Macroeconomic News

14.02.2013 13:17 Japan`s GDP contracted an annualized 0.4 percent in the fourth quarter of 2012 Japan`s economy unexpectedly shrank last quarter as falling exports and a business investment slump outweighed improved consumption, bolstering Prime Minister Shinzo Abe`s case for more monetary stimulus to end deflation. Gross domestic product contracted an annualized 0.4 percent, following a revised 3.8 percent fall in the previous quarter, the Cabinet Office said in Tokyo today. The median forecast of 32 economists surveyed by Bloomberg News was for 0.4 percent growth. Nominal GDP shrank 0.4 percent on quarter. The prolonging of Japan`s recession into a third quarter shows that benefits from a weaker yen and rising stocks have yet to be felt. The lower house of parliament passed Abe`s fiscal stimulus package today, while Bank of Japan Governor Masaaki Shirakawa and his colleagues raised their assessment for the economy and left monetary policy unchanged. Japanese exports fell for seven months through December as Europe`s crisis dragged on shipments and a dispute with China over islands claimed by both nations hurts demand for products such as Toyota Motor Corp.

`s cars. Net exports contributed 0.2 percentage point to the contraction, the report showed. A 0.4 percent on-quarter rise in private consumption, which accounts for more than half of GDP, was not enough to avert a contraction even as colder-than-usual weather spurred sales of winter clothing and other items. Business investment fell 2.6 percent from the previous quarter, the fourth consecutive drop in capital spending, even as some companies said their earnings outlook is improving due to the weaker yen. 30.01.2013 21:01 Russia`s GDP increased by 2.4 percent in December 2012 The growth of Russia`s gross domestic product (GDP) totaled last December at 2.4 percent. In the fourth quarter of 2012, the Russian economy grew by 2.2 percent, said the Deputy Minister of Economic Development, Andrei Klepatch. Taking into account seasonal factors, the increase was 0.3 percent, he told reporters. According to Klepatch the Ministry`s forecast for the Russian GDP growth for the whole year 2012 remains at 3.5 percent. He expects that Russia`s GDP will increase in the first and second quarter of 2013 by more than two percent.

"The increase in the first and in the second quarter will be at about two percen, t for the third and fourth (quarter) it is expected a significant acceleration", he said. 10.01.2013 15:36 Russia`s 2012 Consumer Price Inflation Reaches 6.6% Russia saw a slight pick-up in headline consumer price inflation in December, although a moderation in underlying price pressures suggests the central bank may keep interest rates on hold for now. The data, which was in line with forecasts, suggests that after recently hiking rates to clamp down on price rises, the central bank is likely to shift its focus towards boosting economic growth. Headline consumer price inflation rose to 6.6 percent in December and in 2012 as a whole from 6.5 percent in November and 6.1 percent in 2011, data published by the Federal Statistics Service showed. That was above the central bank`s official 5-6 percent target range for the year. But core inflation, which strips out volatile food and energy prices, rose by 5.7 percent compared with a year earlier - an improvement on November when annual core inflation was 5.8 percent.

A poor harvest last summer, coupled with the impact of increases in household utility prices that were delayed from before Presidential elections last March, led inflation to pick up sharply in the second half of last year from a post-Soviet low of 3.6 percent in April. Concerns about the rapid acceleration led the central bank to raise all its main interest rates by 25 basis points last September, despite concerns that tighter monetary would crimp economic growth. But a surprise fall in inflation in November was a sign that higher food prices had not fed through into inflationary expectations as many had feared, suggesting that the one-off monetary tightening in September had succeeded in containing the problem. The decline in core inflation in December provided further evidence that despite the rise in the headline rate, underlying inflation pressures are moderating. Analysts polled by Reuters late last month forecast that the central bank would begin cutting interest rates in the second quarter, as its concerns shift from controlling inflation towards stimulating the slowing economy. They forecast that inflation would fall to 6.1 percent by the end of 2013 - slightly above the central bank`s 5-6 percent target for the year.

06.01.2013 12:24 Growth of world economy in 2013 will be 3,2% in comparison with 3,1% in 2012 Economists surveyed by Reuters predict growth of world economy in 2013 for 3,2% in comparison with 3,1% in 2012. Thus, economy growth in 2013 to year will be insignificant and, besides, will depend as before on the USA and emerging markets because of stagnation in Europe. In many respects the forecast for 2013 depends on, whether developing countries will be able, such as Brazil and China, at last to show economic recovery which economists expected from them in 2012. Macroeconomic data from the People`s Republic of China testify lately that recession of the Chinese economy which appeared more long, than was expected, nevertheless ended, and in 2013 growth of gross domestic product of Heavenly Empire can exceed 8%. Experts don`t rest hope of acceleration of economic growth in the countries with the developed economy yet because many of them are still burdened with financial problems. Threats of stability of world economy habitually proceed from debt crisis in the eurozone captured by recession and possible further geopolitical shocks in the Middle East. The Swiss bank Credit Suisse also predicts low rate of restoration for world economy.

For 2013, allegedly, growth of world GDP will be at the level of 3,4% in real terms that is 0,3 percentage points higher than in the previous year. 30.12.2012 20:01 The World Bank raised its 2013 economic growth forecast for China The World Bank raised its 2013 economic growth forecast for China, citing the government`s fiscal stimulus plans and faster approval of large investment projects. China`s growth is projected to recover in 2013 to 8.4 percent due to the combination of monetary easing, local government fiscal stimulus, accelerated approval of investment projects and an upswing in the business cycle, the World Bank said in its East Asia and Pacific Economic Update published Wednesday. The bank also forecast that growth will reach 7.9 percent for 2012, significantly down from 9.3 percent in 2011. This was caused mainly by a slowdown in domestic demand following policy tightening to cool an overheating housing sector, and weaker external demand from high-income economies. The World Bank`s latest forecast for 2013 is higher than its earlier projection of 8.1 percent in a report released in October, but is slightly lower than the estimate made last week by the Chinese Academy of Social Sciences, a top government think tank, which forecast that GDP would grow by 8.5 percent next year, fuelled by government investment in infrastructure projects. 22.12.2012 14:18 U. K.`s gross domestic product rose less-than-expected in the last quarter U. K.`s gross domestic product rose less-than-expected in the last quarter, official data showed. In a report, the U. K. Office for National Statistics said that GDP rose to 0.9%, from 1.0% in the preceding quarter.

Analysts had expected U. K.`s gross domestic product to rise 1.0% in the last quarter. The Office for National Statistics said that the reduction in the rate of growth for the UK`s gross domestic product was caused by lower, revised estimates of output by the services industry and production industries including manufacturing. Construction activity was revised slightly higher. Despite the revision, the third quarter was the UK economy`s best performance since the second quarter of 2010, when GDP also rose 0.9%. Third-quarter growth also brought an end to a shallow nine-month recession, Britain`s second downturn since the banking crisis in 2008. 22.12.2012 13:57 US gross domestic product expanded at an annual rate of 3.1% from July through September U. S. economy expanded at an even faster pace than previously estimated in the third quarter, but the gains could be an outlier for the year as fiscal cliff worries and superstorm Sandy will likely slow growth in the final months of 2012. The nation`s gross domestic product--the broadest measure of goods and services produced in the U. S.--expanded at an annual rate of 3.1% from July through September, the Commerce Department said. The figure was revised up from last month`s estimate of 2.7% growth. Economists surveyed by Dow Jones Newswires had forecast a 2.8% growth rate. The latest reading "has not greatly changed the general picture of the economy for the third quarter," the Commerce Department said.

Consumer spending is now showing a modest pick up and imports a downturn. New data shows consumer spending advanced at a 1.6% rate during the quarter compared with the prior estimate of 1.4%, largely due increased healthcare outlays. Likewise, imports, which subtract from GDP gains, are now seen as falling 0.6% during the third quarter, compared with last month`s 0.1% gain. Lower oil prices contributed to the change. The latest data show that economic growth accelerated from the second quarter`s 1.3% rate.

Still, the biggest boost to third-quarter expansion came from factors that may be short-lived--significant upturns in private inventory investment and federal government spending. The change in private inventories contributed 0.73 of a percentage point to growth, but the boost could be an impediment in the fourth quarter because excess stockpiles may cause businesses to slow production. Real final sales--GDP less changes in private inventories--increased a more modest 2.4% in the third quarter. Federal government spending, which jumped 9.5% in the third quarter after contracting each of the prior four periods, is unlikely to continue to grow at that pace as Washington prepares for deep spending cuts next year. 12.12.2012 13:31 Russia`s GDP expanded 2.9 percent in the third quarter compared with a year earlier Russia`s economy grew at the slowest pace since it began recovering at the start of 2010 last quarter as agricultural output and construction volumes shrank. Gross domestic product expanded 2.9 percent in the third quarter compared with a year earlier, the Federal Statistics Service in Moscow said in an e-mailed statement. That was in line with the initial Nov. 12 estimate, which topped economist forecasts.

GDP expanded 4 percent in the second quarter and 4.9 percent in the first three months. The economy was hit by drought and by weaker demand from western Europe and China for metals and energy exports. With consumer spending slowing too, an early rebound is unlikely. The July-September growth rate was significantly lower than the figures recorded for the last two quarters: 4 per cent for April-June and 4.9 per cent for January-March. Economists now expect around 3.8 per cent for 2012 and 3.5 per cent for next year. 06.12.2012 21:18 ECB slashes 2013 growth forecasts, sees 1.2% in 2014 The European Central Bank slashed its forecasts for the euro zone economy on Thursday, showing a contraction next year was very likely before a return to growth in 2014. The ECB cut its estimate of gross domestic product (GDP) for next year to between a fall of 0.9 per cent and growth of just 0.3 per cent. The bank also cut its forecast marginally for 2012, giving a midpoint of -0.5 per cent compared to -0.4 per cent three months ago. It had previously forecast -0.4 per cent to 1.4 per cent for 2013, suggesting the economy was more likely to grow than contract. "Economic weakness in the euro zone is expected to extend into next year," Draghi said.

"A gradual recovery should start later in 2013." In their first forecasts for 2014, ECB staff forecast GDP growth of 0.2 to 2.2 per cent. The December macroeconomic projections also lowered forecasts for inflation next year to between 1.1 and 2.1 per cent from a previous forecast of 1.3-2.5 per cent. 03.12.2012 19:54 Chinese manufacturing returned to growth in November for the first time in over a year Chinese manufacturing returned to growth in November for the first time in over a year and the deep downturn in euro zone factories eased slightly, according to business surveys on Monday. Monday`s purchasing managers indexes (PMIs) suggested China, whose economy has misfired this year, is regaining its vigour going into 2013. If sustained, it could prove vital for the world economy next year since a meaningful recovery in Europe still looks a long way off. Monday`s final reading of HSBC`s China manufacturing PMI rose to 50.5 in November from 49.5 in October, the first time since October 2011 the headline number has topped the 50-point growth threshold.

While the decline among the euro zone`s embattled factories eased to an eight-month low in November, the latest PMIs showed the economy is on course for its worst quarter since the depths of early 2009. Markit`s Eurozone manufacturing PMI rose to 46.2 in November from October`s 45.4, though it stayed below the 50 mark dividing growth from contraction for the 16th straight month. There was little sign of an imminent turnaround, however, with the data merely showing factory activity, new orders and output declining at a slower rate. The big emerging economies that have contributed most to global growth in recent years have been sputtering of late, with India expected to post its weakest full-year GDP expansion in a decade and Brazil logging an unexpectedly weak third quarter. That has left investors once again hoping China will take up the slack, after seven straight quarters of slowing growth. British manufacturing activity shrank less than expected in November, but the sector remained fragile as orders edged down, a survey found on Monday. In the United States, the Institute of Supply Management (ISM) index of national factory activity, one of two PMI surveys due on Monday, declined to 49.5 for November, below the 50-line, from 51.7 in October. The most pressing threat to the U. S. economy remains a series of automatic budget cuts and tax hikes due at the end of the year that could plunge the country back into recession, unless opposing politicians can come to a deal to avert it. As of the weekend, neither side has been willing to yield. Aside from China, the outlook for other major Asian economies looks uncertain.

Monetary easing by the big developed world central banks has been blamed for pushing up the currencies of countries such as Korea and Taiwan, hampering their export-led recoveries. South Korea`s HSBC/Markit PMI edged up in November, but was still below the key 50-mark for the sixth month in succession. Taiwan`s PMI reading has also been below 50 for six successive months, with the headline number deteriorating to 47.4 in November from 47.8 in October on weakening demand at home and abroad. India`s factory activity has been expanding for over three-and-a-half years, although it remains well below the expansion rate seen in the years before the global financial crisis.