Stuck between the rock of currency depreciation and the hard place of a slowing economy, South Africa’s Reserve Bank kept interest rates on hold at 5 per cent on Thursday while revising down its predictions for 2013 GDP growth.
With governor Gill Marcus declaring herself “increasingly concerned about the deteriorating outlook for the South African economy,” the bank downgraded 2013 growth forecasts from 2.7 per cent to 2.4 per cent – a far from insubstantial cut for a country where about a quarter of the working population is unemployed. Continue reading »
Ghana’s central bank sprung a surprise on Wednesday by raising its policy rate from 15 per cent to 16 per cent, stepping up its efforts to halt the decline of the cedi.
Central Bank Governor Henry Kofi Wampah noted risks to economic growth arising in part from tightened credit, but decided the weakening of the currency was the bigger threat. Continue reading »
India’s annual wholesale price inflation rate dropped to 4.89 per cent in April, a 41-month low.
It was sharply down on the 5.96 per cent recorded in March and well below expectations, with an average forecast of 5.5 per cent in a Reuters poll of analysts. Continue reading »
While China’s manufacturing indices have been rather depressing of late, Indonesia’s numbers are much healthier.
The PMI score came out at 51.7 in April – up from March, a six-month high, and the second highest in the last few years. So, all good? Continue reading »
Brazil’s central bank is in tightening mode again, raising its policy interest rate last week after a long cycle of loosening that began in August 2011. It is worried that inflation is on the rise and less worried, apparently, about slow growth.
But behind recent numbers on inflation is another set of numbers on retail sales, which fell in February for the first time in a decade. If that turns into a trend, the very foundations of Brazil’s recent growth story will be undermined. Chart of the week takes a look. Continue reading »
The devil being in the detail is a phrase with much resonance in Hungary – especially when, as on Thursday, things look rather too good.
“Inflation at record low” said the headlines. Indeed, annual consumer price inflation fell to 2.2 per cent in March, well below the consensus of 2.5 per cent and the lowest ever recorded since the transition to a market economy. Continue reading »
Figures for March inflation, published on Wednesday, will have made painful reading in Brasília: for the first time since late 2011, consumer price inflation was above the government’s upper limit of 6.5 per cent a year, at 6.59 per cent.
But it could have been worse. Indeed, the benchmark IPCA index rose 0.47 per cent during March, less than the 0.5 per cent consensus in a Bloomberg survey of 38 economists. And inflation in the month was rather less than February’s 0.6 per cent. So, sighs of relief, rather than gnashing of teeth? Continue reading »
Should gold traders be paying attention to Chinese pork prices? It may sound outlandish, but new research has uncovered an interesting link between global gold prices and Chinese inflation (which in turn is often driven by pork prices). Continue reading »
The Central Bank of Egypt raised its main interest rates for the first time since November 2011, prompted by the jump in February headline inflation and despite the slowdown in economic growth.
The bank raised the overnight deposit rate and overnight lending rate by 50 basis points to 9.75 per cent and 10.75 per cent, respectively, and raised its discount rate by 75bp to 10.25 per cent. Continue reading »
A string of bad economic data in Russia on Wednesday.
Retail sales in February posted their slowest growth rate in three years, rising just 2.5 per cent, compared with forecasts of around 3.3 per cent. Industrial output shrank 2 per cent year-on-year.
On balance, the numbers will increase the pressure for early rate cuts. But a cut still isn’t certain as the central bank is still worried about inflation: as was announced this month, inflation rose in February to 7.3 per cent. Continue reading »
Inflation is on the rise in the Middle East and north Africa, bringing risks to consumption-driven growth and adding to political strains in the transitional countries least able to cope with them. Continue reading »
It’s bad news for consumers and the government but good news for traders (and vampires). Indonesia is suffering from a garlic shortage and prices have skyrocketed as a result, up by an average of 31 per cent in February alone.
Indonesians like to eat garlic and the surge in prices, which contributed to higher than expected inflation last month, will make life particularly tough for the nearly half of Indonesian’s 240m people who live on less than two dollars a day. Continue reading »
Now Egypt’s on-off IMF deal has reverted to “off”, the country is back in crisis territory, as far as analysts are concerned. Foreign reserves are still perilously low; elections are being kicked down the road; reforms to tax and subsidies are slow or delayed.
Add to all that the latest inflation data, and the picture is not pretty. Egypt’s statistical agency said on Sunday that urban inflation was up 8.2 per cent in February year-on-year, up from January’s 6.3 per cent. Continue reading »
Could rising food prices come back to haunt China’s leaders once more? A sharp increase in inflation, revealed in economic data published at the weekend, was driven largely by a jump in the food index.
Consumer prices rose 3.2 per cent in February, compared with 2 per cent in January, with food prices rising 6.0 per cent, up from 2.9 per cent in January. And, if Stephen Green of Standard Chartered Bank is right, there could be worse to come. Continue reading »
Mexico’s central bank has cut its policy interest rate by 50 basis points to an all-time low of 4 per cent a year, marking a change in monetary policy for the first time in four years.
Most analysts had expected the hyper-conservative bank to stick to its policy of no change, with the economy growing at about 4 per cent a year and inflation still above the government’s target. But the bank is apparently more concerned about the growth outlook than it is about inflation.