Macroeconomic News

07.04.2008 23:52 IMF again cuts global growth forecast for 2008 The International Monetary Fund cut its 2008 outlook for world economic growth for the second time this year, in a move that acknowledged housing and credit problems in the United States were exacting a heavy toll on the global economy. The IMF said it expects the pace of global growth to slow to 3.7 percent this year, down from its January forecast of 4.1 percent and lower still from the 4.8 percent rate it predicted in October last year. The latest revision puts world growth at its lowest since 2002, when growth was 3.1 percent, according to IMF data. "I can confirm the IMF`s current aggregate world growth forecast for 2008 is 3.7 percent," an IMF spokesman said, confirming reports about the IMF`s World Economic Outlook due on April 9. Earlier, IMF Chief Economist Simon Johnson said the U. S. economy has come to "a virtual standstill" and will remain weak in coming quarters owing to deeper problems in housing and credit markets. Still, Johnson avoided saying the United States was in recession. Media have reported that the IMF growth outlook will put U. S. economic growth for 2008 at 0.5 percent from a previous forecast of 1.5 percent. 06.04.2008 22:59 Eurozone inflation accelerated last month to the fastest pace since 1992 EURO-ZONE inflation accelerated last month to the fastest pace since 1992, official data showed on Monday, giving the European Central Bank more reason to look with concern on the announcement of a big wage agreement in Germany. Eurostat, the European statistics agency, said prices rose in March at a 3.5% annual rate in the 15 countries that share the euro, the highest rate since June 1992. The rate in February was 3.3%, which had itself been a record.

Inflation is running far above the European Central Bank`s 2% guideline. In recent months, high prices for energy and food in particular have pushed up inflation and are cited as reasons that household spending is being held back. The concern about rising prices is not confined to the euro zone. In a speech on Monday, the governor of the Bank of England, Mervyn King, noted that "food prices on world markets are more than 50% higher, and oil prices two-thirds higher, than they were a year ago". 29.03.2008 11:42 Russian GDP growth accelerates to 8.2% y/y in February 2008 Russia`s gross domestic product growth accelerated to 8.2 percent year-on-year in February from 7.4 percent in January, the Economy Ministry said in its monthly economic review.

The economy grew 8.1 percent last year. The ministry expects GDP to rise 7.1 percent in 2008 while analysts polled by Reuters predict 6.8 percent growth, according to the median forecast. "An acceleration of economic growth was a result of strong consumer and investment demand with a background of high growth tempo in the manufacturing sector," the ministry said. It said it expects the consumer price index (CPI) to rise 4.5-4.7 percent in the first quarter, compared with 3.4 percent in the same period last year when full-year inflation was 11.9 percent. 27.03.2008 23:23 US final GDP grew at a 0.6 pct annualized pace in the fourth quarter Consumer spending and exports were up slightly while business inventories were lower, leaving the government`s estimate for fourth-quarter economic growth unrevised, the Commerce Department said.

The economy grew at a 0.6 pct annualized pace in the fourth quarter, the same rate reported in the previous estimate. That matched the 0.6 pct median estimate from economists polled by Thomson IFR Markets. There was a small improvement in inflation. The headline number, measured by the Personal Consumption Expenditures price index, was revised lower to 3.9 pct from 4.1 pct. Consumer spending, which makes up roughly 70 pct of the US economy, was higher in the final report, revised up to 2.3 pct growth from 1.0 pct. The Commerce Department said the major increase was in spending on services, which was revised higher to 2.8 pct growth from 2.1 pct. Foreign trade continued to provide a large counter to the domestic US economic slowdown in the final Q4 report. Exports were revised higher to 6.5 pct growth from 4.8 pct. Imports fell slightly less than previously estimated, dropping 1.4 pct compared to 1.9 pct. That left the net effect on GDP growth higher, up from a positive 0.90 percentage points to a positive 1.02 points.

24.03.2008 23:01 Russia raises 2008 GDP growth forecast to 7.1 pct, inflation to 9.5 pct The economic development ministry raised its forecast for economic growth in 2008 to 7.1 pct from 6.7 pct, and its inflation forecast to 9.5 pct from 8.5 pct, Russian news agencies reported. Gennady Kuranov, director of the macroeconomic forecasting department said, cited by Interfax: "The inflation forecast has been raised because of the rise in food and wheat products prices". Russia`s economics ministry also raised its 2008 forecast for the annual average price of Urals oil, a benchmark blend, by 16% to $86 per barrel, a high-ranking ministry official said. "The oil price is rising. The average price will be approximately at the level of $86 per barrel. However, in the second half of the year, prices will go down," Gennady Kuranov said. The ministry earlier raised its Urals forecast for the year in late January, from $56 to $74. In 2006 the annual average price for the Urals oil was $61 per barrel. 23.03.2008 12:58 Euro area industrial production grew by 0.9% in January 2008 In January 2008 compared with December 2007, seasonally adjusted industrial production grew by 0.9% in both the euro area (EA15) and the EU27.

In December 20073 production remained stable in both zones. In January 2008 compared with January 2007, industrial production rose by 3.8% in the euro area and by 3.5% in the EU27. In January 2008 compared with December 2007, production of capital goods increased by 2.7% in the euro area and by 2.5% in the EU27. Durable consumer goods grew by 1.9% and 1.5% respectively. Intermediate goods rose by 0.8% in both zones. Non-durable consumer goods gained 0.6% in the euro area and 0.8% in the EU27. Production of energy fell by 2.9% and 2.1% respectively. In January 2008, among the Member States for which data are available, industrial production rose in ten, remained stable in the United Kingdom and fell in three. The highest increases were registered in Lithuania (+5.9%), Poland (+5.7%) and Slovakia (+4.6%), while the largest decrease was recorded in Portugal (-1.7%). Euro area annual inflation was 3.3% in February 2008, up from 3.2% in January.

A year earlier the rate was 1.8%. Monthly inflation was 0.3% in February 2008. EU annual inflation was 3.4% in February 2008, unchanged compared to January. A year earlier the rate was 2.1%. Monthly inflation was 0.4% in February 2008. 19.03.2008 21:37 Russia`s industrial production grew 7.5 percent in February 2008 Russia`s industrial production rose 7.5 percent year-on-year in February, Rostat reported. Analysts polled by the Russian news agency forecast that industrial production rose by 5.5 pct last month. In January-February industrial production rose 6.0 percent year-on-year.

Russia`s Mininstry of Economic Development and Trade forecasts that industrial production will grow 5.7 percent in 2008. Russia`s finance minister said he expected the country`s gross domestic product (GDP) to grow by at least 7.0 percent this year, agreeing with views that there were signs of overheating. Alexei Kudrin, speaking in parliament, also said M2 money supply would rise by 35-40 percent this year, down from 48 percent last year, while bank lending will increase by 30-40 percent, down from 50 percent last year. 18.03.2008 21:29 US February industrial output down 0.5 pct, capacity utilization 80.9 pct Output US factories, mines and utilities declined in February at the sharpest pace since October as capacity utilization fell to its lowest level in more than two years, the Federal Reserve said. Output US factories, mines and utilities declined in February at the sharpest pace since October as capacity utilization fell to its lowest level in more than two years, the Federal Reserve said. Output in February fell 0.5 pct, steeper than the 0.1 pct fall expected, while factories were using 80.9 pct of their capacity, down from 81.5 pct in January. Economists polled by Thomson`s IFR Markets had predicted a slight fall to 81.3. That`s the lowest level of utilization since November 2005. The Federal Reserve keeps a close watch on the operating rate to see if it is approaching levels where bottlenecks could develop and threaten to boost inflationary pressures. Manufacturing production fell 0.2 pct in February, while mining output rose 0.4 pct. Utility output plunged 3.7 pct in February after rising 2.2 pct in January.

14.03.2008 22:43 Japanese economy grows 3.5 percent in fourth quarter of 2007 Japan`s economy grew at a brisk 3.5 percent annualised pace in the fourth quarter of 2007, showing unexpected resilience in the face of growing fears of a US recession, official figures showed. Gross domestic product (GDP) grew by 0.9 percent compared with the previous quarter, unchanged from the initial estimate, the Cabinet Office said. The government said corporate capital investment in new equipment and factories increased by 2.0 percent quarter-on-quarter, down slightly from an initial 2.9 percent rise. Private and household consumption both grew by a tepid 0.2 percent. The Japanese economy is gradually rebounding from recession in the 1990s but consumer spending has remained sluggish, raising worries that the export-led recovery could be hit hard by a global slowdown.

Despite the better than expected GDP data, concerns about the health of the world`s second largest economy have grown amid fears of a US recession that could hit Japanese exports and corporate earnings. The government also reported that Japan`s current account surplus grew 8.1 percent in January from a year earlier to 1.24 trillion yen (12.0 billion yen) as exports grew and income on overseas investments rose. The figure was ahead of market expectations for a surplus of about 1.21 trillion yen. 11.03.2008 23:04 Chinese economist predicts GDP growth of about 10%, inflation - 4.8% Renowned Chinese economist Li Yining said here on Monday that China`s economy might grow by about 10 percent in real terms this year, higher than the government 8-percent target. The predicted growth, which is lower than last year`s 11.4 percent, does not mean a "big slowdown" of the Chinese economy, Li told a group of Chinese and foreign reporters. Li is a member of the National Committee of the Chinese People`s Political Consultative Conference (CPPCC), China`s top political advisory body now in its annual full session. Another CPPCC member, Director Liu Shucheng of the Institute of Economy under the Chinese Academy of Social Sciences echoed Li`s view, saying, "It`s out of question that the economy would maintain a growth rate of around 10 percent this year". Premier Wen Jiabao told the parliament on Wednesday that China`s gross domestic product (GDP) should grow by 8 percent on the basis of improving the economic structure, productivity, energy efficiency and environmental protection. Li also ruled out the possibility that the Chinese economy would slow down soon after the Beijing Olympic Games.

As for the government target to control consumer price rise at 4.8 percent, Li predicted "the goal could be reached unless international oil price continues to grow or emergencies or severe natural calamities take place".