Economic Growth – Avance Economico http://avanceeconomico.com/ Thu, 24 Nov 2022 05:03:21 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://avanceeconomico.com/wp-content/uploads/2021/07/icon-7.png Economic Growth – Avance Economico http://avanceeconomico.com/ 32 32 Deloitte hails the impact of the event in fostering economic growth for Scots as part of its own North Border growth plans https://avanceeconomico.com/deloitte-hails-the-impact-of-the-event-in-fostering-economic-growth-for-scots-as-part-of-its-own-north-border-growth-plans/ Thu, 24 Nov 2022 05:03:21 +0000 https://avanceeconomico.com/deloitte-hails-the-impact-of-the-event-in-fostering-economic-growth-for-scots-as-part-of-its-own-north-border-growth-plans/ An event organized by Deloitte to help drive sustainable and inclusive economic growth in Scotland saw participants from the public, private and third sectors and academia come together to bring about “tangible” change, according to the professional services firm. By Emma Newland There are 3 minutes Ms Mitchell, emphasizing that Deloitte wants to significantly expand […]]]>

An event organized by Deloitte to help drive sustainable and inclusive economic growth in Scotland saw participants from the public, private and third sectors and academia come together to bring about “tangible” change, according to the professional services firm.

Ms Mitchell, emphasizing that Deloitte wants to significantly expand its business in Scotland over the next two years, said: “[The event] was the occasion for [attending decision-makers] to really showcase and champion what was important, both to their organizations but to them personally, to combine and connect those priorities and generate greater shared understanding, and also to make joint commitments, to really, really drive change. Everyone seemed to be pulling in the same direction… The energy in the room was absolutely fantastic.

Regarding the genesis of the initiative which took place on Monday, November 21, she explained that when she took up her current role earlier this year – the first woman to hold the position – she wanted to use the power of mobilization of Deloitte in Scotland to unite all sectors to support economic growth. She added that the event showed a “genuine recognition that government and the public sector cannot do this alone, it has to be an industry-wide approach”, and the need for bold, long-term action. term, which is now very important. the time to seize the opportunities given the level of crisis in terms of the environment.

“There was definitely an appetite in the room to continue the dialogue,” Angela Mitchell, senior partner at Deloitte in Scotland, said of the event. Photo: contribution.

The event coincided with the release of new data showing the Scottish private sector was again in contraction mode and appeared ready for an “extremely difficult time”, and Ms Mitchell said businesses expect to that the next 12 to 24 months will be difficult. “CFOs are anticipating thinner profit margins, so it’s no surprise companies are focusing on resilience and moving towards more defensive balance sheet strategies, with cost control a top priority.”

Buoyant

As for the expected impact of the Leveling Up event, Ms. Mitchell sees the need to bridge the gap between policy and implementation and to “prioritize and focus on defined actions”. She also said: “There was definitely an appetite in the room to continue the dialogue, so I expect us to meet in six months. [with the five breakout groups]then maybe in a year to bring them together again, ideally with an even bigger number… it would be just awesome to look back in three, four years and think that we helped create this success.

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GDP growth expected to halve to 6.5% in Q2 FY23: Icra https://avanceeconomico.com/gdp-growth-expected-to-halve-to-6-5-in-q2-fy23-icra/ Mon, 21 Nov 2022 09:18:26 +0000 https://avanceeconomico.com/gdp-growth-expected-to-halve-to-6-5-in-q2-fy23-icra/ NEW DELHI: India’s economic growth is likely to slow to 6.5% in the second quarter of the current fiscal year (Q2FY23), largely due to movements in input costs for some more fuel-intensive sectors , as well as the impact of weak external demand on non-oil commodity exports, ratings agency Icra Ltd said on Monday. For […]]]>

NEW DELHI: India’s economic growth is likely to slow to 6.5% in the second quarter of the current fiscal year (Q2FY23), largely due to movements in input costs for some more fuel-intensive sectors , as well as the impact of weak external demand on non-oil commodity exports, ratings agency Icra Ltd said on Monday.

For the April-June period, the economy grew 13.5% from a year ago, fueled by domestic demand.

“Economic activity in the second quarter of FY2023 benefited from strong demand for contact-intensive services, healthy Government of India (GoI) capital spending and stockpiling of goods ahead of the festive season. “said Aditi Nayar, Chief Economist, Icra.

Downside risks stemmed from trends in mixed crop production revealed by forward estimates of kharif production, adverse movements in input costs for some more fuel-intensive sectors, as well as the impact of declining external demand on exports of non-oil goods. “Overall, we expect GDP growth in the second quarter of fiscal 2023 to be 6.5%, slightly higher than the September 2022 Monetary Policy Committee (MPC) forecast of 6.3% for this quarter,” Nayar said.

Travel-related services have recorded a healthy recovery since the start of FY23. They have benefited from pent-up demand related to business travel and increased confidence in the use of leisure services amid the decline in the trajectory of covid-19 infections.

“As many as nine of the 16 high-frequency service sector indicators reported double-digit year-on-year expansion in the second quarter of FY23. In particular, the combined revenue expenditures (revex) of the 24 state governments for which data is available posted a considerable annual growth of 16.7% in the second quarter of FY23,” said Icra.

In addition, other services, including education, healthcare, recreation and other personal services, are expected to have seen sustained demand during this quarter. However, the Center’s noninterest income expense contracted 1.4% in the second quarter of FY23.

Icra forecast services sector GVA growth at 9.4% in the second quarter of FY23.

Investment-related indicators such as production of capital goods, infrastructure/construction goods, aggregate capital expenditure of 24 state governments and gross capital expenditure of central government showed good performance. performance in the second quarter of FY23.

“The aggregate capital expenditure of these states reached Rs. 1.1 trillion in Q2 FY23 from Rs. 0.6 trillion in the first quarter of FY23, benefiting from the release of a double tranche of monthly central fiscal decentralization to the states in August 2022. Despite this, and the ample fiscal space available, the states’ capital expenditure in the first half of FY23 stood at Rs. 1.7 trillion, half of the rupees. 3.4 trillion incurred by GoI,” Icra said.

Manufacturing volume growth, as shown by IIP data, in Q2 FY23 was modest at 1.4% from prior year levels, dragged down by weak external demand and subdued domestic demand for durable consumer goods in a context of high input costs and fuel inflation.

While listed companies’ earnings were supportive in the second quarter of FY23, interim volume growth limited their ability to transmit the pain of rising costs to product prices, resulting in margin compression to varying degrees. various according to the sectors during this quarter.

ICRA forecasts year-over-year manufacturing GVA growth to fall to 3% in the second quarter of FY23, from 4.8% and 5.6%, respectively, in the first quarter of FY23 and the second quarter of exercise 22.

Based on early agricultural production advance estimates, ICRA expects agricultural GVA growth of a modest 2.5% for the second quarter of FY23. Unexpected heavy rains in the States northwest and central India at the end of the monsoon season could have a negative effect on crop production compared to estimates.

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Boone’s Ridge offers potential economic growth for EKY https://avanceeconomico.com/boones-ridge-offers-potential-economic-growth-for-eky/ Fri, 18 Nov 2022 21:32:00 +0000 https://avanceeconomico.com/boones-ridge-offers-potential-economic-growth-for-eky/ MIRACLE, Ky. (WYMT) — Boone’s Ridge was created with a mission to bring economic growth to the region, and construction looks brighter every day. “It will be one of the biggest tourist attractions in the state, one of the biggest in the region, capitalizing on the beauty, wildlife, history and culture of this region,” said […]]]>

MIRACLE, Ky. (WYMT) — Boone’s Ridge was created with a mission to bring economic growth to the region, and construction looks brighter every day.

“It will be one of the biggest tourist attractions in the state, one of the biggest in the region, capitalizing on the beauty, wildlife, history and culture of this region,” said the president of the Appalachian Wildlife Foundation, David Ledford.

All kinds of wildlife lurk in the area, making Boone’s Ridge a great location for anyone who enjoys outdoor adventure.

“In over a year, including migration, someone could see over 200 species of birds here,” David Ledford said.

Weekday broadcast of WYMT Mountain News First at Four

The Appalachian Wildlife Foundation is also preparing indoor educational exhibits, as well as a restaurant and a chance to take home a piece of Appalachian culture.

“We’re going to have a 14-unit mall that will look like an old town, but with local, regional, and national artists featured in this mall,” Ledford said.

The expected number of visitors is impressive.

“With one million visitors per year, the annual impact in the region will be over $200 million per year. When all four phases are complete and we are operational, we will have approximately 360 employees,” said Ledford.

Due to supply chain issues, Ledford said Boone’s Ridge will not open to the public until spring 2024. It was originally scheduled to open in summer 2023.

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Ethiopia is now East Africa’s largest economy: Abiy https://avanceeconomico.com/ethiopia-is-now-east-africas-largest-economy-abiy/ Tue, 15 Nov 2022 19:17:30 +0000 https://avanceeconomico.com/ethiopia-is-now-east-africas-largest-economy-abiy/ By Tesfa-Alem Tekle Nov. 15, 2022 (NAIROBI) – Prime Minister Abiy Ahmed on Tuesday affirmed that Ethiopia has succeeded in becoming the largest economy in the East African region and the third largest in sub-Saharan Africa. Abiy painted a rosy picture of his country’s economy in his remarks during his address to the House of […]]]>

By Tesfa-Alem Tekle

Nov. 15, 2022 (NAIROBI) – Prime Minister Abiy Ahmed on Tuesday affirmed that Ethiopia has succeeded in becoming the largest economy in the East African region and the third largest in sub-Saharan Africa.

Abiy painted a rosy picture of his country’s economy in his remarks during his address to the House of Peoples’ Representatives.

He said the Ethiopian macro-economy has been resilient and continued to register growth amid various bottlenecks resulting from man-made and natural challenges, including the bloody conflict in the Tigray region, the Ukraine- Russia, the COVID-19 pandemic and the drought.

The Prime Minister prided himself on this alleged achievement, further saying that the trajectory of economic growth has impressed even global economists.

During Ethiopia’s fiscal year, the country’s gross domestic product (GDP) grew by 6.4 percent and the country expects to achieve 7.5 percent growth this year, Abiy said.

Ethiopia’s economy reached $126.7 billion at the end of the fiscal year concluded.

In addition, the country’s per capita income reached $1,212, he added.

“Ethiopia’s economy has risen to 1st in East Africa and 3rd in Sub-Saharan Africa,” the prime minister said citing a World Bank report, although it is not yet clear from which report. he talked.

“However, we do not agree with the report in its entirety. Because Ethiopia has both formal and informal economic activity, we believe it has achieved higher growth than the report indicates,” he said.

The challenges have sparked a culture of hard work in the country, the prime minister said, adding that several measures were being taken to fight inflation.

Among the growth sectors, Abiy mentioned agriculture which plays a leading role in the national economic development.

Agriculture grew by 6.1%, he said, citing wheat-growing productivity as the driver of the results.

In addition, the country has planted 4.7 billion new coffee seedlings to increase the country’s coffee production, he said, noting that this fiscal year, Ethiopia planned to produce 20% more coffee. than the previous year.

Ethiopia is also striving to export fruits to the international market as it has been able to record encouraging results in the sector.

Recently, the Horn of Africa nation announced that it is preparing to export wheat to the international market starting this year.

Ethiopia’s aspiration, according to the Prime Minister, is to make the country’s economy one of the continent’s giants.

Despite heralded economic growth, the country’s more than 115 million citizens are, however, experiencing the highest inflation in a decade, currency restrictions and mounting debt amid reports of massive government spending on the war effort.

Earlier this year, Parliament reportedly approved a $1.7 billion supplementary defense budget.

(ST)

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How is Hyderabad poised for steady and balanced economic growth? | #KhabarLive https://avanceeconomico.com/how-is-hyderabad-poised-for-steady-and-balanced-economic-growth-khabarlive/ Sun, 13 Nov 2022 08:45:36 +0000 https://avanceeconomico.com/how-is-hyderabad-poised-for-steady-and-balanced-economic-growth-khabarlive/ The progressive field of knowledge is making great strides in Hyderabad by aligning all technological pathways and pumping on target to grow, prosper and profit. This provides stability in 360 degree growth consistency. Hyderabad Knowledge City is the favorite address of the young generation, and T Hub (Technology Hub) is undoubtedly the new face of […]]]>

The progressive field of knowledge is making great strides in Hyderabad by aligning all technological pathways and pumping on target to grow, prosper and profit. This provides stability in 360 degree growth consistency.

Hyderabad Knowledge City is the favorite address of the young generation, and T Hub (Technology Hub) is undoubtedly the new face of Hi-Tech City. While a field trip would corroborate this, the thought and action that went into the scene is irrelevant. T Hub is a partnership between the state, three major universities (IIIT, ISB and Nalsar) and the commercial sector. One of the fastest growing IT cities in India, Hyderabad is now a rival to Chennai and Bangalore thanks to HI-TEC City.

The huge opportunity that Hyderabad offers to attract and host start-ups, innovation-driven technology companies, banking and financial services companies, and the ever-growing presence of IT and ITES is attracted by l the city’s relatively low-cost superior infrastructure, diverse pool of engineering talent, affordable cost of living, cultural neutrality, and successively proactive and progressive governance.

The life sciences, biotechnology and pharmaceuticals ecosystem Besides the growth of the IT & ITES sector, it is encouraging to see the growing ecosystem of life sciences, biotechnology and industrials pharmaceutical. Most of the companies are multinationals and large Indian companies located in Genome Valley, a high-tech business district spread over 600 km² covering the suburbs of Turakapally, Shamirpet and Medchal. The estate here is designed and developed along with the HI-TEC city and financial district and continues to be the center of attraction for real estate developers like Neovantage (formerly MN Park), RX Propellant and the pioneering presence of 200 acres by IKP (ICICI Knowledge Park).

South Hyderabad has a ready base of land, buildings and infrastructure and promotes biomedical devices, electronics and cellular communications etc. south. Telangana has a robust computer software sector which will complement the computer hardware sector. The Indian government has approved an IT investment region for Hyderabad along with two electronics manufacturing clusters. Major healthcare industry in Telangana will support biomedical devices and medical electronics

Aviation ecosystem

Hyderabad is home to a large number of aerospace and defense research laboratories such as DRDO, DRDL, RCI, BDL, MDN, Ordnance Factory, DMRL, etc. In addition to Tata’s big five investments in aerospace, there is also the GMR MRO. A group of innovative aerospace SMEs also exist in Hyderabad, which have supplied components to the Chandraayan and Mangalyan initiatives.

The Hyderabad Aerotropolis of approx. 1,500 Acres, located at Shamshabad International Airport, is one of India’s largest integrated airport-based mixed-asset ecosystems offering a world of exciting real estate opportunities. From land for K-12 educational institutions to industrial and non-SEZ SEZs, from ready-made office space to purpose-built campuses; from retail to hospitality, a whole new city is emerging that continues to attract end users, investors and developers.

Growth in Dispersion (GRID)

Telangana government policy, evident by its GRID nomenclature, is far-sighted and aimed at addressing immediate congestion concerns. The vision is to drive the growth of IT and ITES across the city by decluttering current Western prominence. Moreover, there is presence of more than 200 companies in the segment of small and medium enterprises spread across the East, North and South. The GRID policy is also designed to incentivize businesses to establish IT parks, shopping malls, hotels and residential spaces in the northern and southern areas of Hyderabad. This will eventually lead to a comprehensive real estate development. After the formation of Telangana, the tides turned for Hyderabad as the enthusiastic and determined government embarked on a systematic plan for economic development across the city without ignoring the basic necessities of electricity, water, equity, law enforcement and stable governance.

With a large supply comes an opportunity for scale. While the uninitiated can only summarize the volume of “advertised” commercial projects, the actual delivery of Class A space in Class A locations is meeting demand well and as a result the rental price continues to trend upwards.

Analysts and sentimentalists can draw different conclusions from the current real estate situation; but, the way forward is undisputed. This city has all the assets of a travel destination. Since ecosystems are difficult to locate or replicate and infrastructure is a major factor, Hyderabad stands out significantly from other cities. The main real estate business forces are tracked. The residential area and the commercial part follow quite steadily as the local economy matures.

Despite the setbacks of the Covid-19 pandemic, the split from the former state of Andhra Pradesh and other factors, Hyderabad is poised to experience steady and balanced economic growth, setting a new standard for industrial cities sustainable in the world. #KhabarLive #hydnews #hydlive

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Edward Prescott, Nobel Prize-winning economist who saw harm in quick fixes, dies at 81 https://avanceeconomico.com/edward-prescott-nobel-prize-winning-economist-who-saw-harm-in-quick-fixes-dies-at-81/ Wed, 09 Nov 2022 21:07:57 +0000 https://avanceeconomico.com/edward-prescott-nobel-prize-winning-economist-who-saw-harm-in-quick-fixes-dies-at-81/ Edward Prescott, a Nobel Prize-winning economist who has urged policymakers to take a long-term view of economic strategies and resist short-term tinkering on issues such as jobs and interest rates, arguing that the a search for a rapid boom can often be followed by a sobering crisis, died Nov. 6. at a health care center […]]]>

Edward Prescott, a Nobel Prize-winning economist who has urged policymakers to take a long-term view of economic strategies and resist short-term tinkering on issues such as jobs and interest rates, arguing that the a search for a rapid boom can often be followed by a sobering crisis, died Nov. 6. at a health care center in Paradise Valley, Arizona. He was 81 years old.

His son, Edward, said his father was receiving treatment for cancer.

Dr Prescott’s work with Norwegian economist Finn E. Kydland, with whom he shared the 2004 Nobel Prize in Economics, was as much about high-level politics as consumer psychology – with particular relevance to concerns current trends regarding rising food and energy prices. and the many voters looking for a culprit.

Dr Prescott challenged the widely held outlook among Western central bankers and economic policy chiefs favoring direct interventions, such as raising interest rates to fight inflation or lowering borrowing costs in the goal of reviving business growth and consumer spending.

He argued that the adjustments may provide temporary relief but end up causing disruptive economic peaks and valleys. A calmer path, he argued, is better for financial markets and job growth, and reduces the risk of public and corporate mood swings.

The key to any good policy, summarizes Dr. Prescott, is making a commitment and sticking to it.

“What I am about to describe to you is a revolution in macroeconomics,” Dr. Prescott wrote in the American Economist in 2006.

The essay then distilled theories from a seminal 1977 paper by Dr Prescott and Kydland, titled “Rules Rather Than Discretion: The Inconsistency of Optimal Plans” and written in an era of American “stagflation”, a combination of high inflation and stagnant economic growth. .

Fluctuations and unpredictability in economic policy fuel turbulence, exacerbate boom-and-bust cycles, and lead to potentially damaging decisions on the home front, they argue.

If a family, for example, expects higher taxes in the future, they may spend more now and save less, Dr Prescott theorized. If companies anticipate interest rate hikes in an attempt to control inflation, they can raise prices in advance and keep the inflationary cycle going.

“You shouldn’t think in terms of controlling the economy,” Dr. Prescott said in 2004. “It leads to bad outcomes. You should think in terms of commitment to good political rules.

“Much of his work challenged the way we modeled economic policy, forcing us to dig deeper into our theories and test our theories against data,” said Art Rolnick, former director of research at the Federal Reserve Bank of Minneapolis, where Dr. Prescott was an advisor while he held various teaching and research positions, including at Arizona State University since 2003.

The Nobel committee said that Dr Prescott and Kydland, now at the University of California, Santa Barbara, challenged views on the “credibility and political feasibility of economic policy”.

For some critics, however, Dr. Prescott and Kydland were on intellectually shaky ground.

Their theories have trampled on one of the architects of economic policy since the Great Depression, John Maynard Keynes. According to the Keynesian vision, those in charge should always have control over the economic levers. During crises, increase government spending and lower interest rates, Keynes advised. To fight inflation, raise rates and allow for higher unemployment.

Dr. Prescott countered that the Keynesian model is incomplete. He said economic cycles are influenced more by disruptions – new technologies or major events such as wars or the covid pandemic – than by monetary policies.

Peter Lindert, professor emeritus of economics at the University of California, Davis, wrote in 2003 that Dr. Prescott was “heavily laden with speculation” and “educated, intelligent and plausible fiction”. In 2004, former treasury secretary Lawrence Summers told the Wall Street Journal that Dr Prescott’s theories on business cycles were “implausible”.

Dr. Prescott acknowledged an inescapable fact: his theories often clashed with the realities of democracies, where economic downturns prompt action quickly and politicians use fiscal policy changes as campaign promises.

“Nothing is easy in politics,” Dr Prescott said in a 2005 speech.

Edward Christian Prescott was born on December 26, 1940, in Glens Falls, New York, where his mother was a librarian and his father was an industrial engineer with Imperial Wallpaper and Pigment Co.

Dr Prescott said he held summer jobs at local paper mills as a teenager. “I learned to know, love and respect my colleagues who did not have the opportunities I had”, he would later write.

He graduated from Swarthmore College in 1962 with a degree in mathematics and earned a master’s degree in operations research in 1963 from the Case Institute of Technology (now Case Western Reserve University) in Cleveland. He earned a doctorate in economics from the Carnegie Institute of Technology (now Carnegie Mellon University) in 1967.

Before becoming a professor at Arizona State, Dr. Prescott has taught economics at the University of Pennsylvania, Carnegie Mellon, the University of Minnesota, and the University of Chicago. At Carnegie Mellon in the early 1970s, Dr. Prescott met Kydland, then a graduate student, and became his thesis supervisor.

A decision to spend 1974-75 at the Norwegian School of Business and Economics in Bergen, Norway resumed Dr. Prescott’s collaboration with Kydland, who was on the faculty.

Dr Prescott often said that one of his great pleasures was teaching and working as a doctoral advisor to “help students through this very difficult transition from student to researcher”, he wrote in his memo. biography for the Nobel Committee.

A University of Minnesota tribute to Dr Prescott said he enjoyed walking into his colleagues’ offices and asking with a smile, “What major advances are you making in economics today?”

Survivors include his 57-year-old wife, former Janet Dale Simpson; sons Edward and Andrew; daughter Wynne; and six grandchildren.

Despite Dr. Prescott’s rejection of monetary policy interventions, he was outspoken in his belief in certain conservative ideologies: that lower taxes stimulate economic growth and that Medicare and Social Security benefits should be cut. He regularly took aim at higher tax rates in Europe that fund programs such as health care, but which he said also dampen economic dynamism.

In 2009, Dr. Prescott joined more than 200 economists and others in an open letter from the libertarian Cato Institute opposing President Barack Obama’s American Recovery and Reinvestment Act after the major fiscal upheavals of the global economic downturn.

“Lower tax rates and a reduced burden on government are the best ways to use fiscal policy to spur growth,” said the letter, which was published in The New York Times and other publications. .

Dr. Prescott has also taken a public stand against estate taxes, called death taxes, on a person’s assets that are bequeathed to survivors.

“Economists like simplicity. It’s one of our most endearing traits,” he wrote in a 2006 op-ed in The Wall Street Journal. “As soon as you complicate things by interposing yourself between a man and his intentions, you create all sorts of distortions that are often suboptimal (and are the devil to model). Taxes excel at these shenanigans. And those distortions don’t stop when the grim reaper comes calling. Ashes to ashes, dust to trust.

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Stable monetary policy and cautious easing are essential https://avanceeconomico.com/stable-monetary-policy-and-cautious-easing-are-essential/ Mon, 07 Nov 2022 01:45:00 +0000 https://avanceeconomico.com/stable-monetary-policy-and-cautious-easing-are-essential/ CAI MENG/CHINA DAILY Since the US Federal Reserve began to tighten monetary policy in March, the external environment has changed dramatically, posing greater challenges for China’s monetary policy. The market has been paying close attention to how China’s monetary policy will unfold in the coming years. month. The accumulating complexity regarding China’s monetary policy has […]]]>

CAI MENG/CHINA DAILY

Since the US Federal Reserve began to tighten monetary policy in March, the external environment has changed dramatically, posing greater challenges for China’s monetary policy. The market has been paying close attention to how China’s monetary policy will unfold in the coming years. month.

The accumulating complexity regarding China’s monetary policy has rarely been seen in the past. The downward pressure on economic growth cannot be ignored, although the recovery is underway. Resurgences of COVID-19 affected consumption and private sector investment rose only 2.3% year-on-year in August, approaching its lowest level in 20 years.

Chinese GDP growth only reached 0.4% in the second quarter. The slowdown in the real estate sector is the main culprit, as it accounts for almost 30% of the country’s GDP.

From a domestic demand perspective, a relatively loose monetary policy, combined with various policy tools and measures, seems necessary to support the real economy.

The Fed has embraced extremely aggressive monetary tightening by raising interest rates by 375 basis points with six continuous hikes so far this year.

Such a significant tightening over a short period will certainly have an impact on the global economy. Nearly 70 of the world’s major economies had to follow suit by raising their interest rates. Large amounts of global capital have shifted into US dollar assets, pushing the US dollar index to its highest level in 20 years. Major currencies such as the Euro and Japanese Yen depreciated significantly, leading to greater volatility in the international capital market.

Under such circumstances, following the steps of other economies to tighten monetary policy may be an option for China in theory. But given China’s downward economic pressure, monetary tightening is definitely not feasible right now.

The inflation surge in the United States will not reach a tipping point in the near term. The Fed could introduce two or three more interest rate hikes before the end of the year to bring inflation under control. Global monetary tightening is therefore to be expected in the fourth quarter.

In this sense, domestic and international markets will present opposite challenges to the evolution of China’s monetary policy. Decisions need to be made carefully to come up with specific policies.

It can be expected that Chinese interest rates will not be high, which will result in a further expansion of the widening interest rate differential between China and the United States. China will continue to face capital outflows given the high US dollar index.

Global policy tightening may ease through the first half of 2023. The challenges facing Chinese monetary policymakers may not fundamentally change over the next two quarters.

One of the main challenges that monetary policy makers currently face is the pressure to depreciate the renminbi. Although China’s economic resilience is stronger at present and the financial risks that affected markets between 2015 and 2016 do not exist simultaneously, the recent depreciation of the Chinese currency and pressure from capital outflows cannot be ignored.

In open economies, asset prices are closely linked to exchange rates. Renminbi depreciation will have a negative impact on the financial accounts, and particular attention should be paid to the successive risks to be exercised in the financial sector. Given the continued Fed interest rate hikes and the recession in Europe, preventing and controlling related risks in the financial sector should be the top priority for Chinese monetary policymakers.

In such an environment, China’s monetary policies should be firmly anchored in the country’s current situation, the main thing of which is to stabilize economic growth. Counter-cyclical and cross-cyclical adjustments need to be made.

Related policy tools, including structural tools, should be better used to support the real economy. But the pricing tools cannot simply be adopted in a relaxed way to avoid further depreciation of the renminbi.

In general, China’s monetary policy should be implemented to maintain reasonably abundant market liquidity. Short-term interest rates should be kept relatively low.

The reserve requirement ratio can be lowered further. The current weighted RRR in the Chinese banking system is around 8.1%, while the all-time low was around 6%.

Over the past three years, RRR reductions have mainly been enacted when the loan-to-deposit ratio has increased rapidly. The market reacted quickly to RRR reductions in such circumstances. But the situation this year is a little different. The ratio of additional loans to deposits has fallen by 4 percentage points so far, while that of existing loans and deposits has also declined. This contrasts with the significant increase in loans and deposits in recent years.

This indicates adequate liquidity in the banking system this year. The lack of demand from the real economy has also manifested itself. If there is a major difficulty in achieving economic growth, we are still likely to see further interest rate cuts to inject more liquidity. But in general, the global money supply will not undergo substantial adjustments in the short term.

The People’s Bank of China – the central bank – has rolled out several structural lending or rediscounting tools over the past two years to address the country’s key development areas or key strategies, including lending tools to foster research science or upgrading equipment. Between now and the end of this year, such structuring tools could be provided to sectors in difficulty, including agriculture and transport. The tools can also be used to stimulate consumption and stimulate demand.

There is always the possibility of further interest rate cuts, but the room for maneuver is very limited. China’s consumer price index continues to rise and it could exceed the normal policy target of 3% next year. Imported inflation also affects China.

In light of the complexity of the global economy and the global economic recession that could arise in 2023, Chinese monetary policymakers should be ready to provide further easing, especially in the short term, to ensure policy stability and economic stability. economic growth.

I do not agree that more flexibility should be allowed for the renminbi exchange rate. The exchange rate should only be reasonably elastic. A significant depreciation will not only have a negative impact on financial markets, capital and financial accounts, but may lead to related risks in other financial variables.

Excessively high exchange rate elasticity can undermine the stability of market expectations and lead to unnecessary panic—and further depreciation. A so-called adequate elasticity can turn into laissez-faire policies and harm the normal functioning of the macroeconomy.

As monetary policies tighten globally, the marginal positive results of China’s monetary easing will be very limited. Rational market expectations can hardly be based on such easing.

In this sense, a stable monetary policy is of utmost importance for China in the short term, which is especially true for the fourth quarter of this year and the beginning of 2023. Even if there is demand for easing, it must be conducted with great caution.

The author is chief economist at Zhixin Investment and honorary director of the Faculty of Economics and Management of East China Normal University.

Opinions do not necessarily reflect those of China Daily.

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Barclays cuts China’s GDP after forecasting recession in US and Europe https://avanceeconomico.com/barclays-cuts-chinas-gdp-after-forecasting-recession-in-us-and-europe/ Fri, 04 Nov 2022 01:04:00 +0000 https://avanceeconomico.com/barclays-cuts-chinas-gdp-after-forecasting-recession-in-us-and-europe/ Chinese export growth has slowed in recent months after surging at the height of the pandemic around the world. Pictured is a wind turbine blade being loaded onto a cargo ship at Yantai Port on November 1, 2022. CGV | Visual Group China | Getty Images BEIJING — Barclays cut its forecast for China’s economic […]]]>

Chinese export growth has slowed in recent months after surging at the height of the pandemic around the world. Pictured is a wind turbine blade being loaded onto a cargo ship at Yantai Port on November 1, 2022.

CGV | Visual Group China | Getty Images

BEIJING — Barclays cut its forecast for China’s economic growth next year to 3.8%, partly on expectations of lower global demand for Chinese goods.

The company’s US and European economics teams predict recessions next year, Hong Kong-based Barclays’ Jian Chang and Yingke Zhou said in a report on Wednesday.

As a result, they now expect Chinese exports to fall 2% to 5% in 2023, compared to previous expectations of 1% growth, according to the report.

“China’s share of global exports has declined this year,” analysts said. “Foreign companies appear to have shifted their orders from China to its Asian neighbors, including Vietnam, Malaysia, Bangladesh and India, for the production of some key labor-intensive goods.”

Exports remain an important driver of China’s economy, especially as the pandemic has disrupted global supply chains and generated intense demand for healthcare and electronics products.

Chinese exports jumped 29.8% last year in U.S. dollars, following a 3.6% increase in 2020, according to the customs agency.

However, the pace of growth has slowed this year. In September, year-to-date export growth was 12.5%.

The last time Chinese exports fell was in 2016, according to customs data.

Real estate train

Barclays’ new Chinese GDP forecast for 2023 of 3.8% comes after cutting it to 4.5% in September due to falling real estate investment.

Analysts’ latest GDP decline includes expectations for a steeper decline in real estate investment, of 8% to 10%, compared to previous forecasts of a single-digit decline.

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China’s real estate sector and related industries contribute about a quarter of GDP. The housing market has slumped over the past two years as Beijing has clamped down on developers’ heavy reliance on debt for growth, while consumer demand for home purchases has plunged.

Tight Covid controls have restrained consumer sentiment overall, and hopes that China will soon ease restrictions helped propel a rally in stocks this week. Beijing has yet to make an official announcement regarding changes to its “dynamic zero-Covid policy”.

High household debt

Even if the country reopens fully, Barclays analysts said they remain cautious about the extent of the recovery in China’s consumer and service sectors due to rising household debt.

In fact, their analysis found that China’s household debt-to-disposable income ratio has in recent years surpassed that seen in the United States in the years leading up to the 2008 financial crisis.

“Our base case assumes no major stimulus announcements, at least before the Central Economic Work Conference in December, when the new administration sets its policy priorities,” the Barclays report said.

In the third quarter, official data shows China’s economy grew 3% for the year so far.

That’s below the official target of around 5.5%, but close to lower investment bankers’ expectations for 2022.

Other banks are cutting their forecasts for 2023

In recent months, other analysts have lowered their forecasts for China’s GDP for next year.

Nomura lowered its forecast to 4.3% from 5.1%. China’s chief economist Ting Lu noted the impact of Covid, weaker exports, a slow recovery in real estate and a weaker car market after passenger car sales surged this year.

In September, Goldman Sachs cut its 2023 GDP growth forecast to 4.5% from 5.3%, “given the delayed rebound from China’s reopening.”

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UPDATE 1-Mexican economy grows 1.0% in third quarter https://avanceeconomico.com/update-1-mexican-economy-grows-1-0-in-third-quarter/ Mon, 31 Oct 2022 12:19:25 +0000 https://avanceeconomico.com/update-1-mexican-economy-grows-1-0-in-third-quarter/ (Adds details, context) MEXICO CITY, Oct 31 (Reuters) – Mexico’s economy expanded between July and September, the fourth consecutive quarter of growth, driven mainly by the primary sector, a preliminary estimate from the national statistics agency showed on Monday. Gross domestic product (GDP) rose 1.0% in the third quarter from the previous three-month period, slightly […]]]>

(Adds details, context)

MEXICO CITY, Oct 31 (Reuters) – Mexico’s economy expanded between July and September, the fourth consecutive quarter of growth, driven mainly by the primary sector, a preliminary estimate from the national statistics agency showed on Monday.

Gross domestic product (GDP) rose 1.0% in the third quarter from the previous three-month period, slightly above forecasts of a 0.7% increase and up from growth 0.9% in the previous quarter.

Compared with the same quarter a year earlier, Latin America’s second-largest economy grew 4.2%, the statistics agency added, above forecasts for growth of 2.8%, marking six consecutive quarters of growth.

Mexico’s finance ministry said Friday that indicators of economic activity in the third quarter indicate

annual economic growth of 2.4% in 2022

according to forecasts.

Following a mission to Mexico, the International Monetary Fund declared in early October that

Mexico’s growth is expected to slow

over the next few quarters, even as its fiscal and monetary policy put it in a good position to weather the global turmoil.

INEGI is expected to release final GDP data for the third quarter on November 25. (Reporting by Anthony Esposito; Additional reporting by Gabriel Araujo; Editing by Steven Grattan)

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Canada’s economic expansion slows to 1.6% as recession looms https://avanceeconomico.com/canadas-economic-expansion-slows-to-1-6-as-recession-looms/ Fri, 28 Oct 2022 14:10:44 +0000 https://avanceeconomico.com/canadas-economic-expansion-slows-to-1-6-as-recession-looms/ (Bloomberg) — Canada’s economic growth rate halved in the third quarter, ahead of what is expected to be even steeper later this year. Bloomberg’s Most Read Preliminary industry-based data shows gross domestic product rose 0.1% in September, Statistics Canada reported Friday in Ottawa. This follows an unexpected gain of 0.1% in August, against a stable […]]]>

(Bloomberg) — Canada’s economic growth rate halved in the third quarter, ahead of what is expected to be even steeper later this year.

Bloomberg’s Most Read

Preliminary industry-based data shows gross domestic product rose 0.1% in September, Statistics Canada reported Friday in Ottawa. This follows an unexpected gain of 0.1% in August, against a stable reading expected by economists for this month.

Overall, the pace of monthly gains was sufficient to produce annualized growth of 1.6% in the third quarter, according to an initial estimate from the statistics agency. Although almost certainly revised, it is down sharply from a pace of 3.3% in the second quarter and 3.1% in the first three months of the year.

The Canadian currency was little changed after the report, falling 0.3% to C$1.361 per US dollar at 10:05 a.m. Toronto.

The figures show that inflation and rising interest rates did not completely derail economic activity over the summer, with retail sales posting a rebound in August. But the economy is clearly slowing down.

Economists forecast even slower growth in the fourth quarter, a key reason the Bank of Canada slowed its pace of interest rate hikes this week, warning of a slowdown ahead.

On Wednesday, the central bank expects growth to slow to 0% to 0.5% later this year and in the first half of 2023, with risks of a technical recession. He had predicted third-quarter growth to be 1.5% annualized.

Based on Bloomberg surveys, economists forecast growth of 1% at an annualized rate in the third quarter.

“The key finding is that the economy maintained slightly better momentum in the fall than expected, in part due to a strong grain harvest,” Douglas Porter, chief economist at Bank of Montreal, said in a report. to investors. “Nevertheless, we continue to expect economic momentum to slow closer to zero as we head into the fourth quarter.”

There are actually three separate gauges of quarterly GDP: revenue, spending and production by industry – the latter coming on Friday. The most-watched metric is the spending-based figure that will be released on November 29.

Governor Tiff Macklem has already raised the Bank of Canada’s policy rate by 3.5 percentage points since March, one of the strongest tightening cycles in the central bank’s history. This week, he signaled that policymakers are “closer” to the end of this tightening phase.

The latest GDP numbers “should be no change for monetary policymakers who appeared more dovish than expected on Wednesday,” Royce Mendes, head of macro strategy at Desjardins Securities, said in a statement to investors. He added that the focus will now be on the October jobs data due next Friday.

(Updates with market and economist reaction.)

Bloomberg Businessweek’s Most Read

©2022 Bloomberg LP

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