(May 2013) Stephen King, group chief economist of HSBC writes in his new book, 'When the money runs out,' "I count myself as one of the last of the so-called baby-boomer generation. In the first four decades of my life real British incomes per head almost tripled. As I approach my 50th birthday, something seems to have gone horribly wrong. Over the past decade, those incomes have risen just 4 per cent. The economic dynamism which provided the backdrop to my formative years has gone, replaced by what increasingly appears to be an enduring – and distinctly unappealing – era of stagnation."
(May 2013) US growth is set to accelerate in the second half of the year. Fears of a spring slowdown in the US are viewed as exaggerated. Weak initial jobs figures have been revised away, and the labour market in the US continues to improve. In fact, US employers created an average of 208,000 jobs a month between November and April, 50% more than in the previous six months. Meanwhile, China has now embarked on a permanently slower growth path.
(May 2013) Currency wars pose "a clear and present danger" to the world economy on a scale not seen since the breakup of the trading system that led to the Great Depression in the 1930s, C. Fred Bergsten warned at the annual Stavros Niarchos Foundation Lecture on Thursday in Washington DC. He said that manipulation to weaken currencies averages $1tn per year and transfers $700–900bn of production annually from deficit to surplus countries. This costs 1–5m US jobs—the same order of magnitude as have been created by the US fiscal stimulus of 2009 or the quantitative easing (QE) policies of the Federal Reserve.
(May 2013) Economic growth was strong in the 1960s in developed countries when debt was low; now when debt is high, growth is needed to bring down unemployment and to cut private and public debt burdens. However, economic growth in the 21st century has so far been lower than in previous decades while ageing populations will have a significant impact on growth over the coming decade. The contribution to growth from demographics is likely to halve over the next 20 years.
(May 2013) While BRIC countries would gain from various structural reforms, their growth potential remains substantial at lower levels than in recent times. All BRIC countries benefit from plenty of catch-up potential and scope to raise productivity via an increase in the physical and human capital stock. The first reason for optimism is that savings have not declined materially, and may even rise over the medium term. The current account positions are strong (China, Russia) or quite manageable (Brazil, India). This means that an acceleration of investment won’t be much constrained by a lack of savings.
(May 2013) Global food prices rose in April for a third straight month as surging dairy costs maintained an upward pressure on prices, but cereal output is expected to be robust this year.
(May 2013) The near-term outlook for the sub-Saharan Africa region is broadly positive because most factors lending support to economic activity in the last few years remain in place—namely strong investment, favourable commodity prices, and generally prudent macroeconomic management.
(May 2013) IDC, the US market research firm, estimates that the combined sales of new desktop computers, laptops and tablets will increase by 10% p.a. on average between 2010 and 2017, to a total of 730m units. This dynamic growth of the total market is proceeding in tandem with dramatic shifts in significance within the device categories.
(May 2013) The African continent has 1bn inhabitants who speak more than 2,100 languages and span 54 countries that cover an area larger than China, the US, India, and Europe combined. Despite this diversity, one thing is clear, however: a new consumer class is emerging across Africa - - one with increasing purchasing power and a hunger for products and services that once seemed unattainable. For forward-looking companies, these growing markets will be worth well over $1tn by 2020 and will offer access toms of new customers.
(May 2013) The global economic outlook dimmed this week with reports of manufacturing slowdowns in the US and China coupled with a deepening recession in the Eurozone. German industrial giants, Siemens, BASF and Daimler either cut their earnings forecasts for 2013 or announced a restructuring.