The Daily Business Digest » Economics

China opposes being largest energy consumer

admin — Tue, 27 Jul 2010 15:24:56 +0000

China has surpassed the claims of being the top- energy consumer globally. China has rejected the proofs of International Energy Agency saying it is unreliable. According to IEA calculations most of the energy comes from coal which is a heavy polluter. Hence the total accounts to the quarter of US consumption which was in the former first.

China is not the same which was in the previous decade it has become prosperous China. The blooming industries in China are helping the Chinese Families to buy many modern home electronics. Chinese Cabinet National Energy Administration announced the doubt over the statistics of IEA. The report of the rejection of IEA statistics came on last Tuesday by Xinhua.

The official even confirmed that IEA is really not understanding the efforts of China. The efforts of China to cut the use of energy,pollution and global statistics of Energy consumption. During the climate change talks China spoke about the energy consumption patterns of developed nations.

It is indeed correct from China’s stand point to assert that it is not the largest energy consumer in the world.
Also when you say that you are the largest energy consumer then you also become the largest environment polluter, which is not a tag you would like to hold.

African Century?

admin — Sat, 24 Jul 2010 12:54:27 +0000

Gordon Brown has used his first major speech since leaving office to say the future growth of the world economy is reliant upon the development of Africa.

Speaking in Kampala, the Ugandan capital, the former UK prime minister said he wanted to see the continent achieve its full potential.

Mr Brown also made light of losing the British general election in May.

He said he was someone who “spent some time as a politician before becoming a community organiser”.

Mr Brown contrasted himself with President Barack Obama “who spent some time as a community organiser before becoming a politician”.

Speaking to Ugandan political leaders, Mr Brown said he wished to see the creation of an “African century”.

Yuan to be stable

admin — Sun, 20 Jun 2010 16:29:32 +0000

China’s central bank says it plans to keep the Chinese yuan “stable” and there will be no immediate revaluation of the currency.

The comments come just a day after the bank announced plans to make the exchange rate more flexible.

But Chinese authorities have ruled out a large, one-off adjustment in the exchange rate.

China has come under increasing international pressure to change its currency policy.

The US in particular has complained that China is artificially keeping the value of the yuan low to help its exporters at the expense of foreign competitors.

On Saturday, US President Barack Obama welcomed China’s promise of increased flexibility in exchange rates, but the Chinese central bank’s latest comments cast doubt over the scale of its plans.

US home foreclosures up by 44%

admin — Thu, 10 Jun 2010 18:53:03 +0000

The year 2010 is not going to be good for the US economy as a whole, if you go by the latest US home foreclosure data for the month of May 2010. Yes, the home seizures by the banks and other lending institutions from defaulters has climbed up to a record 94000 homes in the month of May 2010, due to high unemployment levels.
In the next few months the foreclosure rate is expected to remain high , which in turn would put pressure on the housing price recovery across the country. And that could be a big dampener for new home buyers, for whom the tax breaks also would not be available from next month.
The oil spill in the Gulf of Mexico is only expected to make foreclosures accelerate further, because the house prices are already going down in the Gulf region due to the oil spill.
So the housing sector recovery could be very difficult in the coming months, and further drop in housing prices could only make things worse.
Given the huge budget deficit that the US government is running on, it does not have any scope for providing another round of housing stimulus measures.
So expect the 2010 GDP growth for US to be bad, especially in the second half.

Venezuela plans to increase crude production by 10%

admin — Mon, 24 May 2010 03:23:05 +0000

The Venezuelan economy depends on crude oil exports for nearly 90% of the export revenue, and the crashing crude oil prices in the last two years has pushed the country into deep recession. And it is only possible for the country to earn extra valuable dollars by pumping out more oil than what it has committed to OPEC.
The country is already reeling under deep recession and it is also suffering from inadequate foreign fund flow. So it is working hard to increase oil production. It is now in the process of adding 10% more to the production capacity from the end of this year i.e, in the next few months. That could well be a good news for oil consuming neighbor i.e, US.
The country is also in the process of drilling more new wells with the target to increase the crude oil production capacity by another 40% in the next three years. Even if only 50% of the planned increase comes into effect, there could be a big improvement in the overall crude oil supplies for the world. That could in turn keep the crude oil prices in acceptable price range.
We can also expect some production increase in Iran and Russia as these countries are also reeling under economic distress.

Germany may take time to clear Greece bailout plan

admin — Sun, 02 May 2010 15:45:52 +0000

The Greece bailout plan has been cleared by IMF and European Union authorities but the largest financial contributor to the scheme i.e, Germany is yet to take a call on the issue. The Germany government has been facing lot of domestic resistance to any Greece bailout contribution and the Greece government does not want to take any chance with the public opinion.
So Germany is now saying that it would read through the entire agreement between Greece and IMF / EU, understand the issues thoroughly and then take a call on whether to contribute or not.

Will Greece survive the financial crisis?

admin — Sun, 02 May 2010 15:41:50 +0000

The Greece government is not able to raise a penny in the international money markets after Standard and Poors downgraded the country to Junk status. The Greece government needs over 40 billion dollars of loans in the next three weeks to roll over the maturing debts, for which it is seeking the help of IMF and European Union countries.

The financial support is going to come through only if Greece agrees to bring lot of austerity measures that could cost the massive Greece public lot of hardship. The Greece unions are planning to go for major protests across the country in the next few days to force the government to not implement the austerity measures.

How Greece government and the public handle the dangerous financial mess up over the next several months is a billion dollar question which would affect the entire European Union setup as a whole.

Greek unions set for a stand off with government

admin — Sun, 02 May 2010 15:17:07 +0000

The Greece talks for a major financial spending cuts including wage freeze and salary bonus cuts are over yesterday. The Greece government has agreed for a major cut in government sector salaries and pensions apart from agreeing to increase the tax rates of fuel for the public.
Now with one in every three Greek working in the public sector, the implementation of the austerity measures may not be that easy, say political experts. The Greek unions have always been able to push through what they wanted with the Greece government for the last several years, and they have only grown stronger.
But with the entire economy on the verge of collapse without the planned austerity measures, the world has to just wait and see how the Greek public takes the measures.

BoJ pledges to keep rates low

admin — Fri, 30 Apr 2010 07:23:45 +0000

The Japanese economy is continuing to face very high unemployment levels by it’s own standards, despite special stimulus measures by the government in the last two years.
The latest set of data indicate that the Japanese economy is reviving slowly but the deflationary trends are still there.
So the Bank of Japan has indicated that it would continue with the low interest rate regime for some more time to come, and it may also be ready with other tools to prop up the economy.
The Japanese economy depends to a greater extent on exports to US and Europe, and the downturn in those two regions in the last two years has pulled down the Japanese economy into recession.

S&P downgrades Greece to “Junk” status

admin — Wed, 28 Apr 2010 02:01:48 +0000

The curtains are finally coming down for Greece, and it now does not have any other option than to go back to IMF and European Union for financial aid. The Greece public still do not want to take any cut in their spending style, so the rating agency has pulled down the rating to junk status.
This rating downgrade would mean that Greece would not be able to raise any money from the global markets henceforth, which would be good enough to pull down the entire European economic system.
The rating agencies also downgraded Portugal rating by few notches, but still it stays above Junk status. The rating agencies are expecting the latest round of downgrades to force these countries to get back to financial overhaul over the coming days.