So rarely does China’s official GDP growth target bear more than a passing resemblance to subsequent reality (see chart), that it might be regarded as a less than useful indicator.
This year, however, much is riding on which number – if any –Beijing announces as its GDP target for 2014 at the annual National People’s Congress (NPC), which convenes on Wednesday. There are several potential permutations, each of which may indicate very different policy intentions. Continue reading »
If recent examples of revolution and politcal transition are anything to go by, Ukraine is in for a nasty shock in terms of economic growth.
Following a year of upheaval, GDP growth rates can weaken by between 4 to 8 percentage points the following year, according to a Capital Economics note on Thursday. Continue reading »
These days, Jim O’Neill doesn’t bother much with “Brics” – the moniker he invented. The former Goldman strategist is more into “growth markets” instead. So – is it time for him to look more closely at the FTSE100, rather than the Bovespa?
Based on the new Bank of England projections, the UK economy is set to grow at a 3.4 per cent clip this year. Not too shabby. Less shabby still when compared with the supposedly “high growth rates” in certain parts of the emerging world. Continue reading »
The boys and girls of central and eastern Europe have been pretty good this year and Santa looks like he has some goodies in his sack for the region over the upcoming year.
A look at a raft of end-of-year analyses of the CEE region shows that the gloom that was afflicting the region last year has largely lifted. Continue reading »
For much of their history, the economies of Latin America have been isolated not only from the rest of the world but also form each other. Over the past quarter century, this has changed and the region now has the opportunity to embark on a virtual circle of development. But to realise this potential, governments must still deal with daunting challenges, writes Juan Carlos Echeverry of the Inter-American Development Bank. Continue reading »
Are fixed exchange rates bad for growth? Much of the economic literature suggests no causal relation between a country’s exchange rate regime and economic growth. But the IMF has produced a paper suggesting that sub-Saharan Africa may be different.
Manuk Ghazanchyan and Janet Stotsky, the authors, perform a random effects model and find that non-oil exporting nations that claimed to have a flexible exchange rate had significantly higher GDP per capita growth from 1999 to 2011. Continue reading »
Emerging markets are so over. So says Lawrence Summers – you can read beyondbrics’ take on his theory here – and so says Anders Aslund, in a paper published by the Peterson Institute, titled Why Growth in Emerging Economies Is Likely to Fall.
Another body blow to the catch-up theorists. What’s the argument this time? Continue reading »
Do you bet on two baseball players who are on a lucky streak? The law of averages says no: in the long run, both players will revert to their mean scores.
By the same rule of thumb, Larry Summers says that economists should not expect India and China to grow significantly above their long-term average of 2 per cent per capita. (Anders Aslund has a similar argument – which beyondbrics examines here.) Continue reading »
It turns out the OECD’s May forecasts (made days after hints of tapering) were off… by quite a lot.
On Tuesday, the body knocked 2.3 percentage points off its forecasts for India’s GDP growth in 2013, for example, and 1.7 points off its growth in 2014. Continue reading »
An interesting take on the 1997 Asia crisis from Carmen Reinhart, known for her influential (before it was corrected) paper on the relation between growth and debt, and Takeshi Tashiro.
A new research paper from the two economists this week argues that Asia still hasn’t recovered from 1997 in one key regard: investment is still pitifully low, from India to South Korea. Continue reading »
Maybe it’s time to start preparing for a return wave of CEE migrants from western Europe, as Thursday’s flash GDP third quarter numbers show that most of the region’s economies are experiencing a sharp recovery – in contrast to stagnation in the eurozone.
While the eurozone stumbled to an anaemic 0.1 per cent growth for the quarter, Poland posted a higher-than-consensus expansion of 1.9 per cent, up from only 0.8 per cent in the second quarter.
Continue reading »
A mixed picture for the prospects of an economic recovery emerging Europe, according to Monday’s forecast from the European Bank of Reconstruction and Development.
The EBRD found that the more advanced countries of central Europe will probably do a bit better than expected next year, while the rest of the post-communist region is sputtering. Continue reading »
Research by Harvard’s Ricardo Hausmann has found that Mexico, Zimbabwe and Egypt are well-positioned to grow. Qatar and Brazil are less well-placed, while China risks recession. In part two of a discussion with John Authers, he explains his unexpected predictions.
Liu Li-Gang, ANZ’s chief China economist, talks to the FT’s Josh Noble about China’s reliance on investment over consumption, and the prospects for reform and rebalancing of the economy.
By Saurabh Mukherjea and Ritika Mankar Mukherjee
It is hard to read a newspaper these days, whether in India or abroad, without running into opinion pieces criticising the performance of the Indian economy. Whilst the critics differ in their targets – some focus on the incumbent administration’s incompetence, others on India’s institutional shortcomings such as endemic corruption – as the tide of cheap American money recedes, India’s shortcomings are clear for all to see. Not only is the currency battered, the economy too will slide towards low single digit growth.
We disagree not so much with India’s economic predicament – the weak economic growth and the sliding rupee are matters of fact – but with the portrayal of a cyclical downturn as a structural crisis. This, to our mind, is one of the three myths regarding India that are being perpetuated at present. Continue reading »