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Possibe risks for the economy in 2011

viliyana89 — Mon, 03 Jan 2011 05:31:21 +0000

The central banks of major economies in the world in unstable balance sheet in recent years, trying to avoid a severe shock to the financial system. In 2008, central banks and governments in developed countries were rushing to rescue troubled banks, which were identified as too big to fail. In 2010 they began to juggle with the public debt of eurozone countries. Government has managed to preserve them intact in 2010, but the failure of only one party can lead to serious consequences for the world economy, The Economist wrote in a commentary on risks to global economy in 2011. The danger is that European banks are still in delicate condition and remain highly dependent on European Central Bank (ECB) funding. Indeed, central banks are expected to urgent financial injections in times of crisis against good collateral. But in Europe, short-term financing has become a constant, and the ECB of “ER” for troubled banks became a place of their permanent residence. Indeed, despite all efforts of governments and central banks, many long-term problems of the world economy remain unresolved, said Economist. Banks are still unstable, the U.S. housing market has stagnated and global imbalances in the economy remain.
While the ECB bought time for European banks by its actions in 2010, the governments of Greece and Ireland have received loans. However, they appear as temporary means to rescue the situation and the measures were not comprehensive enough to calm financial markets or to stop the spread debt crisis. So 2010 ended with the fall of Portugal’s rating by Fitch, a Greek government securities are more likely to pass into the category of high-risk bonds. In European countries gradually started talking and imposing penalties on lenders from the private sector in future rescue operations. But this will only reinforce the distrust of investors, while rescue programs ignore the basic problem of lack of competitiveness in many European economies. This leads to another critical point for the economy in 2011 – the lack of global coordination. In April 2009 the parties still failed to reach consensus on the G-20, which no longer exists. While Europe pursues state economies, China is trying to curb bank lending and the U.S. chose the path of the new fiscal incentives. It seems certain that the Fed will continue to accompany the fiscal stimulus the U.S. government with near-zero interest rates and new financial injections. The need for such emergency measures underlines how weak the economy remains. While developed countries are still struggling with the threat of deflation, then in the developing world are growing fears of inflation.
The Liberal monetary policy in the U.S. raised the price of gold more than 1400 dollars an ounce, while oil jumped above $ 90 a barrel. Low interest rates in developed countries provide incentives for the inflow of speculative money flows to emerging markets. This creates a dilemma for their governments that want to raise interest rates as a measure to fight inflation, but this will further encourage speculators. It is therefore very likely that asset prices in developing countries to increase disproportionately in 2011. Another risk is the expansion of the currency war by means of trade protectionism. The aim of many developing countries is to limit the appreciation of their currencies against the dollar to the rate at which expensive Chinese yuan. This list of risk factors is the reason for the cautious stance of the issue for the economy this year compared with the prevailing optimistic forecasts for 2011. So far, central banks and governments around the world managed to avoid disruption in the economy, but not solve its fundamental problems. A postponement of which can not last forever.

EU gives 64.4 billion EUR for economy recovering

viliyana89 — Sat, 24 Apr 2010 03:32:08 +0000

Promoting economic recovery, investment in European youth and infrastructures of the future are the priorities of the draft budget for 2011 adopted by the European Commission on April 27, 2010, reported portal “Europe”. Of the 142.6 billion EUR 64,4 billion EUR are allocated to actions for economic recovery (3.4% compared to 2010). In addition, funds in support of the flagship initiatives of the EU Strategy for 2020 (growth) accounted for around 57.9 billion EUR (about 40% of the budget). “The ambition of the draft is to continue to support economic recovery, together with Member States, particularly in favor of the more vulnerable in this situation after the crisis, as reflected in the new budget comprehensive EU approach to job creation and growth “said Budget and Financial Planning Janusz Levandovski. He stressed that the draft budget adopted today provides Europe and its citizens incentives to develop the economy of the future: its main components are research and innovation, sustainability and inclusion. This draft is aimed at helping young people to be better prepared for future promotion of small and medium enterprises make best use of EU funds for the bailout.
64.4 billion EUR: budget for future sustainable growth
Currently, the Structural Funds and Cohesion Fund is actively applied in the field. Although appropriations for commitments increased by 3.2 percent, the payment appropriations for continuing projects increased by 16.9 percent to reach 42.5 billion EUR. Expected increase in payment appropriations to contribute effectively to create the necessary incentives to national economies, while structural adjustment be encouraged to model for sustainable growth, defined by the recently adopted EU strategy for growth and jobs. Implementation of the European economic recovery plan also came on the agenda of more than EUR 1 billion to finance the implementation of site energy projects adopted in 2009 and early 2010, in Capture and Sequestration dioxide, offshore wind and energy infrastructures. Similarly, around EUR 500 million will finance the approved projects for broadband in rural areas. While the financing costs associated with marketing, and direct support for Common Agricultural Policy (CAP) and rural areas will maintain the same level funding for environmental protection program through Life + will increase by another 8.7 % to reach 333 million EUR.
In the draft budget for 2011 also provides increased investment for research, development and innovation, infrastructure and human capital. Funds for the 7 th Framework Programme for research and technical development will increase by 13.8 percent to reach 8.6 billion EUR; ever EU has invested so much money in this program. Research and development alone can not lead to economic recovery: the means of trans-European transport and energy networks will increase by 16.8% (1,3 billion EUR), while for the Competitiveness and Innovation Programme (CIP) will be allocated with 4.4 percent more vehicles than in 2010 (549 million EUR).
These are resources for the future of our youth and strengthening citizenship
“More than 20% of European youngsters are unemployed,” said Janusz Levandovski. “This is absolutely unacceptable. The EU budget should help them prepare for professional careers through education and exchange.” For this purpose the financing of the “Lifelong Learning” will increase by 2.6% (1,1 billion EUR), which will allow students to provide over 200,000 scholarships under the Erasmus program. The additional contribution of 120,000 more students will be funded through the Youth in Action, through which it distributed 127 million EUR (+1,6%) to support the employment of young people through non-traditional forms of training. Funding for programs in the area of freedom, security and justice will increase by 12.8 percent, representing the largest increase in budget lines in the draft budget for 2011 a significant contribution to security and protection of liberties (24.4%) and management of migratory flows (18.5%) shows the importance given to implementation of the Action Plan for EU citizenship justice, security, asylum and immigration for the next five years, which was recently adopted by the Commission.
EU global player
Sustainable level of funding for activities related to the EU as a global player (5.6%) was confirmed by three main proposals:
a) increasing the EU’s commitment under the UN Conference on the Millennium Development, which took place last autumn (65 million EUR);
b) an increase in EU aid to developing countries to tackle climate change (65 million EUR);
c) providing a new means of promoting economic and social development of the Turkish Cypriot community (25 million EUR).
Administrative costs
Administrative costs for all EU institutions will continue to be 8.3 billion EUR or 5.8% of the budget. The Commission will continue to respect its commitment to a zero growth policy for recruitment and internal allocation of staff to cope with the challenge of new tasks.
“This is the first budget since the Lisbon Treaty enters into force,” said Janusz Levandovski. “There are two main differences: first, the whole procedure is much faster than in the past, given that there is only one reading European Parliament instead of the previous two. Secondly, for the first time the Council and Parliament have equal powers in approving the budget. This suggests to increase more than ever cooperation between the three EU institutions involved in the process. ”
The Council will communicate its position on the draft in June and the European Parliament in October. In case of disagreements between the European Commission – in its role as honest broker – will start a conciliation procedure, lasting 21 days. It is expected that the final budget for 2011 to be approved by Parliament in November.

US economy stepped away from the crisis

viliyana89 — Sat, 06 Feb 2010 18:15:35 +0000

The U.S. president Barack Obama said the U.S. economy has overcome the crisis and a growing again. “We see that picked the economy from the crisis and grow again. Companies began to hire people to work, but this does not happen as fast as we want,” the president said in an interview with CBS. Labor market in the U.S. occur recovered somewhat – Unemployment fell to 9,7 percent in January from 10 percent in December. Economy has grown by 5.7 percent in the fourth quarter of 2009 and during the third growth was 2.2 percent. Barack Obama announced that he had invited leaders of the Republicans and the Democrats for a discussion on health reform on 25 February. The President and the democratic leaders in Congress seeking to push through healthcare reform law, once again the Republicans are able to block bills in the Senate. According to sociological polls Obama and Democrats in Congress are not demanding enough Republican support for health reform. Discussion on 25 February will be attended by leading representatives of the Republican and Democratic party of both houses of Congress – the House of Representatives and Senate. Is optimistic and the Minister of Finance Timothy Гейтнер, who in an interview with ABC News, quoted by the agency Reuters, says that currently the risk of re-recession in the U.S. is very low. However Geytnar acknowledges that recovery will be slow and uneven.
The biggest threat, according to Reuters is growing indebtedness of the United States, which could undermine the country’s credit rating. News agency points out that ratings agency Moody’s warned some time ago that anemic growth in the U.S. economy and problems of fiscal deficit may undermine kreditniyareyting the country.

Гейтнер however, believes differently. He was categorical that narstvashtiyat debt will not affect the credit rating. And regarding the reported increase almost 6 percent of the U.S. economy during the last quarter of 2009 Гейтнер said it commemorated “rescue” after the financial crisis hit the country in late 2007

PetroChina gain access to oil sands in Canada

viliyana89 — Wed, 30 Dec 2009 16:06:30 +0000

The Chinese oil company PetroChina obtain permission to harvest oil from the Canadian oil sands deposits in the Canadian province Albarta. The price which will give energy company to acquire a 60% share in both deposits is 1.7 billion dollars, police BBC. Both fields have a common saving of 175 billion barrels of oil. The only Saudi Arabia has more deposits of similar type. but the extraction of raw materials of sand is expensive and difficult process, says BBC. Now because of the increasing price of raw material (77% jump from the beginning of 2009) in such investments provide a return on deposits, the agency adds. The deal was great proving the Chinese economy is developing faster and getting second strongest economies of the world. The company is the largest Chinese petroleum companies, operating all over the world.
Fast developing business sector with high profits and low investments.

Optimistic Predictions for the “Black Friday”

viliyana89 — Fri, 27 Nov 2009 06:01:17 +0000

Over 134 million Americans planned to enter the market or buy from the Internet during this long weekend that begins with days to Thanksgiving, which is today and will reach its peak tomorrow in the so-called Black Friday. Last Friday of November has no official status of the holiday, but many employers allow their employees to not come to work that day. Most shops open at 5 am, and some even earlier, and already have a full Christmas decorations and the doors of their rank the most eager buyers to take advantage of huge discounts. Aforementioned numbers exceed that of last year, but far less than the stated expectations before Black Friday of 2007 writes Reuters. Only a few months, the attitude of the retailers had been so optimistic. Recent studies show that though the desire to please his family led the Americans to open their wallets wider, since in recent months, residents of the United States were significantly diminished costs. More than one-third of the citizens surveyed by Deloitte said they expect to spend more money in the last days of the year, and 86% of them declare that they will raise the cost of gifts.
For its part, retailers declare that they will not resort to drastic reductions from last year to attract consumers. According to market research reductions will not pass 50%, a year earlier in most areas reached 75%. Because consumer spending expected to pull the U.S. recession of the shares of chain retail sales grew by 47 percent since the beginning of the year in which only 23 reached the broad U.S. index, S & P 500.

Strong jump in sales of older homes in the U.S.

viliyana89 — Wed, 25 Nov 2009 22:49:09 +0000

Sales of existing homes in the United States reached an annual rate of 6.1 million pcs. in October, or 10.1 percent more than the pace reached in September. These forward Bloomberg, citing data from the National Association of Realtors real estate. The pace is well above expectations of analysts who forecast it to reach 5.7 million pcs., The agency adds. From there, considering that the results are largely due to a tax credit that families receive in the purchase of first homes, which amount to 8 thousand dollars. Compared with the same period last year house prices in October fell by 7.1%, the smallest drop of more years, it. Data was taken positively by the market, S & P 500 rose by 1.9% to 1111.53 points. Meanwhile it became clear that Americans will spend an average of 390 dollars on holiday gifts this year.
The amount is 28 dollars with less than that reported for the Christmas period last year.

Deforestation in the Amazon is dangerous for the South American economy

viliyana89 — Sat, 14 Nov 2009 17:29:21 +0000

The Deforestation in Amazon should be reduced by half to reach the level of 20 years ago, the authors recommend a study of the Brazilian Institute for Space Research (INPE). Processed satellite images for the entire 2008 show that forests are felled in an area of 12.911 thousand square kilometers. Preliminary data for 2009 show that this year would fall to destruction 7 thousand sq. km. Scientists say the reduction of forested areas in Amazon River in 2008 equals 20 years of logging, since the region is seen from space. Scientists state that more than half of the Amazonian forest (68%) are privately owned, but the felling is illegal. Deforestation in Brazil and especially in the Amazon jungle and measures for their protection is one of the painful issues of both domestic and foreign policy. According to government sources, deforestation in Amazonia could cost loss of $ 1 trillion. Show the forecast data of the United Nations Environment (UNEP). Because of deforestation increased evaporation, not only in Brazil but also its neighboring countries in South America, which already threatens the agricultural sector in the region. INPE data show that the Amazon basin daily evaporate 20 billion tons of water.
Some of this moisture back and because scientists believe that “the preservation of Amazon River must think not only from an environmental standpoint, but mostly from an economic, as if this trend to increase evaporation in the next 50 years industry of agricultural production in the region will be reduced to minimum health and the export will not be able to think at all. ” Brazil accounted for 47.8 percent of total cut tropical forests on Earth in the period from 2000 to 2005 For comparison, in Indonesia, the second country in the world of cut forests to harvest timber from 7 thousand square meters a year, a total area of forest cut is less than 12.8 percent of total cut forests in the world. Ecologists and economists have repeatedly reproached Brazil that inefficient use of its natural resources. Thanks to the new president Lula da Silva has adopted a program to limit logging in the forests of Brazil and INPE surveys are part of this program. Institute of Space in Brazil reported that the real effect of the program will be able to speak at the end of March 2010, when the expected monitoring report for 2009.

Top of the Business Confidence in Germany

viliyana89 — Tue, 27 Oct 2009 07:00:45 +0000

Business confidence in Germany rose to a 13-month high in October because of the improving growth outlook for Europe’s largest economy. Measurements of the in institute Ifo index, which includes views at 7000 Executive Directors in October increased to 91.9 percent from 91.3 percent. The analysts expected index to reach 92 points. Index reached its lowest point in 26 years since a bottom in March from 82.2 points. A separate report has been reported that production in the country has returned to the path of growth after 14 months of contraction recorded Markit Economics Institute. Ifo Institute’s index of the current situation rose to 87.3 points from 87.1 points in September. After the data the euro remained without significant change from the levels of 1.5030 EUR / USD.
In August the European single currency grew 20% against the dollar.

Chinese economy will overtake the Japanese in 2011

viliyana89 — Tue, 20 Oct 2009 12:54:15 +0000

China will overtake Japan in economic development and will become the second largest world economy over the next two years. This will give Beijing more influence on the world economic and political scene and will enhance the reputation of the ruling Communist Party in the country, say analysts interviewed by AP. Statistics to be published this week in Beijing will probably show that gross domestic product (GDP) of China grew by an impressive 9.5% yoy in the third quarter. This will further reduce the difference to Japan, which is expected to account most 1 percent GDP growth annually in the third quarter. Economists expected in 2010 or in 2011 China to shift its Asian rivals of the position of second largest economy in the world that Japan held for more than 40 years. Shift in the rankings, however, would be largely symbolic and will have little impact on world trade, according to analysts. In 2008, GDP of the United States amounted to 14.2 trillion. dollars annually, while that of Japan – to 4,9 trillion. dollars. Before the economic crisis to hit China, the country’s economy is growing at double-digit annual growth from 2003 to 2007 to reach a value of GDP of 4,3 trillion. dollars in 2008, according to the World Bank.
China’s economy grew by 6.1% yoy in the first quarter, then accelerated its annual growth to 7.9 percent in the second quarter. For all in 2009 analysts expect the country’s economic growth to exceed the target set by the Government of 8% annually, providing employment to numerous people. The acceleration of the Chinese economy this year was helped by government measures to stimulate economic activity of the total value 4 trillion. yuan (586 billion dollars). In the first half of the country banks to loan a record value of 7.4 trillion. yuan, which sharply contrasts with the situation in Japan.

Trichet forecasts a slight rise in inflation

viliyana89 — Thu, 08 Oct 2009 10:26:33 +0000

The President of the European Central Bank, Trichet told a news conference after the meeting of the institution that current levels of base rate are appropriate and recent economic data confirms this. At the meeting it was decided to maintain the rate of 1 percent, supported unanimously, he added. According to him, it was noted that good signals for economic stabilization and expects inflation to moderate in positive levels, and inflation stability will be maintained to support the private costs. Trichet said the moderate growth of loans maintain low inflation. In August the annual inflation rate was minus 0.2%. Economic recovery, although expected to be “uneven”, said President of the ECB. He warned that the risk to see if further recovery of tightening fiscal policy. Departure from current policies of fiscal stimulus must be made at a time when the recovery remain
Once again, Trichet said that it is extremely important support of the United States in order to strengthen the position of the dollar. Asked about the possible passage of the discussion of commodity prices (like oil) in euro, Trichet said: “There is no strategy or campaign to promote the use of the euro internationally.