(April 2013) With many of the region’s economies doing well, policymakers in Latin America should take advantage of the current favourable economic conditions to lay the foundations for strong and sustainable growth, said Alejandro Werner, head of the IMF’s Western Hemisphere Department, last weekend. He is not the only optimist but for a region strongly dependent on commodities, global economic news on Tuesday wasn't encouraging. South America is as commodity dependent (or more) as four decades ago, with exports of basic goods reaching about 10% of GDP in 2010. But this contrasts markedly with the pattern seen in Mexico and Central America - - where commodity dependence has fallen sharply, reaching balanced trade in 2010. It is also very different from the trend observed in emerging Asia, which has gone from being a net commodity exporter in 1970 to a net importer in 2010. For Latin America and the Caribbean as a whole, the share of primary commodities in total exports rose from 50% in 1995 to 55% in 2009.
(April 2013) Mexico's hourly wages have fallen to about a fifth lower than China's in constant dollar terms. Just a decade ago, they were three times higher.
(April 2013) Commodity Supercycle: In the past decade, the rise in commodity prices have undone the decline of the previous century, rising to levels not seen since the early 1900s. Despite current declines, research shows that demand for energy, food, metals, and water should rise inexorably as 3bn new middle-class consumers emerge in the next two decades. The global car fleet, for example, is expected almost to double, to 1.7bn, by 2030. In India, it's expected that calorie intake per person will rise by 20% during that period, while per capita meat consumption in China could increase by 60%, to 80 kilograms (176 pounds) a year. Demand for urban infrastructure also will soar. China, for example, could annually add floor space totaling 2.5 times the entire residential and commercial square footage of the city of Chicago, while India could add floor space equal to another Chicago every year. The demand in China has been a boon for countries such as Australia and this week, the Financial Times reported that the world’s top 20 physical commodities trading houses last year made $33.5bn in net income, little different from net income levels over the past five years and an estimated $250bn in a decade.
(April 2013) The IMF says the average fiscal deficit of developed economies has fallen from a peak of 9% in 2009 to an expected level of 4.7% in 2013 and most countries were reducing their borrowing. However, 10 countries, amounting to 40% of global output, still had “the most severe fiscal problems,” including the US, Japan, UK, France, Italy and Spain.
(April 2013) The global economy is in a rut, unable to sustain a decent recovery and at risk of to a sudden stall, according to the latest Brookings Institution-Financial Times tracking index of recovery, published today. Last week, in a speech at the Economic Club of New York, Christine Lagarde, IMF managing director, spoke of a three-speed world economy and she called upon global policymakers to act to get ahead - - and stay ahead - - of the crisis.
(April 2013) At 53.4 in March, little-changed from February's four month low of 53.2, the JPMorgan Global Services Business Activity Index - - a composite index produced by JPMorgan and Markit in association with ISM (US Institute for Supply Management) and IFPSM (International Federation of Purchasing and Supply Management) - - nonetheless signalled expansion for the forty fourth month in a row. March data pointed to a broad-based expansion of global service sector business activity. The US remained the strongest performer, recording growth above the global average for the fortieth successive month.
(April 2013) Over the past several decades, advanced economies have seen a striking rise in inequality. In the United States, the top 0.1% of households receive more than 10% of national income - - more than double the figure of 30 years ago.
(April 2013) Global VC investment in 2012 fell by 20%. Following a year in which activity declined to its lowest levels since 2009, there is hope that steadying economic conditions will bolster investor confidence and increase risk appetite. This and the prospect of better exit opportunities ahead could make 2013 a more positive year for venture capital. The US and Europe continued to dominate the venture capital market - - accounting for 85% of global investment. The amount raised via IPO (initial public offering) declined globally by 27%.
(April 2013) At 51.2 in March, up slightly from 50.9 in February, the JPMorgan Global Manufacturing PMI (Purchasing Managers' Index) - - a composite index produced by JPMorgan and Markit in association with ISM (US Institute for Supply Management) and IFPSM ( International Federation of Purchasing and Supply Management)- - signalled expansion for the third straight month.
(March 2013) World trade rose in January 2013 following a 1.0% decline in December while industrial production was flat following a 0.7% increase in December.