(September 2012) The capacity of the UK economy to produce goods and services has taken a hit from the economic crisis, unless the official economic data turns out to be extremely inaccurate, Paul Fisher, a Bank of England executive director, said on Tuesday. "It's clear something is going wrong," Fisher said in London. "Either the data is so far wrong, it's difficult to believe, or the supply side of the economy has shifted to a degree that's unprecedented," he said. Also on Tuesday, it was reported that UK banks cut their lending to businesses and households in August, underlining the challenge facing policy makers as they struggle to boost the supply of credit and revive a stagnant economy. Meanwhile, UK GDP (gross domestic product) is forecast to contract by 0.5% in 2012 and to recover gradually by 0.8% in 2013.
(September 2012) Irish Economy: Goodbody has downgraded GDP (gross domestic product) forecasts for 2012 and 2013, which it says highlights the still fragile nature of the "economic recovery".
Irish Economy: ESRI says Ireland's economy “bouncing along the bottom”; German business loan rate 75% above Irish level
(September 2012) Irish Economy: Ireland's economy can be described as “bouncing along the bottom”, according to the ESRI (Economic and Social Research Institute). The latest ESRI 'Quarterly Economic Commentary' concludes that a further slight fall in activity will probably be recorded for 2012, with only low growth likely in 2013. It says growth in GNP (gross national product), which is a better measure of Ireland's economic performance than GDP (gross domestic product) [because the profits of the significant multinational sector are excluded], is expected to fall marginally in 2012, down 0.2%. GDP, which is used in measuring the fiscal targets by the bailout Troika, is expected to increase by 1.8%. Next year, GNP growth is predicted be positive at 0.7%, reflecting stronger exports of goods and services and some pick up in investment.
(September 2012) “It could go either way,” said Joachim Fels, chief economist at Morgan Stanley in London, who coined the description last month in report. “It doesn’t take much to tip us into a global recession.”
(September 2012) Africa has ten countries that are beacons of hope and five lions that have the potential for major growth. In 2011, Africa’s average growth declined from 5% in 2010 to 3.4%, mainly due to the political uprisings in North Africa (Egypt, Tunisia, Libya), whose growth rate was only 0.5% in 2011. With the gradual recovery of North African economies, average growth is expected to rebound to 4.5% in 2012 and to 4.8% in 2013. Africa’s economic prospects depend on many unpredictable factors. A key external risk involves the slowdown in the Eurozone which may reduce the demand for African products, while lowering external resource flows, including remittances. Domestic risks such as political upheavals with potential spillovers to neighbours and severe weather, as the droughts experienced in the Sahel region, could reduce GDP (gross domestic product) growth and threaten food security.
(September 2012) India's government has been in a state of paralysis in recent years as the economy and reforms have slowed against a backdrop of massive corruption involving the sale of mobile phone licences. Growth in the second quarter was at an annualised 5.55% of GDP (gross domestic product) -- a three year low. Manmohan Singh (born 1932), in his second term as prime minister, had famously proposed radical reforms when he was finance minister in 1991 and had ended his 2-hour budget speech by saying: "I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, 'no power on earth can stop an idea whose time has come.' I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome." The question remains as to whether India can become 'a major economic power.'
(September 2012) The Bank of France Monday confirmed predictions that France's GDP (gross domestic product) will contract by 0.1% in the third quarter. The expected contraction will follows three straight quarters in which growth was 0% in the Eurozone's second-largest economy. Unemployment, at more than 10% of the population has returned to levels last seen thirteen years ago; the last annual budget surplus was in 1974 and France has run a trade deficit every year since 2002. François Hollande, French president, created a stir during his campaign by advocating a growth agenda rather than austerity. However, to paraphrase Mario Cuomo, a former New York governor, he has rapidly pivoted from campaign poetry to governing prose. However, he has no mandate for reform as soufflé was on his election menu not substance. Last Sunday, he announced spending cuts and tax increases worth €30bn or 1.5% of GDP along with a plan to solve the unemployment crisis by 2014. Le Figaro, the conservative daily, declared on Thursday: "L'agenda 2014 de Hollande ne convainc pas les Français," while on Monday, Libération, a left-leaning tabloid, gave front page coverage to Bernard Arnault, France's richest man and head of LVMH, the world's leading luxury goods company. Arnault has applied for Belgian citizenship and the tabloid's headline left no room for nuance: "Casse-toi, riche con!,” which translates roughly as “Sod off, you rich bastard!”
Germany's public debt per capita in 2011 rose to €24,771 despite boom; Unemployment forecast to remain below 3m in 2013
(September 2012) At the end of 2011, Germany's debt owed via the overall public budget (Federation, Länder, municipalities/associations of municipalities and statutory social insurance, including any extra budgets) to the non-public sector amounted to €2.0tn -- corresponding to €24,771 per inhabitant. The debt rose by 0.7% in the year despite an economic boom. Meanwhile, unemployment is expected to remain below 3m in 2013.
(September 2012) While China’s economy faces significant stress, it will meet its official growth target of 7.5% GDP (gross domestic product) growth in 2012, Wen Jiabao, Chinese premier, said in an address to 2,000 business, government and civil society leaders at the opening plenary session of the World Economic Forum’s sixth Annual Meeting of the New Champions in Tianjin, on Tuesday. “It is true that the Chinese economy is under notable downward pressure, but with our efforts to shift our economic model, better allocate resources and implement more reform and opening up, we have the ability to keep the economy in good shape.” China’s global presence has been on a steady climb over the past ten years. Between 2002 and 2011, the value of exports rose by 22% annually. Foreign direct investments, excluding those in the financial sector, rose by 43% annually - - reaching $68.6bn by 2011 -- and the value of outbound M&A deals rose by 30% annually. As mature markets continue to struggle with the global slowdown, China’s global role will continue to expand. Foreign direct investments by Chinese companies will likely rise by 15% annually between 2010 and 2020, according to the Ministry of Commerce. Chinese companies are also poised to create a few million jobs overseas between 2010 and 2020. In 2010, overseas employment at Chinese companies stood at 780,000.
(September 2012) Apple is expected to launch its new iPhone on Wednesday. Tim Cook, Apple's CEO will introduce the sixth-generation iPhone, the iPhone 5, and sales of the device may materially impact US GDP (gross domestic product) in the fourth quarter of 2012.