Shares in Coal India were up 2.6 per cent to Rs296.35 by 10.30am on Wednesday, after the state-controlled fuel supplier declared a special interim dividend.
It’s another unexpected move by New Delhi as the state struggles to meet its target fiscal deficit of 4.8 per cent of GDP. The public coffers will benefit by over $2.6bn. Read more
Indonesia, the Philippines, Malaysia and Thailand are on the face of it a relatively homogeneous, integrated group of nations with similar trading partners. So why did the first two emerge from the 2008 financial crisis in a much better shape than the latter?
A working paper from the IMF concludes that it was because Indonesia and the Philippines were less open to trade and had greater fiscal stimuli. Read more
Too much public spending, excessive reliance on domestic demand and loose monetary policy – the International Monetary Fund has made clear its concerns about Turkey in some of its harshest criticism of the country in recent years. Read more
Time to loosen those belts, as the European Commission let a host of CEE countries out from under its excessive deficit procedures – evidence that Brussels is keen on boosting growth.
Hungary, Romania and Latvia were allowed to exit the EU’s excessive deficit procedure, which they had been put into for running deficits above the permitted threshold of 3 per cent of GDP. More mixed news from Poland, which gained an extra two years to bring its deficit into line with requirements. Read more
Question: What’s the link between a national airline, a global-brand ski factory and an organic flour producer?
Answer: none at all, except in Slovenia, where any half-aware citizen would immediately recognise them as state-owned companies being prepared for privatisation to raise the cash to bail out Slovenia’s heavily indebted banks and balance the national budget. Read more
Hopes are high in Seoul that the new government will unveil a stimulus package this week to kick-start the stalled economy.
Expectations of a supplementary budget worth about 10tn won ($9bn) helped drive the benchmark Kospi index up 1.8 per cent this week, after it fell to a five-week low on Friday on concerns over Cyprus. Read more
Just as in most of Latin America, many Argentines were engrossed on Tuesday night with news of the death of Hugo Chávez in Venezuela.
It was then that Argentina’s economy ministry snuck out, belatedly, news of the country’s first primary budget deficit since 1996. Read more
The Ghanaian government’s 2013 budget was presented to parliament on Tuesday, outlining plans to gradually bring the country’s fiscal deficit down to 9 per cent of GDP from its 2012 level of just over 12 per cent.
In the first major piece of economic policy since presidential elections held in December, the National Democratic Congress government led by president John Mahama said it would raise taxes and control government spending to calm concerns over a fiscal gap which grew to almost double its target level in 2012. But observers are skeptical about the extent of its commitment to balancing its books. Read more
Nigeria’s long-delayed 2013 budget was finally signed off on Monday by president Goodluck Jonathan, ending months of disagreements between the executive and legislature over spending plans.
A key sticking point has been setting the benchmark oil price, which determines how much the government can spend and how much it must save. The spenders have won, though concerns will linger over optimistic assumptions about the health of Nigeria’s oil industry. Read more
By Gábor Takács of Nézőpont Intézet
Lifting the EU excessive deficit procedure (EDP) against Hungary was one of the major topics discussed at the meeting between Viktor Orbán, the Hungarian prime minister, and José Manuel Barroso, European Commission president, last week.
Orbán’s critics were quick to argue that by lifting the EDP, Brussels would give up the only effective method to exert pressure on the “unorthodox” leader from Budapest. Read more
Was this what the central bank expected? Last Wednesday, Brazil’s monetary policy makers held their benchmark interest rate steady on the grounds that its current level (7.25 per cent a year) was the right one to keep inflation on a downward course.
On Monday, market economists surveyed by the bank showed what they thought of that: inflation expectations for 2013 are up, from an average of 5.53 per cent last week to 5.65 per cent today. Read more
How gloomy can you get? The Brazilian central bank’s latest weekly survey of market economists suggests the sky, or rather the ground, is the limit. The survey’s consensus on GDP growth this year is now 3.2 per cent, down from 3.26 per cent a week earlier, 3.3 per cent the week before that, 3.4 before that, 3.5 before that, and so on back in time to late November, when it began falling from the 4 per cent that had been expected for several months.
But while growth is creeping down, inflation is creeping up. The two make a miserable combination. Read more
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. Read more
Hungary has seen a flurry of tax and legal changes in the past two years but the indications are “we are past the worst”, Eszter Gyuricsku of Deloitte, the professional services firm, told business people gathered in Budapest on Wednesday.
Unofrtunately for Gyuricsku, speaking at a seminar designed to champion Hungary as a location for shared service offices, barely 500m away Gyorgy Matolcsy, Hungary’s economy minister, was announcing that Hungary would not, after all, halve a special bank tax next year as planned and would, instead, double a financial transaction tax from 0.1 to 0.2 per cent on all bank transactions from January 1. Read more
In 2009, with the global economy in recession, Albania was one of the few countries in Europe to register GDP growth. While some Eastern European countries saw double-digit negative growth, Albania clocked up an impressive plus- 3.3 per cent.
The country’s economic performance since then has been steady, if unspectacular, as an IMF staff team reported at the end of its visit to Albania. The going is getting tougher, however, with external and fiscal pressures building. Read more
As we enter the final quarter of a year that has proved almost disastrous for Serbia’s public finances there are signs that the new government is ready to get a grip on the fiscal situation. But the structural reforms that the IMF and investors seek are still some way off. Read more
Turkey won itself a dubious honour at the weekend: a fuel tax hike made it the mainstream economy with the most expensive petrol in the world. It all depends on the vagaries of the exchange rate of course, but the new price of TL4.83 a litre, or €2.08, outstrips Norway’s €2.06, according to AFP, leaving other high fuel tax economies such as Italy, the Netherlands and Spain some way behind.
Then the government followed by increasing gas and electricity rates by 10 per cent on Monday. Read more
It was a good news/bad news day for the Indian economy Friday, as the fiscal deficit grew while the current account deficit shrank.
First the good news: the current account deficit for the quarter ending in June shrank to 3.9 per cent of GDP, or $16.55bn, down from a record 4.5 per cent, or $21.76bn, in the previous quarter, but up from 3.8 per cent during the same quarter last year, according to Reserve Bank of India data released Friday. Read more
Serbia’s new government faces some harsh realities including a large and growing budget deficit, a shrinking economy and a substantially-depreciated currency. A pledge this week to restart talks with the International Monetary Fund and tackle the budget gap shows a willingness to address them.
But it will be hard to square those promises with other ones made only recently to voters. The nationalist-socialist led ruling coalition has some way to go in reassuring investors and international institutions. Read more