. The unemployment rate rose slightly to 14.4% in the first quarter due to rising economic activity, while employment growth was strong at 6.8%. Real wages continued to decline, allowing competitiveness to improve but weakening household purchasing power. Overall, the Estonian economy is growing further but high inflation continues to impact households.
Ivo Pezzuto - FEDERAL RESERVE'S RATE RISE. COMING SOON? The Global Analyst Se...Dr. Ivo Pezzuto
The document summarizes factors contributing to increased volatility in global markets in September 2015, including the potential for the Federal Reserve to raise interest rates. While the US economy has improved, global risks from China's economic slowdown and falling commodity prices pose challenges. It is unlikely the Federal Reserve will raise rates in September due to this increased turbulence, though a rate hike by the end of 2015 or in 2016 is still possible depending on how the global situation evolves.
Whether the Great Recession has ended remains debatable in the second quarter of 2010, though many economists believe that the recession, begun in December 2007, probably ended sometime in the third or fourth quarter of 2009. Recovery also remains debatable. Fears over a double-dip
recession persist.
The Lithuanian Economy - No 9, December 2, 2011Swedbank
Industrial production in Lithuania decreased by 1.3% in October compared to the previous year, indicating stagnation in the industry sector. However, retail trade growth remained resilient at 9.5% higher than the previous year. Unemployment has been decreasing while wages have grown only modestly. Deteriorating consumer confidence and expectations of weaker external demand signal that industrial production and domestic spending growth will slow in the coming months.
- Recent policy initiatives in Japan, the US, and Europe have improved the situation in global financial markets, but uncertainties remain high.
- Japan implemented a large stimulus package and increased inflation targets, significantly depreciating the yen against other currencies.
- The US Federal Reserve set a numerical target of 6.5% unemployment for the first time and continues monetary easing.
- Major central banks adopted open-ended bond purchasing programs to anchor expectations, though this strategy raises some concerns.
Published by DESA’s Development Policy and Analysis Division, the September issue of the Monthly Briefing on the World Economic Situation and Prospects covers recent events affecting the world economy such as the connection between slowing growth in Europe and weaker exports from Asia. The recessionary environment in Europe is reducing growth prospects for some developing economies as it weakens demand for those economies’ exports. This has been felt most strongly in East and South Asia, where exports to the EU are down by 7.2 per cent year on year, and Western Asia (including Iran) where exports are down 18 per cent.
For more information: http://www.un.org/en/development/desa/policy/index.shtml
The document provides an economic outlook for Sweden and the Baltic countries from Swedbank. It summarizes that global growth is expected to be modest in 2012 but improve slightly in 2013. In Sweden and the Baltic countries, GDP growth in 2012 will range from 0.5-3.3% and increase to 2.1-4.3% in 2013. Unemployment is forecast to remain high but fall gradually. Risks include further instability in the euro area and volatility in commodity prices.
The document summarizes two possible scenarios for Japan's economy following Prime Minister Shinzo Abe's announcement to dissolve parliament and hold new elections in December 2014. Scenario 1 predicts that Abe's economic policies (Abenomics) could be successful in stimulating growth if he remains in power after the election. Scenario 2 suggests that Japan's recession may continue if the election is costly and fails to build policy consensus, further weakening the economy and potentially forcing Abe to resign. Both scenarios discuss the challenges of Japan's large public debt and aging population.
Indonesia's exports and imports both declined in January 2012 on a month-over-month basis but still grew compared to January 2011. Exports fell 9.3% while imports dropped 11.6% in January 2012. Japan was Indonesia's largest export partner for non-oil and gas products, while China's share of imports was the highest. The report forecasts slightly lower exports and imports in February 2012 but a wider trade balance.
The document summarizes the state of the global economy in January 2011. It finds that while the global recovery continues, growth prospects have dimmed slightly from 2010's strong rebound. Rising commodity prices and inflation are creating risks. Inflation is a growing threat, forcing companies to cut costs and limiting job and economic growth. Emerging economies continue to power the recovery, while developed nations struggle with debt and budget consolidation.
The document discusses China's growing dominance over the global economic stage and the impact of China's economic slowdown and currency depreciation. It notes that China's economic troubles in 2015 caused stock market declines, currency volatility, and pressure on commodity exporters around the world. The rest of the global economy will continue to feel significant impacts even as China's economy gradually slows in the coming years. With China's increasing size in the global economy, its health will be a major determinant of overall global economic growth and conditions over the coming decades.
The document provides an analysis of emerging markets and currency forecasts for selected countries. Key points include:
- Emerging market currencies declined in June due to decreased US dollar liquidity and slowing China growth but some currencies may now be undervalued.
- The US Federal Reserve did not taper quantitative easing as expected, lessening concerns about a rapid cutback in stimulus.
- Currencies of countries with active central banks and large reserves like India and Brazil are viewed positively, while Turkey's currency is viewed negatively due to a weakening current account and battle with inflation.
- Country analyses and 3-month currency forecasts are provided for Russia, Poland, Turkey, and South Africa. Russia and Turkey face economic challenges
RICS UK Economy and Property Market Chart Book - February 2016 (1)George Marcou
The document provides an economic commentary and analysis of the UK property market. It notes that global growth concerns continue to rattle financial markets and weigh on the outlook. While the UK economy expanded 2.2% in 2015, growth slowed in the second half of the year. The labor market added jobs recently but substantial slack remains. Commercial property demand is rising, particularly for industrial space, while housing transaction activity increased ahead of an upcoming tax change.
Energy & Commodities, No.4, 15 April 2011 Swedbank
- Swedbank's Total Commodity Price Index rose in March to its highest level since August 2008, driven by a substantial increase in oil prices. Excluding energy, the price index fell for the first time in over half a year.
- Investments in precious metals like gold and silver have seen renewed interest due to high oil prices and inflation concerns. Gold prices have risen to new record levels.
- Metal prices slowed in March, with nickel, zinc and copper declining the most, though prices remain high. Slower Chinese commodity imports and Japanese production cuts contributed to the decline.
The document summarizes the Ma Foi Randstad Employment Trends Survey (MEtS) for the fourth quarter of 2011 and projected trends for the first quarter of 2012. The survey polled 639 companies across 13 sectors to assess employment trends in the organized sector. Key findings included expected increases in employment in sectors such as financial services, IT, and healthcare, while manufacturing saw more muted growth. The report analyzed trends by sector, salary increases, new hire experience and functions.
Reflecting a positive hiring outlook, the organized sector in India is expected to create about 1.6 million new jobs in the year 2012, as per the latest results of a survey from HR firm Ma Foi Randstad..
- Commodity prices, including agricultural, metals, and oil prices declined in early 2013 due to weak global demand and increased supplies. Global trade growth barely expanded over the first quarter of 2013 and slowed below 1% due to sluggish global demand.
- The US economy grew at an annualized rate of 2.5% in the first quarter, led by private consumption and investment. Unemployment fell slightly. Japan's economy exhibited some growth in the first quarter but levels remained below pre-crisis levels.
- The ECB cut interest rates and maintained unconventional monetary policies to stimulate the weak eurozone economy, which remains in recession. Economic growth was subdued or declined across many developed and emerging
The document provides economic updates from Spain and Europe. For Spain, GDP growth is projected to be 3.1% in 2017 before declining in 2018-2019. Employment and new job contracts increased significantly in May 2017. Small and medium enterprises are expected to generate over 500,000 new jobs from 2017-2018. In Europe, GDP increased 0.6% in Q1 2017 in both the Eurozone and EU28. The ECB predicts GDP growth of 1.9% in the Eurozone in 2017.
Swedbank's economic outlook report analyzes the economies of Sweden and the Baltic countries. It finds that while growth has been stronger than expected in 2012, it is expected to slow for the rest of the year due to a cooling global economy and recession in the euro area. Growth is projected to pick up again in 2014 as the global outlook gradually improves. Unemployment is expected to remain elevated, especially in Sweden. Downside risks to the outlook include a worsening of the euro area crisis or a hard economic landing in major economies like China.
The Estonian economy grew strongly in the first quarter of 2011, reaching 8% growth driven by strong export sector performance and increased investment activity. Inflation remained high at 5.4% in April due to increasing commodity prices globally. The unemployment rate rose slightly to 14.4% in the first quarter due to rising economic activity, while employment growth was strong at 6.8%. Real wages continued to decline, allowing competitiveness to improve but weakening household purchasing power. Overall, the Estonian economy is growing further but high inflation continues to impact households.
Ivo Pezzuto - FEDERAL RESERVE'S RATE RISE. COMING SOON? The Global Analyst Se...Dr. Ivo Pezzuto
The document summarizes factors contributing to increased volatility in global markets in September 2015, including the potential for the Federal Reserve to raise interest rates. While the US economy has improved, global risks from China's economic slowdown and falling commodity prices pose challenges. It is unlikely the Federal Reserve will raise rates in September due to this increased turbulence, though a rate hike by the end of 2015 or in 2016 is still possible depending on how the global situation evolves.
Whether the Great Recession has ended remains debatable in the second quarter of 2010, though many economists believe that the recession, begun in December 2007, probably ended sometime in the third or fourth quarter of 2009. Recovery also remains debatable. Fears over a double-dip
recession persist.
The Lithuanian Economy - No 9, December 2, 2011Swedbank
Industrial production in Lithuania decreased by 1.3% in October compared to the previous year, indicating stagnation in the industry sector. However, retail trade growth remained resilient at 9.5% higher than the previous year. Unemployment has been decreasing while wages have grown only modestly. Deteriorating consumer confidence and expectations of weaker external demand signal that industrial production and domestic spending growth will slow in the coming months.
- Recent policy initiatives in Japan, the US, and Europe have improved the situation in global financial markets, but uncertainties remain high.
- Japan implemented a large stimulus package and increased inflation targets, significantly depreciating the yen against other currencies.
- The US Federal Reserve set a numerical target of 6.5% unemployment for the first time and continues monetary easing.
- Major central banks adopted open-ended bond purchasing programs to anchor expectations, though this strategy raises some concerns.
Published by DESA’s Development Policy and Analysis Division, the September issue of the Monthly Briefing on the World Economic Situation and Prospects covers recent events affecting the world economy such as the connection between slowing growth in Europe and weaker exports from Asia. The recessionary environment in Europe is reducing growth prospects for some developing economies as it weakens demand for those economies’ exports. This has been felt most strongly in East and South Asia, where exports to the EU are down by 7.2 per cent year on year, and Western Asia (including Iran) where exports are down 18 per cent.
For more information: http://www.un.org/en/development/desa/policy/index.shtml
- The US Congress failed to agree on deficit reduction, triggering automatic spending cuts of $1.2 trillion equally split between defense and non-defense programs. This is estimated to reduce the fiscal deficit but also cut GDP and jobs.
- Weaknesses persist in the EU as Italy's election raised doubts over reforms and GDP declined more than expected in many countries in Q4 2012. France is expected to miss its deficit target.
- The Japanese yen sharply depreciated against the dollar and euro, worrying other Asian countries about competitive currency devaluations.
The document provides an economic review and outlook covering various regions and countries. It discusses slowing global economic growth but reduced risks. Foreign direct investment declined globally in 2012 but some countries like Africa saw growth. The US Fed announced a possible tapering of quantitative easing which initially caused market selloffs but markets recovered. Eurozone risks were lowered by ECB actions though risks remain. Germany's economy slowed due to weakening Chinese demand. China's growth declined for two successive quarters due to weak overseas demand.
This document summarizes the Reserve Bank of India's 2012-13 Monetary Policy Statement. It discusses the global and domestic macroeconomic environment, providing outlooks for growth, inflation, and monetary aggregates in India. Key points include: moderating global growth concerns, high inflation and slowing growth in India, projections for 7.3% GDP growth and lower inflation in 2012-13, and measures to address high fiscal and current account deficits. The statement covers monetary policy stances and outlines regulatory and developmental policies.
First Quarter Review of Monetary Policy 2012-13Ankur Pandey
The Reserve Bank of India document provides an overview of the state of the global and domestic economies. Globally, growth is slowing down across major advanced and emerging economies. In the euro area, risks remain from the fiscal and financial stability issues. Domestically, GDP growth is decelerating while inflation remains high. Monsoon rainfall so far has been below average.
This article about study of current situation of economy and pandemic impact on global economy. How long it will take to recover with the quote of GDP growth and Service PMI of key nations.
- The world economy continues to struggle in recovering from the 2008 global financial crisis, with growth projected to reach only 2.4% in 2013.
- Weakness in major developed economies, particularly in Europe and Japan, are dragging down the global economy, while some emerging markets are also slowing.
- Significant economic risks remain, including further deterioration of the eurozone crisis, uncertainty around US fiscal policy, and the potential for economic hard landings in large emerging economies like China. More proactive policy actions are needed to address these risks and support stronger global growth.
1. The document analyzes economic indicators and recovery efforts in various countries in response to the COVID-19 pandemic. It finds signs of partial, uneven recovery as countries reopen and consumer spending increases but long-term impacts remain uncertain.
2. Purchasing Managers' Index data shows a sharper than expected recovery in many countries in May, though growth remains below pre-pandemic levels. Services sectors are recovering more slowly than others.
3. While stimulus measures have fueled initial rebounds, long-term recovery depends on resolving health uncertainties and restarting sectors like education and international travel that remain restricted. Full economic stability may not return until late 2021.
De acuerdo con el último informe difundido por Crédito y Caución, las insolvencias de muchas de las economías europeas se mantendrán muy por encima de los niveles de 2007 en 2014 y 2015.
El panorama económico mundial se ha deteriorado en los últimos seis meses. El ritmo de crecimiento en la zona euro y China ha sido más débil de lo esperado y la intensificación de la crisis geopolíticas referentes a Rusia y al Estado Islámico en Oriente Medio han minado la confianza internacional.
The global economy is expected to continue expanding at a moderate pace over the coming two years, but policymakers must ensure that instability in financial markets and underlying fragility in major economies are not allowed to derail growth, according to the OECD’s latest Economic Outlook.
- Emerging economies face renewed financial turbulence as their currencies have depreciated sharply against the U.S. dollar in January 2014.
- The U.S. economy registered robust GDP growth in the fourth quarter of 2013, growing at an annualized rate of 3.2%.
- The economic performance of developing countries in the last quarter of 2013 was heterogeneous, with some facing currency pressures and others seeing stronger than expected growth.
Macroeconomic Developments Report. September 2020Latvijas Banka
The Macroeconomic Developments Report is published on a semi-annual basis.
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
New developments cast doubts on global recovery
This monthly briefing highlights that sequestration may lead to lower growth in the United States, continuing weaknesses in the European Union, China announcing a GDP target of 7.5 per cent, while India boosts budget spending.
For more information:
http://www.un.org/en/development/desa/policy/index.shtml
This monthly briefing highlights that global manufacturing production has improved. Economic recovery is slowly strengthening in developed economies; and public fiscal stimulus programmes have been a determinant factor in economic growth in many developing countries.
For more information:
http://www.un.org/en/development/desa/policy/index.shtml
In the June / July 2014 issue of Economy Matters, we track the economic developments in the major advanced economies in Global Trends. In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on IIP, Inflation and Monsoon. Additionally, the recent Economic Survey and Railway Budget are also covered. The Sectoral spotlight for this issue is on the Warehousing Industry. In Focus of the Month, the spotlight is on Union Budget 2014-15. Special Feature discusses the importance of Chemical Industry for economic growth.
This monthly briefing highlights how the world economy is struggling to gain momentum, emerging economies facing policy dilemma in trying to stabilize currencies and the G20 meeting making a call for new measures to lift growth and create jobs.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
The document provides an economics report summarizing key events in July 2012. It discusses positive gains in stock markets in Australia and the US despite ongoing concerns around a double-dip recession, slowing growth in China, and debt issues in Europe. While the US economy shows continued slow growth, China's GDP growth slowed further. Later in the month, the ECB president signaled a strong commitment to preserve the Euro. Domestically, inflation in Australia remains low and another interest rate cut is unlikely in the near future. The report maintains its end-year forecast for the ASX200 index.
While Chinese authorities struggled to stop the decline of their stock market through monetary policies, the Fed remained hopeful that the US economy would achieve above-trend growth and inflation despite weak macroeconomic data. UK and eurozone data also pointed to subdued economic expansions, with eurozone GDP growth of just 0.3% in Q2. Financial markets were volatile in August, with US stocks shedding over 6% and commodities fluctuating sharply, as investors reacted to global economic uncertainties and China's stock market turmoil.
Today, 54 per cent of the world’s population lives in urban areas, a proportion that is expected to increase to 66 per cent by 2050. Projections show that urbanization combined with the overall growth of the world’s population could add another 2.5 billion people to urban populations by 2050, with close to 90 percent of the increase concentrated in Asia and Africa, according to a new United Nations report launched on 10 July 2014.
Millions of people’s lives have improved due to concerted global, regional, national and local efforts to achieve the Millennium Development Goals (MDGs), which serve as the foundation for the next global development agenda, according to the report launched by the Secretary-General on 7 July 2014.
For more information:
http://www.un.org/en/development/desa/publications/mdg-report-2014.html#more-873
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/08.html
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/07.html
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/06.html
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/05.html
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/04.html
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information:
http://www.un.org/en/development/desa/newsletter/desanews/2014/03.html
E-government—digital interactions between governments and people—varies greatly among and within regions, but most countries are making progress on providing greater access, according to the 2014 UN E-Government Survey launched today. The findings show that the Republic of Korea tops the global e-government ranking, and that Europe remains first among regions.
The report also shows that many countries are expanding electronic participation, utilizing more mobile and social media tools, expanding usage and making more government data available online. However, challenges remain, such as lack of resources, digital inequalities and a lack of leadership for e-government.
“E-government holds tremendous potential to improve the way that governments deliver public services and enhance broad stakeholder involvement in public service,” said Wu Hongbo, Under-Secretary-General for Economic and Social Affairs and Secretary-General for the International Conference on Small Island Developing States.
For more information: http://unpan3.un.org/egovkb#.U7HG_PldVlq
This monthly briefing highlights that financing conditions improve in euro area peripheral countries and in emerging economies, that the US economy bounces back after a difficult first quarter and that China’s first-quarter GDP growth is the slowest in two years.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
The World Youth Report 2013—Youth Migration and Development is the product of the efforts, contributions and support of many people and organizations. From the outset, the process of developing the Report involved a range of participatory
consultations designed to draw on the perspectives of youth on how migration affects them. These consultative sessions
included a five-week e-consultation process, a survey on youth migration and development, a call for visual art
illustrating the daily life experiences of young migrants as well as youth initiatives on migration and development,
and a Google+ Hangout held on 6 March 2013 to identify sustainable solutions for addressing youth migration challenges.
For more information: http://www.unworldyouthreport.org/
The global economy is expected to strengthen over the next two years, despite a downgrade of growth prospects for some developing economies and economies in transition, according to the UN World Economic Situation and Prospects (WESP) 2014 mid-year update, launched on 21 May, 2014. Global growth has been revised slightly lower from the forecasts presented in the WESP 2014. Growth of world gross product (WGP) is now projected at 2.8 per cent in 2014 and 3.2 per cent in 2015, up from 2.2 per cent in 2013. However, this pace of expansion is still low compared to the growth path before the 2008 global financial crisis.
For more information: http://www.un.org/en/development/desa/policy/wesp/index.shtml
The slides contain the detailed maps and graphs of World Fertility Patterns 2013 wall chart which presents the latest data available on indicators of fertility patterns at the national, regional and world levels.
For more information:
http://www.un.org/en/development/desa/population/publications/fertility/fertility-patterns-2013.shtml
The slides contain the detailed maps and graphs of World Contraceptive Patterns 2013 wall chart which presents the latest data available on two of the indicators under Millennium Development Goal 5 to improve maternal health: contraceptive prevalence and unmet need for family planning. Estimates of specific contraceptive methods used in major areas and sub-regions of the world are also presented.
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This monthly briefing highlights that global employment remains a challenge; the United States Federal Reserve faces challenges in adjusting its monetary policy and that financial markets in emerging economies attempted to stabilize.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
The Economic and Social Council will hold its Special high-level meeting with the World Bank, International Monetary Fund, the World Trade Organization and the United Nations Conference on Trade and Development on 14 and 15 April at the United Nations Headquarters, New York. The overall theme of the meeting will be “Coherence, coordination and cooperation in the context of financing for sustainable development and the post-2015 development agenda”.
For more information:
http://www.un.org/esa/ffd/ecosoc/springmeetings/2014/index.htm
Published by the Division for Social Policy and Development (DSPD) of UN DESA, the report places special focus on policy and disadvantaged social groups, in addition to examining the consequences of high inequality. “Much can be learnt from those countries that managed to reduce inequality even under an uncertain and volatile global environment,” said Mr. Wu Hongbo, UN DESA’s Under–Secretary-General. “The international community can play a role in providing support to policies that help reduce inequality.”
A unique contribution of the report is that it brings special attention to the disparities that are experienced by five specific social and population groups – youth, indigenous peoples, older persons, persons with disabilities and migrants – and also illustrates how such disparities intersect with and reinforce one another.
The report illustrates that growing inequalities can be brought to a stop by integrated policies that are universal in principle while paying particular attention to the needs of disadvantaged and marginalized populations. It reminds world leaders that, in addressing inequalities, policy matters.
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http://www.un.org/en/development/desa/newsletter/desanews/2014/02.html
The World Economic Situation and Prospects 2014 reports that the global economy is improving but remains vulnerable to new and old headwinds. Global economic growth is forecast to accelerate from a sluggish 2.1 per cent in 2013 to 3.0 per cent in 2014 and 3.3 per cent in 2015. The report warns of the risks associated with the upcoming unwinding of quantitative easing programs in major developed economies.
For more information: http://bit.ly/WESP
This monthly briefing highlights that the world economy is expected to improve in 2014; that unemployment rates remain a major challenge; and downside risks to the baseline scenario persist.
For more information:
http://www.un.org/en/development/desa/policy/wesp/wesp_mb.shtml
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Monthly Briefing of the World Economic Situation and Prospects No. 46
1. Monthly Briefing
World Economic Situation and Prospects
No. 46 UN/DESA 24 August 2012
Summary
Ø Drought in large parts of the United States is pushing up world food prices
Ø Emerging markets ease monetary policy to stimulate growth
Ø The debt crisis in the eurozone remains a major source of uncertainty
Global issues
Drought causing rise in food prices
The severe drought affecting much of the United States is having a damaging impact on crops. The United States Agricultural De-
partment (USDA) has downgraded its forecast for maize output by 12 per cent. Futures prices for maize have jumped by over 50
per cent since mid-June. In addition, soybean prices have increased by about 40 per cent this year, while the prices for wheat and
maize are up by about 20 per cent (see figure 1). A previous drought in the southern hemisphere affected soybean crops in Brazil
and wheat production in Australia. Moreover, in Thailand, the world’s largest rice exporter, a Government programme to purchase
domestic rice at above-market prices to boost inventory led to a reduction in exports by 45 per cent since January year on year. The
driest monsoon season in three years is also pushing up prices of rice and wheat in India. In the Russian Federation, this year’s wheat
output is expected to be 20 per cent lower than that of 2011, and grain production in Kazakhstan is forecast to fall by 48 per cent
year on year. Nonetheless, stocks remain relatively high in major producer countries as a result of much better harvests last season.
This does not apply to countries already vulnerable to food insecurity, however.
Emerging economies ease monetary policy to stimulate growth
In response to slowing domestic growth and heightened uncer- Figure 1: World market prices for selected agricultural commodities
tainty over the global outlook, monetary authorities in emerging (index of daily prices, 2 January 2012 = 100)
economies are increasingly moving towards a more supportive
150
policy stance. In July, the central banks in Brazil, China, Co-
lombia, the Philippines, the Republic of Korea, South Africa and 140 Wheat
Taiwan Province of China cut their benchmark interest rates. In Maize
130 Soyabean
doing so, authorities are trying to stimulate domestic demand
in the face of a sharper-than-expected slowdown in recent quar- 120
ters. Export sectors in emerging economies continue to suffer
110
from the crisis in the euro area and the still-sluggish demand in
the United States and Japan. With external demand weakening 100
and risks of a renewed global recession rising, investment activ-
90
ity has also lost strength in most of these economies, dragging
down GDP growth. While the recent monetary easing by central 80
May-12
July-12
June-12
April-12
August-12
January-12
March-12
February-12
banks is expected to provide some support to emerging econo-
mies in the second half of 2012, the overall policy response so far
has been relatively cautious; more decisive action may be needed
in the months ahead, including on the fiscal front. In this con- Source: International Grains Council.
text, the gradual fall in inflation in emerging economies (with
the exception of India) provides some space for policymakers.
Note to the Secretary-General prepared by the Global Economic Monitoring Unit
Development Policy and Analysis Division, Department of Economic and Social Affairs 1
Contact: Rob Vos, Director, e-mail: vos@un.org • http://www.un.org/en/development/desa/policy/index.shtml
2. The debt crisis in the eurozone remains a major source of uncertainty
Financial market tensions rose again in Europe during July and early August. The deal to allow Spanish banks to be directly recapi-
talized from European “rescue funds” aims to offload pressure on sovereign debt. However, it will take time to fulfil the require-
ment to create a new banking supervisory entity. In the meantime, bailout funds for the banking system continue to be channelled
through the Spanish Government, thus exacerbating sovereign debt concerns. The upshot is that the cost of 10-year Spanish govern-
ment bonds spiked above 7 per cent in July and early August. The ECB initially managed to calm tensions by suggesting it might
engage in a new round of purchases of selected government debt in the secondary markets. Uneasiness in financial markets returned,
however, after it became clear that the ECB would only do so after formal requests made by euro area member states for support
from the European Financial Stability Facility and the European Stability Mechanism, which might not be forthcoming given the
conditionalities attached to such support.
Developed economies
North America: growing well below its potential
The latest data showed that GDP in the United States grew by 1.5 per cent in the second quarter of 2012, a further deceleration from
the 2 per cent of the previous quarter. While private consumption and investment continued to increase at an anaemic pace, govern-
ment spending continued to decline. The worsened situation in the euro area and the uncertainties about the fiscal policy associated
with the coming election may have combined to depress the already low confidence.
Meanwhile, total non-farm payroll employment increased by 163,000 in July. This was an improvement from the previous months,
but the unemployment rate edged up slightly to 8.3 per cent nonetheless. The civilian labour force participation rate remained at a
record low of 63.7 per cent and the broadly defined unemployment rate, including underemployment, stayed at about 15 per cent.
In the aftermath of the financial crisis, the United States has experienced a sharp deterioration in public finances not only for the federal
government, but also for the state and local governments. A few cities in California filed for municipal bankruptcy recently, being con-
fronted with rising costs of pensions and unemployment benefits along with declining revenue from property and sales taxes. Meanwhile, a
recent study by the State Budget Crisis Task Force shows that state finances are short of about $4 trillion in unfunded liabilities to cover
pensions and health care for public employees. The shortfalls are partly the result of declining revenue and increasing health-care costs.
Developed Asia and the Pacific: Australia implements carbon tax
Australia put a carbon tax into effect on 1 July 2012. The tax applies to major polluters emitting more than 25,000 tonnes of CO2
equivalent per year. The carbon price is initially set at 23.00 Australian dollars (AUD) per tonne and will be increased stepwise to
AUD25.40 by July 2014. After July 2015, the carbon price is set to become market-based. According to estimates by the Government
and other organizations, the measure could reduce GDP growth by 0.1-0.2 percentage points and push up consumer price inflation
by between 0.7 and 1.1 percentage points.
Due to the euro area crisis, the value of merchandise exports from Japan to the European Union declined by more than 21 per cent
in June 2012 from a year ago. Imports contracted more than exports, however, leaving a small surplus on trade balance. Industrial
output declined for three consecutive months from April through June.
Western Europe: the outlook continues to deteriorate
The eurozone saw a contraction in economic activity by 0.2 per cent in the second quarter compared to the first quarter of the year.
While Germany registered growth of 0.3 per cent, Italy and Spain reported contractions by 0.7 per cent and 0.4 per cent, respec-
tively. Greece reported a fall in GDP by 6.2 per cent for the second quarter, year on year.
Short term indicators for industrial production, construction and retail sales all improved in May but remain lower than levels
observed at the beginning of the year. Capacity utilization declined for a second consecutive quarter, while unemployment continued
its upward march, reaching 11.2 per cent in June in the euro area, an increase of 1.2 percentage points from a year ago.
Indicators of confidence paint an even gloomier picture for the rest of the year. The European Commission’s Economic Sentiment
Indicator has now fallen for four consecutive months and is well below the level observed during the fourth quarter of 2011. Unlike
earlier in the year, all economies in the region are now seeing dramatic drops in confidence.
New EU members: Hungary starts talks with the IMF
The economies of the new EU member states are being affected by weak external demand. In Poland, industrial output increased in
June by a meagre 1.2 per cent year on year, held back by the stagnating automotive sector. Construction activity declined by 5.1 per
cent in Poland and also remains weak throughout Central Europe. As of June, industrial production declined by 1.4 per cent year
2 Monthly Briefing on the World Economic Situation and Prospects
3. on year in Estonia and by 0.4 per cent in Lithuania. Slower-than-anticipated growth has complicated efforts to meet budget deficit
targets for many new EU members. Estonia and Latvia, by contrast, managed to record budget surpluses in the first half of 2012
due to strong economic recovery in the first quarter and austere fiscal policies. Greater fiscal space allowed the Latvian Government
to lower the VAT rate by 1 percentage point in June.
As portfolio investors look for an alternative to troubled eurozone countries, some of the new EU member states enjoy favourable
borrowing terms. The Czech Republic brought its sovereign borrowing costs to a record low in July, thanks to austere fiscal policy.
Employment recovery is proceeding slowly, with some countries suffering setbacks in the second quarter. In Hungary, however, the
unemployment rate declined to 10.9 per cent in June from 11.2 per cent in May, reflecting seasonal factors and the impact of public
works programs. In July, Hungary started talks with the IMF on a new loan worth about €15 billion, although the outcome of those
talks is not certain given existing disagreements over tax policy.
Economies in Transition
CIS and Georgia: drought will affect grain harvest
Russia’s GDP increased by 3.8 per cent year on year in June, slower than in May, as industrial production grew by only 1.9 per cent.
As in the previous months, growth is mainly driven by domestic demand, while investment spending remains highly volatile. How-
ever, inflation accelerated to 5.7 per cent in early August on the back of food and utility prices, which may dampen consumption.
After a net outflow of capital from January to May, the country experienced net inflows of about $5 billion in June. Nevertheless,
total outflows for the first half of 2012 amounted to $43.4 billion. In Ukraine, output accelerated in the second quarter, with GDP
increasing by 2.5 per cent year on year in the first half of 2012 and output in the agricultural sector increasing by 7.4 per cent ow-
ing to an earlier harvest season. However, drought is expected to cause a reduced harvest in the third quarter, especially of wheat
and barley. The Government of Ukraine raised $2 billion by selling securities in the Eurobond market in July to repay its debt to
the IMF. The borrowing costs were high, however. Across the Black Sea region, drought will affect grain harvests in the Russian
Federation, Kazakhstan and Ukraine. In August, the Government of Kazakhstan abolished grain export subsidies that had been
introduced in January 2012. In July, the National Bank of Kazakhstan cut its policy rate for the fourth time in a row to boost the
economy as inflationary pressures subsided.
South-eastern Europe: a new IMF loan for Bosnia and Herzegovina
Economic weakness, caused by fragile external and domestic demand, continued in South-eastern Europe in June. Industrial pro-
duction declined year on year by 1.6 per cent in Croatia, by 4.1 per cent in the former Yugoslav Republic of Macedonia, and by 3.1
per cent in Serbia. In most of the region, inflation remained moderate. The low inflationary pressure allowed the Central Bank of
Albania to cut is key policy rate in July to an historic low of 4 per cent. In Serbia, by contrast, annual inflation increased to 5.5 per
cent in July. The National Bank of Serbia therefore raised its key policy rate in July by 25 basis points to 10.25 per cent, in efforts
to stave off an expected acceleration of inflation in the second half of the year. In July, the Government of Bosnia and Herzegovina
reached a preliminary agreement with the IMF on a new two-year stand-by loan worth about $500 million to help to finance the
budget deficit and to repay external debt. If the agreement is approved, funds from the EU and the World Bank will also be released.
Developing economies
Inflation moderates in Africa; tourism recovers in Egypt
Several African countries have seen a moderation in inflation rates. In South Africa, consumer price inflation receded further to 5.5 per
cent year on year in June following weaker pressure on food and fuel prices. Similar trends were found in Namibia and Egypt. Nonethe-
less, inflation remains high in several countries, including Ethiopia and Tanzania where it still stood at 20.9 per cent and 17.4 per cent
year on year, respectively, in June. The central bank of South Africa unexpectedly cut its policy interest rate by 50 basis points to 5 per
cent in light of a weaker outlook for growth and inflation. Kenya cut its policy interest rate by 150 basis points to 16.5 per cent, refer-
ring to the success of its previous tightening stance. By contrast, Malawi increased its policy interest rate by 500 basis points to 21 per
cent to counter the inflationary effect of a weaker currency. Ghana proposed extra spending that would increase the projected budget
deficit from 4.8 to 6.7 per cent of GDP. The Government cited higher wages in the public sector, the need to finance the presidential
and parliamentary elections in December, and the arrears of the previous Government as reasons for the additional expenditures.
The Egyptian Government expects tourist arrivals to the country to increase by 23 per cent in 2012 from last year. Yet, the expected
12 million tourist arrivals would be almost 20 per cent below the numbers reached in 2010 before the political transition. Tourism
yields 11 per cent of GDP.
Monthly Briefing on the World Economic Situation and Prospects 3
4. East Asia: Second-quarter figures show further weakening of the growth momentum
Economic growth across East Asia slowed further in the second quarter of 2012 as both external and domestic demand weakened.
China’s economy grew by 7.6 per cent year on year, the slowest pace since the first quarter of 2009. In the Republic of Korea, year-
on-year growth decelerated to 2.4 per cent in the second quarter and in Taiwan Province of China, GDP contracted by 0.2 per
cent from a year ago. The slowdown can be mainly attributed to falling exports and weak investment activity as firms have become
increasingly concerned over the near-term outlook. Gross fixed capital formation decreased by 2.3 per cent year on year in the Re-
public of Korea and by 8.4 per cent in Taiwan Province of China. Underpinned by robust labour market conditions, consumption
demand has remained resilient, however, mitigating the downturn.
China’s stock of foreign exchange reserves declined in the second quarter of 2012. A moderate surplus in the current account was
more than offset by a deficit in the capital and financial account as local firms and residents increased their holdings of foreign ex-
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change assets. This was also a main factor behind the recent decline in the value of the yuan against the dollar.
South Asia: weak monsoon rains and massive power outage add to India’s troubles
Weak monsoon rains are likely to have a negative impact on India’s economy in the months ahead, adding to concerns over slowing
growth and persistent inflation. During the first half of the monsoon season (June 1–July 31), total rainfall has been about 20 per
cent below long-term averages. Furthermore, looming El Niño conditions may reduce rains in the weeks ahead. Insufficient and
uneven rainfall could further drive up food inflation, which accelerated to 10.7 per cent year on year in June. Stubbornly high food
prices and overall inflation have led the Reserve Bank of India to keep its policy rates unchanged since April, even though economic
activity has remained weak. In late July, India suffered a massive power outage that left more than 600 million people without access
to electricity. The blackout not only illustrates the country’s inadequate infrastructure, but also serves as a reminder that in many
developing countries, power supply is struggling to keep up with rapidly rising demand.
In Bangladesh, lower-than-expected agricultural output and weakening exports have prompted a downward revision in GDP
growth for the fiscal year that ended in June. Growth is estimated to have slowed from 6.7 per cent in 2010/11 to 6.3 per cent in
2011/12 as agricultural output increased by only 2.5 per cent.
Across the region, export sectors continue to suffer from the crisis in the euro area. In the second quarter of 2012, total export
earnings were about 5 per cent lower than a year ago in Bangladesh and about 8 per cent lower in Pakistan.
Western Asia: reliance on hydrocarbon and external demand
Following a decade of almost uninterrupted double-digit growth, Qatar’s real GDP expanded by 6.9 per cent in the first quarter of
2012, down from almost 15 per cent in the previous quarter. As the boost from the hydrocarbon sector is fading, the construction
sector is again becoming the main source of economic growth. In Iraq, the Kurdistan Regional Government officially started to
export oil to Turkey in breach of federal law. The persisting disagreement between regional and federal authorities over the manage-
ment of oil resources and revenues is hampering investment and the development of the hydrocarbon sector. Israel posted another
large trade deficit in the first half of 2012, up by almost 50 per cent from a year ago. Weak external demand led exports to drop
more sharply than imports, including for high-tech goods. Turkish exports that are less reliant on Western markets, by contrast,
remain resilient and contributed to narrowing the 12-month trailing current account deficit, which remains high at 8.7 per cent of
GDP. Economic growth, however, has slowed in recent months, lowering revenues and widening the budget deficit, which reached
2 per cent over the last year.
Latin America and the Caribbean: industrial production declines while natural resources attract capital from abroad
According to recent data, economic activity in Latin American and the Caribbean grew moderately through the second quarter of
the year, compared with the same period of 2011.
In Brazil, after three months of declining output, industrial production grew 0.2 per cent in June month on month. Unchanged
private bank lending and persistently high personal default rates suggest that private domestic demand is flagging, adding to the
slowdown in commodities exports. However, unemployment remains low, supported by tax incentives extended to key industrial
sectors such as automobile and textiles. Decreasing inflation in July fulfilled the condition set by the Central Bank for an increase in
monetary stimulus.
In May, industrial production declined in Argentina (1 per cent), Colombia (0.2 per cent) and Mexico (1.4 per cent). The decline
in Colombia came despite a 26 per cent increase in foreign direct investment during the first semester of 2012. Investments, however,
went mostly into mining and other natural resource sectors. The country is now the latest in the region to face deindustrialization
concerns as capital inflows caused the currency to appreciate 9 per cent against the dollar since the beginning of the year. To curb the
appreciation, Colombia’s Central Bank cut the overnight lending rate for the first time since 2010, from 5.25 per cent to 5 per cent.
4 To subscribe to an electronic copy,Situatione-mail: wesp@un.org
Monthly Briefing on the World Economic please and Prospects