Rarely has a forecast been cut so fast. The European Bank for Reconstruction and Development on Friday slashed its 2013 growth forecast for the emerging economies of central and eastern Europe and North Africa from 3.1 per cent in January to just 2.2 per cent.
While the effects of the eurozone crisis have abated, economic activity is slowing faster than expected in the region’s biggest two markets – Russia and Poland. Structural reforms are needed, and needed now, says the bank. But it always says that. Continue reading »
Recent editions of the IMF’s World Economic Outlook have made pretty gloomy reading for developed economies, with growth forecasts trimmed and few recovery prospects.
But despite the global headwinds, emerging markets are still getting a positive writeup from the Fund’s economists. Here are the charts that tell the story. Continue reading »
Colombia sure likes to keep the markets on their toes.
On Friday, the country cut its benchmark interest rate for the fifth consecutive month. While previous cuts came in at 25bps increments, the central bank took out the axe this time around and chop rates by 50bps to 3.25 per cent – the lowest in Latin America. Continue reading »
Colombia is recovering… by baby steps.
The Andean nation’s gross domestic product grew 4 per cent last year, beating the country’s central bank forecast of 3.3 to 3.9 per cent – but still much lower than the 6.6 per cent of 2011. Continue reading »
Critics of lotteries the world over often describe them as taxes on the poor, and for good reason. From the US to Spain, lower-income citizens are the biggest buyers of lottery tickets, and, as a group, they will lose at least 35 per cent of what they spend.
In China, though, it is more accurate to describe the lottery as a tax on hope. Those buying tickets tend to earn more than average, but they have run into the chasm that is China’s wealth gap and see the lottery as their best bridge across it. Continue reading »
Sentiment is everything in the Gulf. Without reliable or regular economic data, it is a struggle to know which direction the wind is blowing.
The underdevelopment and lack of disclosure of public statistics explains in part why so few saw Dubai’s 2009 debt crisis coming. And now, as some Gulf economies appear to be pulling out of the economic crisis, there are still few concrete numbers to prove it. Many are relying on improved sentiment…on anecdotes here and there. Continue reading »
South Korea’s central bank on Friday held the base interest rate at 2.75 per cent for the third successive month, after signs that the national economy is picking up after a subdued performance last year. But it voiced unease about the European fiscal crisis, as it trimmed its growth forecast for 2013. Continue reading »
After last month’s slap in the face when Brazil released shocking GDP data at only 0.6 per cent, Colombia followed suit on Thursday announcing surprisingly weak third-quarter growth. The Andean country’s economy grew just 2.1 per cent in the third quarter compared with the same period last year.
The drag was caused by an acute slowdown in the construction sector as well as sluggish manufacturing. The growth pace was not only much slower than the 7.5 per cent expansion in the same quarter last year, but it was also the weakest in three years.
Continue reading »
It seems in every family there are secrets and lies.
On Wednesday afternoon, Pedro Delgado, the cousin of Ecuador’s President Rafael Correa, and the Andean country’s central bank president, stepped down after confessing that he did not hold a university degree in economics.
“I submit my irrevocable resignation as head of the central bank… and I do it because I made a grave mistake 22 years ago,” Delgado said. Continue reading »
Western Europe tends not to look to eastern Europe for lessons in economic management, but in these straitened times it makes sense to consider the big differences in the impact of the global crisis on four countries that are often lumped together – Poland, the Czech Republic, Slovakia and Hungary. Continue reading »
The world economy is doing worse than expected only three months ago says the International Monetary Fund in its latest review – a judgement that will surprise nobody following global economic events.
The euro crisis has not receded in line with the IMF’s projections, upsetting growth forecasts and leaving significant risks hanging over the world economy. Meanwhile, even the emerging economies, the engine of global growth, aren’t doing as well as had been predicted – partly because of domestic constraints and mounting financial imbalances. All in all, not a pretty picture, even when viewed from São Paulo or Beijing, let alone Brussels or Madrid. Continue reading »
Less than twenty years since the end of the war that destroyed its reputation as a safe and easy-going destination, Croatia is celebrating its best-ever tourist season.
Officials are now confident that 2012 will be a record year, with some 9.82m visitors arriving in the first eight months of the year – including the July-August peak season. That’s 4.22 per cent up on the same period last year, according to tourism minister Veljko Ostojic. Overnight stays by tourists rose 5 per cent to 59m. Continue reading »
After 33 years in power, José Eduardo dos Santos has finally been elected president of Angola. Observers universally expected him to win last Friday’s polls. Many even predicted the questionably wide margin of victory. Nevertheless, the election has changed the war-scarred southern African petro-state.
In the words of one long-serving Angola-watcher, “the fear barrier has been broken”. Neither the denunciations of a ruling party that has held power since independence in 1975, nor the thuggery of pro-regime militias, could deter the dissenting vanguard that has begun to challenge the status quo. Continue reading »
The economic gloom seeping out of western Europe is creating increasing difficulties for the small and open economies of central Europe – with both Hungary and the Czech Republic now in recession.
However, Slovakia, the smallest and most open of the three countries, is powering ahead, notching up 2.7 per cent annual GDP growth in the second quarter, thanks largely to the European motor industry. Continue reading »
Investors have responded with relief to the Egyptian presidential poll result which saw the Muslim Brotherhood candidate Mohamed Mursi confirmed as the country’s first democratically-elected leader.
The Egyptian stock index was up over 7 per cent on Monday, following Sunday’s 3 per cent gain, while benchmark bond yields plunged nearly 40 points. There seemed to be almost as much joy in the market as in Tahrir Square.
But it might not last long. Egypt remains at the mercy of political conflict between the old regime and the representatives of the would-be new order. Continue reading »