Stronger readings in China helped drive a marginal uptick in emerging market (EM) manufacturing activity in May, breaking a declining trend that has lasted for five consecutive months, according to purchasing manager index (PMI) data aggregated by Capital Economics.
The Capital Economics data, which showed an EM manufacturing PMI for May of 50.1 compared to 49.6 in April, coincided with a slight upswing in investment bank sentiment toward the Chinese economy. Nomura raised its China GDP forecast for the year, while Barclays saw a further easing in Beijing’s monetary policy. Read more
For President Dilma Rousseff of Brazil, the latest poll on her popularity offers from her perspective good news and bad news in equal measure.
The good news from the Pew Research Center is that 51 per cent of Brazilians view her favourably for the presidential elections in October compared with 27 per cent for Aécio Neves, the opposition candidate from the more pro-business PSDB party, and 24 per cent for her other opposition rival Eduardo Campos.
The bad news is that underneath these headline figures, there is a wealth of data showing Brazilians are becoming dissatisfied with their lot. Read more
The BNDES, Brazil’s government-owned development bank, is a much-maligned institution. Many would say, rightly so: it lends R$190bn ($85bn) a year of taxpayers’ money at heavily-subsidised negative real interest rates, often to big companies that critics say should be funding themselves on international markets at the same cost as their competitors. This makes it, in the words of one beyondbrics reader, a classic example of “the Brazilian public getting ripped off by rent seeking behaviour made possible by the state.”
But is this fair? The BNDES, after all, is a vital source of corporate funding, often for the most vulnerable recipients. Maybe it is a symptom, rather than a cause, of the distortions in Brazil’s economy. Read more
By Stephany Griffith-Jones, Columbia University
Leaders of the BRICS (Brazil, Russia, India, China and South Africa) nations are committed to the creation of a new Development Bank for infrastructure and sustainable development. Details of the bank’s operations are expected at the forthcoming BRICS summit to be held in Brazil this July.
The bank is set to play an important role in helping to meet needs for an estimated US$1tn or more in annual investments in infrastructure and sustainable development. The future growth prospects of the BRICS countries will depend in large measure on these investments materialising.
What are the likely challenges this institution will face as it moves from the design to the operational stage? Read more
** FT News **
* Syria on edge as elections begin | A sense of vulnerability among civilians has forced rebels to accept that relatives in government-held territories will vote in Tuesday’s election
* RBI decision gives Modi breathing space | Despite worryingly high inflation central bank holds interest rates at 8% giving Modi some room for manoeuvre as he plots his government’s first budget Read more
First quarter GDP figures from Croatia and Slovenia show that the former continues to slide backwards, albeit at a slower rate, while the latter continues its export-led recovery.
Croatia’s economy has not shown meaningful growth since 2008 and remains lumbered with structural problems that the government seems barely able to address. It shrank again in the first quarter, by 0.4 per cent, having contracted by 1.2 per cent in the last quarter of 2013. Read more
** FT News **
* Rebels attack border post in east Ukraine | A co-ordination centre on Ukraine’s border with Russia was attacked by rebels, leaving at least 12 dead
* Growth hopes pull Asia equities higher | Markets advance in response to a series of supportive data releases pointing to economic growth around the region Read more
Anyone reading about Bangladesh would be forgiven for thinking it’s a one-industry country. And when it comes to exports, they wouldn’t be far wrong. More than three quarters of Bangladesh’s exports are of ready-made garments. The anniversary of the Rana Plaza disaster, in which more than 1,100 people died, has focussed attention on the industry’s dangers. But what is being done to move the economy away from sweat shop factories? Read more