Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

13 March 2018

Balkan EU States ‘Need Reforms To Sustain Economic Growth’

By Relja Dusek

The European Commission’s latest report said that the economies in EU member states Bulgaria, Croatia and Romania grew in 2017, but all of them failed to complete much-needed structural reforms.  The economies of Croatia, Bulgaria and Romania showed some improvements last year, but all three countries face challenges to boost growth further in 2018, said the latest European Commission country report, published on Wednesday.
Bulgaria: Growth to slow but remain strong Bulgaria’s GDP growth in 2017 is estimated to have been 3.8 percent. In 2018 and 2019, GDP is expected to slow down but remain strong.

5 February 2018

Bitcoin and Other Cryptocurrencies Plunged $100 Billion in One Day. Here's What Happened


The cryptocurrency market, long described as a bubble that’s bound to pop, is crashing hard this week. Several cryptocurrencies decreased by more than 25% over the past 24 hours, and $100 billion in value simply disappeared in a single day.

Bitcoin, the leading cryptocurrency, is down more than 60% off its all-time high hit less than two months ago. The value of each unit of Bitcoin dropped as low as $7,700 on Friday, compared to $10,000 on Wednesday and around $20,000 at its peak in December.

28 January 2018

Trade Profile: The U.S. Struggles to Break Its Fetters

Global trade is changing. The kinds of multilateral agreements that characterized the postwar years have stalled over the past two decades, prompting countries and economic blocs to try to negotiate smaller deals with fewer partners. Nations and blocs have more leeway under this new model to negotiate the trade agreements that best suit their interests and to avoid those that don't. Now, more than ever, the future of international trade depends on a country or bloc's defensive interests, offensive interests and underlying factors of production. Our fortnightly Trade Profiles aim to break down these factors to facilitate an understanding of where global trade stands today and where it's headed.

21 January 2018

So The Eurozone Is Finally Recovering? Think Again!

by Elliott Morss
Source Link

For example, Derek Halpenny comments as follows:
In the second quarter of 2017, annual real growth in gross domestic product rose above 2 per cent for the first time since 2011. The Eurozone unemployment rate is also falling more sharply than expected. Recent data from the ECB reveal that foreign investors bought a record €238bn worth of Eurozone equities between May and July of this year....Because of fluctuations in the exchange rate, US investors have experienced an 8.1 per cent loss, while the S&P 500 is up 28.5%....Investors have woken up to the Eurozone recovery. They look set to stay.

10 January 2018

Does Government Spending Stimulate The Economy?

by Assistant Vice President and Economist Bill Dupor
Source Link

Economists hold two different views on whether government spending is an effective way to stimulate the economy. According to one view, purchases by the government cause a chain reaction of spending. That is, when the government buys $1 worth of goods and services, people who receive that $1 will save some of the money and spend the rest, and so on. This theory suggests that the “government spending multiplier" is greater than 1, meaning that the government’s spending of $1 leads to an increase in gross domestic product (GDP) of more than $1.

4 January 2018

Whither nationalism?

JAN PIETRZAK has just one demand. He’s not fussy about the design of the centennial arch with which he wants to mark the Polish victory over the Bolshevik armies in 1920. But he does insist that it must be taller than the 237-metre (778-foot) Palace of Culture and Science, given to the Polish nation by Stalin. Mr Pietrzak is a gruff old man with white hair and a fine, bushy moustache, a popular entertainer best known for a patriotic song that became an anthem for Solidarity in the 1980s. Although the Warsaw authorities have balked at his dream of a triumphal arch, he has the backing of the Law and Justice party, which forms the national government. It will be a symbol, he says: “Young people …will know that Poland was victorious—like Trafalgar Square.”

25 December 2017

Economic Conditions Snapshot, December 2017: McKinsey Global Survey results

Respondents’ economic optimism and confidence in their companies’ prospects reach a year-long high, though overinflated asset prices are a growing concern.

After reporting increasingly positive views on the economy throughout 2017, respondents to McKinsey’s newest survey on economic conditions are ending the year on an exceptionally cheerful note.1Most respondents say that both global and domestic conditions have improved in recent months, and for the months ahead, they are two to three times more likely to believe that conditions will improve than they are to expect declines. Majorities of respondents predict economic growth—worldwide and at home—in the coming months, and that trade will rise between their own countries and the rest of the world. Expectations for companies’ growth and demand also have reached new heights. Among possible risks, overinflated asset prices are an increasingly worrisome threat to global growth, while in respondents’ home economies, concern about heightened equity prices is on the rise.
A buoyant global outlook, amid growing concern over asset bubbles

22 December 2017

Without the big picture, the details don’t make sense.

Every day the media produces an overwhelming amount of material, projected through the biases of whatever interests pay their bills. A recent Gallup poll found that 62 percent of Americans think the news media favors a political party. If you’re in that 62 percent, you feel increasingly frustrated searching for the truth. It’s impossible to understand complex geopolitical problems and make informed decisions if the news you get is spun to serve someone else’s interests. Let’s face it – major media outlets need reader clicks and eyeballs. They get those clicks through worry-inducing headlines. Their bottom line is your anxiety.

6 December 2017

Energy, Economic Growth, and US National Security: The Case for an Open Trade and Investment Regime

By David Gordon, Divya Reddy, Elizabeth Rosenberg, Neil Bhatiya, Edoardo Saravalle for Center for a New American Security (CNAS)

David Gordon et al contend that a rising populist backlash in the US against the international system has found its expression in a desire for trade protectionism and a distrust of multilateralism. As a result, our authors here explain why in the context of expanding American energy production and exports, open markets are actually good for the US. Further, they provide recommendations on what traps the Trump administration must avoid so that its plans for American “energy dominance” do not veer the country down a path of damaging energy protectionism.

28 November 2017

Aligning Economic Sanctions

According to John Forrer, economic sanctions can be considered ‘well-aligned’ when they inflict a specific amount of economic damage on a targeted individual or group within a limited time frame. The author acknowledges the difficulties in enacting such precise measures, but contends that the process might be made easier if states would 1) further develop analytic tools and techniques; 2) construct flexible economic sanctions able to adapt to changing circumstances; and 3) create a multilateral forum for data sharing and collaboration between states.

16 November 2017

Russia's Economy Is Growing With Borrowed Money

Leonid Bershidsky
Source Link

Without any new ideas from a technocratic government constrained by President Vladimir Putin's apparent indifference, the Russian economy is once again relying on consumers, who are borrowing more to buy real estate and imported products. The growth is real, but it's also meager. And it will be hard to sustain without bigger changes. On Monday, Rosstat, Russia's official statistics agency, announced that the country's gross domestic product increased 1.8 percent year-over-year in the quarter than ended in September. That's lower than Bloomberg's consensus forecast of 1.9 percent and slower than the 2.5 percent increase in the previous three months. The oil price jumped 20 percent during the quarter, but the economic statistics won't pick up the related growth until the fourth quarter. So far this year, the Russian consumer deserves most of the credit for the growing economy. After suffering through three tough years -- during which time oil tanked and the ruble devalued sharply -- they are buying things again. Unfortunately, most of the things Russians are buying aren't made in Russia. 

7 October 2017

Where is technology taking the economy?

By W. Brian Arthur

We are creating an intelligence that is external to humans and housed in the virtual economy. This is bringing us into a new economic era—a distributive one—where different rules apply.

A year ago in Oslo Airport I checked in to an SAS flight. One airline kiosk issued a boarding pass, another punched out a luggage tag, then a computer screen showed me how to attach it and another where I should set the luggage on a conveyor. I encountered no single human being. The incident wasn’t important but it left me feeling oddly that I was out of human care, that something in our world had shifted.

4 October 2017

2019 Could Be a Very Bad Year for Ukraine

Nikolas K. Gvosdev

Yes, 2019 matters ...

For several years, Russia has been warning—consistently and clearly—that it tends to stop using Ukraine as a transit country for sending its energy to Western markets. If this happens, a major hole will open in the Ukrainian economy which Europe and the United States do not appear to be prepared to fill.

29 September 2017

The World That Awaits The Next German Leader

Now that the 2017 German elections have wrapped up, the process of forming a government and determining exactly who will lead the country is underway. Negotiations to determine the members of the governing coalition could take weeks or even months, but to some extent, it doesn't matter who is named chancellor in the end. The challenges that the next leader of Europe's largest economy must tackle will broadly be the same, whether Angela Merkel returns to the chancellery or not. The country's next government will have to satisfy the same set of national imperatives while dealing with the same outside pressures that shape its options in setting a national strategy. To understand the strategy, it's first necessary to explore these imperatives and surroundings.

5 September 2017

Shrinking, but Still Big: America's Slice of the Global Economic Pie


The American slice of the global GDP pie is shrinking. In 1960; U.S. GDP represented 40% of the global total. By 2014, that share had shrunk to 22%. The decline is relative — America's economy is much larger now than half a century ago, but other countries have grown much faster. Most notably China, the economy of which trebled over the same period, from close to 5% back then to around 15% now. And, as shown by this recent Voronoi diagram (1), first published in July 2015, the American slice is still by far the biggest one. 

Of course, there are several ways to measure GDP. One could argue that China's share should be bigger by now, or that it has already overtaken the U.S. It certainly has for industrial output — the middle of the three shades contained within each slide. The U.S. is overwhelmingly a service-based economy (darker shade), with a relatively small contribution by the agricultural sector (lighter shade). 

27 August 2017

Undue reverence for company founders harms Indian firms

THE chairman of Microsoft, John Thompson, occasionally reminds one of its directors, a fellow by the name of Bill Gates, that his vote in board meetings is no more or less important than that of other members. Contrast that with Infosys, an Indian technology firm, whose own retired founder succeeded in getting its boss to quit on August 18th, after a months-long whispering campaign (see article). The board was dismayed, but the outcome was all too predictable, given India’s penchant for treating corporate founders as latter-day maharajahs.

Indian companies come in all shapes and sizes, from clannish outfits whose tycoon bosses routinely stiff minority investors, to giants like Infosys whose corporate governance (usually) matches Western norms. What unites them is that they accord undue deference to “promoters”, as India dubs a firm’s founding shareholders. The exalted status bestowed on promoters is a pervasive feature of the Indian corporate landscape. Of the 500 largest listed Indian firms, according to IiAS, an advisory firm, 344 are controlled in practice not by boards answerable to all shareholders, but directly by promoters.

13 July 2017

Why the dollar is still king

V. Anantha Nageswaran

If one looked at economic risk factors such as economic growth rate, the safety and stability of the banking system, America’s fiscal deficit and government debt, the US does far better than the eurozone nations. Photo: Reuters

In the last one month, things have begun to turn in the sovereign bond market. The Federal Reserve (Fed) raised the federal funds rate (FF rate) in June to a maximum of 1.25%. Not only that, the minutes of the meeting of the Federal Reserve open market committee (FOMC) have confirmed that the Fed stands ready to start shrinking its balance sheet in the next few months.

Some commentators have called the policy stance of the Fed wrong (see, for example, Martin Sandbu of the Financial Times). They feel that the move to raise the policy rate in baby steps risks an end to the economic expansion that is eight years old. They are making the same mistake that they made before 2008. Even if the inflation rate were below 2.0%, and stayed that way, the FF rate in real terms is negative. Or, even if the inflation rate were to edge down to 1.5%, the real FF rate would be barely positive. Hence, the monetary policy is still very accommodative especially since the unemployment rate is below 5.0%, supply of leveraged loans is at a record high, stock indices are at record high valuations and stock market volatility at record lows.

23 June 2017

Ideas and ivory towers

Written by Dinesh Singh 

The Indian readymade garments industry has been a vital enabler of our export trade. Each year it exports to the West, ready-to-wear apparel worth several billion dollars. Trade analysts, in the recent past, have been quite gung-ho about this sector’s prospects. Where do countries like India, China and others in the region derive the strength that adds so much value to their economies? It is not as if nimble fingers and skilled tailoring hands do not exist in developed nations. The answer lies is in the availability of cheap labour. Unfortunately, this advantage is likely to disappear in the near future. Just as worrying is the obliviousness of this looming danger on the part of our policy and decision-makers.

We simply need to delve into the realm of robotics and artificial intelligence to gauge the situation. A former professor of robotics at the Georgia Institute of Technology has helped create a robotic tailor that can stitch a perfect circle: If you can stitch a perfect circle, then you can perform almost any complicated sewing task that, in the past, could only have been undertaken by skilled and experienced hands. The only seemingly viable option for the garments industry in the Asian region is to seek to import such machines. There goes a part of our plan to keep unemployment figures down.

22 June 2017

Charting the Indian banking sector’s future

Renny Thomas

The Indian banking sector is at a critical juncture in its evolution. It is now clear that the slump in credit growth and increase in stressed assets has affected the profitability of all banks, and threatens the very survival of some of them.

State-owned banks account for more than three-fourths of the stressed asset load, which is now far higher than their net worth. Provision levels are inadequate, as the banks hold only 28% of gross non-performing assets and restructured assets, as provisions. There is a $110 billion gap between the stressed assets in the system and the provisions made. Shifts in consumer preferences, combined with changes in technology and regulations, have created a perfect storm. The way out will depend to a large extent on the speed and direction of stakeholder reactions.

The core challenge is that many of the public sector banks (PSBs) are undifferentiated, sub-scale, and with limited capabilities to be full universal banks. About 80% of them own only 25% of the assets. They also operate in virtually every market segment with very limited sector or vertical-focused specialization. In fact, they focus on the same customer segments, offer similar products, and very often compete only on price. Some of this is because PSBs face challenges that impede them from competing effectively. They have to shoulder a disproportionate share of social and nation-building obligations. Policies on compensation and human resources reduce management autonomy, and inhibit their ability to attract and manage talent.

16 June 2017

Corridor of economic uncertainty

by Christophe Jaffrelot 

China presents the BRI, also known as the One Belt One Road initiative (OBOR), as a connectivity project — hence, the reference to the old Silk Road and a new maritime silk road. Illustration by C R Sasikumar

Last week, the Pentagon’s annual report to the Congress forecast that China will build a military base in Pakistan in order to have in the subcontinent facilities akin to what Beijing is developing in Djibouti. These plans are well in tune with the proposals presented last month during the Belt and Road Forum (BARF) in Beijing in the presence of 29 heads of state. India skipped it because a section of the Belt and Road Initiative (BRI), the China Pakistan Economic Corridor (CPEC), infringes New Delhi’s sovereignty as it passes through Kashmir. But the CPEC probably affects Pakistan’s sovereignty even more, since this project is more than a corridor; it is an expansionist plan, as the military base singled out by the Pentagon also suggests.