Bank of England hikes 2014 growth forecast

Bank of England hikes 2014 growth forecast

 

By Roland JACKSON (AFP)

 

London — The Bank of England ramped up its 2014 economic growth forecast on Wednesday as Britain's recovery picks up speed, and vowed to keep interest rates low after tweaking its guidance.

 

Gross domestic product (GDP) was set to grow by 3.4 percent this year, the central bank said in its latest quarterly report.

 

That was up sharply from an earlier estimate of 2.8 percent given in November.

 

"The recovery has gained momentum. Output is growing at the fastest rate since 2007, works are being created at the quickest pace since records began, and after four years above target the inflation rate is back at 2.0 percent," governor Mark Carney said.

 

Carney took charge of the BoE last August and launched the forward guidance policy, under which the BoE had stated that it will not raise record-low interest rates until the unemployment rate falls to at least 7.0 percent.

 

However, the bank forecast on Wednesday that the unemployment rate -- which has fallen more sharply than expected amid the strengthening recovery -- would hit 7.0-percent in the coming months.

 

As a result, the BoE added it would look at a "broad range of indicators" at that point, in order to assess the health of the labour market and establish whether borrowing costs should rise.

 

Under the latest guidance, the bank will seek to absorb all the spare capacity in the economy over the next two to three years to allow a full recovery.

 

When interest rates do begin to increase, it will be a gradual and limited process, according to the BoE.

 

The central bank also pledged to maintain its £375-billion ($620-billion, 456-billion-euro) bond-buying stimulus programme, known as quantitative easing, until at least the first rate hike.

 

Interest rates have stood at a record low level of 0.50 percent since March 2009, when it also launched the vast QE stimulus to aid growth.

 

The bank meanwhile predicted fourth-quarter GDP growth would be revised to 0.9 percent, from 0.7 percent.

 

It also expected the economy would grow by a robust 0.8 percent in the current first quarter.

 

"Forward guidance is working," Carney told journalists.

 

"Expected interest rates have remained low even as the economy has recovered strongly.

 

"Uncertainty about interest rates has fallen. Most importantly, UK businesses have understood the message."

 

Canadian national Carney was last month forced to dampen talk of a rate rise any time soon, following news that the unemployment rate fell faster than expected to 7.1 percent, a near five-year low point.

 

The bank stressed on Wednesday that borrowing costs "may need to remain at low levels for some time to come" as Britain grapples with the ongoing legacy of the financial crisis and other economic headwinds.

 

"If and when the time comes that the economy can sustain higher interest rates, bank rate is expected to rise only gradually," Carney said.

 

"For a sustained and balanced recovery, the degree of stimulus will need to remain exceptional for some time."

 

The BoE also predicted that 12-month inflation would remain at, or slightly below the bank's official 2.0-percent target, over the forecast period.

 

The economy expanded at the fastest rate last year since before the global financial crisis, growing by 1.9 percent in 2013.

 

That was the fastest pace since 2007.

 

"Despite the very sharp and unexpected fall in unemployment, the MPC still sees plenty of slack in the economy that must be used up before raising bank rate," noted HSBC economist Simon Wells.

 

"Phase two of forward guidance offered no new targets or thresholds, but by arguing that there is a lot of spare capacity and with inflation projected to be below target 2-3 years ahead, governor Carney wanted to send a signal that rates are not moving soon."

 

Copyright © 2014 AFP. All rights reserved.

 

(Agence France-Presse, 13 Thursday February 2014 The Roman)

 

 

Exports give German economy boost in Q4

Exports give German economy boost in Q4

 

Frankfurt (AFP)

 

Growth of the German economy, Europe's biggest, picked up fractionally at the end of last year, propelled by buoyant exports, official data showed on Friday.

 

German gross domestic product (GDP) grew by 0.4 percent in the period from October to December, slightly faster than analysts' expectations and also up from growth of 0.3 percent in the preceding three months, the federal statistics office Destatis said.

 

"Positive impulses came primarily from net foreign trade," Destatis explained.

 

"According to preliminary calculations, exports grew much more strongly than imports. By contrast, the signals from domestic demand were more mixed," the statisticians said.

 

Public spending stagnated and consumer spending was down slightly, but positive developments were seen in investment.

 

Investment in both construction and equipment was up strongly, but companies also sharply reduced their stockpiles "and that put the brakes on growth," Destatis said.

 

Taking 2013 as a whole, Destatis confirmed a preliminary estimate from last month which showed that German growth slowed to just 0.4 percent last year, the slowest growth for four years.

 

Copyright © 2014 AFP. All rights reserved.

 

(Agence France-Presse, 14 Friday February 2014 The Roman)

 

 

Italian economy begins recovery with 0.1 percent growth

Italian economy begins recovery with 0.1 percent growth

 

[caption id="attachment_12328" align="alignnone" width="400"] (People walk in a street on 20 Thursday December 2012 The Roman in Milan, Italy (AFP/File, Tiziana Fabi))[/caption]

 

(AFP)

 

Rome — Italy's economy began a recovery in the fourth quarter of 2013 with 0.1-percent growth -- the first positive result following a two-year recession, official data from the Istat agency showed on Friday.

 

The preliminary data also showed that gross domestic product (GDP) contracted by 1.9 percent in 2013.

 

The economy showed zero growth in the third quarter, meaning the recession formally ended then.

 

Copyright © 2014 AFP. All rights reserved.

 

(Agence France-Presse, 14 Friday February 2014 The Roman)

 

Abu Dhabi, Dubai reveal 2014 economic growth forecasts

Abu Dhabi, Dubai reveal 2014 economic growth forecasts



[caption id="attachment_11726" align="alignnone" width="400"] (The UAE capital Abu Dhabi expects GDP growth of 6.7 percent this year. (File photo: Shutterstock))[/caption]



Abu Dhabi and Dubai, the largest economies of the United Arab Emirates, today released growth forecasts for 2014, Reuters reported.



The UAE capital Abu Dhabi sees gross domestic product (GDP) growth of 6.7 percent this year, according to Shorooq al-Zaabi, head of development indicators at the Department of Economic Development.



The emirate posted real GDP growth of 7.4 percent in 2013, up from 5.6 percent in 2012, Reuters reported.

Zaabi added that Abu Dhabi’s oil production would rise steadily to 3.114 million barrels per day (BPD) in 2017 from 2.907 million BPD in 2015.



But it expects oil prices to fall moderately, to $95 a barrel in 2017 from $109 last year.



Dubai expects its economy to grow by an inflation-adjusted 4.7 percent this year, accelerating to over 5 percent in 2015, according to a Department of Economic Development official quoted by Reuters.



Dubai’s economy reportedly expanded by 4.9 percent in the first half of 2013.



(With Reuters)



(By Staff writer | Al Arabiya News, Dubai)



(Al Arabiya News, 3 Monday February 2014 The Roman)

Tunisia trims 2014 growth forecast to 3.8%

Tunisia trims 2014 growth forecast to 3.8%

 

[caption id="attachment_11721" align="alignnone" width="400"] (Tunisia’s central bank cut its growth forecast for 2014 to 3.8 percent, down from 4 percent. (File photo: Reuters))[/caption]

 

Tunisia's economy will expand less quickly than hoped this year, the central bank said on Thursday, cutting its growth forecast to 3.8 percent from 4 percent.

 

The economy grew by 3 percent last year.

 

The bank did not say why it was trimming its forecast, which came against a background of turmoil in many emerging economies as the U.S. Federal Reserve scales back its monetary stimulus.

 

The bank said the budget deficit was 8.3 percent of gross domestic product in 2013.

 

Under pressure from international lenders to cut subsidies, the government hopes to reduce it to 6.5 percent this year, according to the 2014 budget.

 

Three years after toppling their autocratic leader Zine El-Abidine Ben Ali in an uprising that inspired other 'Arab Spring' revolts, Tunisia is progressing toward full democracy after approving a new constitution this week.

 

A new caretaker government has taken over to run the country until new elections later this year.

 

But despite political progress, high living costs and a lack of economic opportunities are still the main concerns for many Tunisians.

 

The International Monetary Fund on Wednesday approved a $507 million loan tranche for the North African country, the second part of a $1.5 billion credit agreed at the start of 2013.

 

The central bank said foreign currency reserves stood at11.230bn Tunisian dinars ($6.98bn) by Jan. 28, equal to 102 days of import cover, compared to 106 days a month earlier.

 

(Reuters, Tunis)

 

(Al Arabiya News, 30 Thursday January 2014 The Roman)

 

 

US economy grew at 3.2% pace in fourth quarter

US economy grew at 3.2% pace in fourth quarter

 

Washington (AFP)

 

The US economy grew at an annual rate of 3.2 percent in the 2013 fourth quarter, slightly stronger than expected despite the partial government shutdown, official data released Thursday showed.

 

Most analysts had penciled in 3.0 percent gross domestic product growth in the October-December quarter, following more robust growth of 4.1 percent in the third quarter.

 

The Commerce Department said the fourth-quarter slowdown mainly reflected lower inventory investment, as well as a larger decrease in government spending, a downturn in housing investment and weaker business investment.

 

Offsetting those restraints were pick-ups in net exports and consumer spending.

 

The full effects of the October 1-16 federal government shutdown, which furloughed thousands of workers, "could not be quantified," the Commerce Department said.

 

However, it said, it estimated the effects of the reduction in hours worked by federal employees as trimming 0.3 percent point off GDP growth.

 

(Agence France-Presse, 30 Thursday January 2014 The Roman)

 

Britain posts fastest annual growth

Britain posts fastest annual growth



London (AFP)



Britain's economy grew at the fastest rate last year since before the financial crisis but output dipped in the final quarter of 2013, official data showed on Tuesday.



Gross domestic product expanded by 1.9 percent in 2013, the biggest expansion since 2007, the Office for National Statistics (ONS) said in a statement.



GDP had grown by only 0.1 percent in 2012, while the IMF recently said it expected the British economy to grow by 2.4 percent this year.



Economic output meanwhile grew by 0.7 percent between October and December last year compared with the third quarter of 2013, when GDP increased by 0.8 percent, the ONS added.



Chancellor of the Exchequer George Osborne said that overall, Tuesday's data was "more evidence that our long term economic plan is working".



He added in a statement: "But the job is not done, and it is clear that the biggest risk now to the recovery would be abandoning the plan that's delivering jobs and a brighter economic future."



Prime Minister David Cameron's coalition government has embarked on a massive austerity drive since coming to power in 2010, two years after the start of the financial crisis, in a bid to bring down a record deficit inherited from the previous Labour administration.



The fourth-quarter slowdown meanwhile took the shine off Britain's recent recovery.



"The 0.7-percent rise in UK GDP in the fourth quarter is a touch disappointing given the recent strength of the business surveys," said Martin Beck, economist at Capital Economics research group.



"But it still takes full-year growth in 2013 to 1.9 percent, the best performance since 2007 and possibly the strongest growth in the G7", which comprises also the United States, Germany and Japan.



In the fourth quarter, Britain achieved increases in output from the industrial and services sectors, while construction fell, according to the ONS data.



The slowdown could meanwhile dampen expectations of the Bank of England raising its main interest rate this year, analysts said on Tuesday.



Bank of England chief Mark Carney last week played down speculation that its key rate was due to rise from a record-low British level of 0.50 percent following a shock fall in unemployment.



The possibility of a rise in the bank's key rate rose after official data showed that British unemployment fell to 7.1 percent, just above the 7.0 percent threshold that Carney set as a potential trigger for a tightening of monetary policy.



(Agence France-Presse, 28 Tuesday January 2014 The Roman)

España cerró 2013 con más del 26 % de desempleo, pese a salir de la recesión Spain ended 2013 with over 26 % unemployment, even out of the recession

España cerró 2013 con más del 26% de desempleo, pese a salir de la recesión



Madrid (AFP)



El desempleo en España cerró el año 2013 con una nueva subida, hasta el 26,03%, manteniéndose como el principal punto negro de una economía que acaba de volver a la senda del crecimiento pero de una forma aún insuficiente para absorber los efectos de la crisis en el mercado laboral.



España, cuarta economía de la zona euro, sometida desde finales de 2011 a unas políticas de austeridad draconianas para sanear sus finanzas públicas, no ha logrado mantener la tendencia a la baja del desempleo registrado en los dos trimestres anteriores de 2013, pese a que está saliendo de una recesión de dos años con un crecimiento aún demasiado pequeño para crear empleo.



A finales de diciembre había en España 5.896.300 desempleados, o sea 8.400 menos que en el trimestre anterior, pero, al mismo tiempo se redujo la población activa, en parte por la emigración de personas y también por el desánimo que ha llevado a muchos a dejar de buscar trabajo, lo que explicaría el contraste entre bajada del número de parados y subida porcentual del desempleo.



"Efectivamente, hay parte de la población que ante mejores perspectivas de empleo en otros países va buscando mejores perspectivas", afirmó este jueves el secretario de Estado de Economía, Fernando Jiménez, en una rueda de prensa.



Según la Encuesta de Población Activa (EPA) del Instituto Nacional de Estadística (INE), que contabiliza las personas que buscan activamente un empleo, el número de parados bajó en 69.000 personas en 2013, lo que supone que "por primera vez desde segundo trimestre de 2007 se produce un descenso anual del paro".



Sin embargo, en términos porcentuales, el desempleo se mantiene alto en el 26,03%, frente a una tasa del 25,98% que había registrado en el trimestre anterior, una de las más altas de los países industrializados.



"La cifra es esperanzadora", considera José Ramón Pin, profesor de la escuela de negocios IESE, en referencia a los 8.400 parados menos, pero recuerda que "el salario medio español también ha bajado, lo cual significa que los que están ocupados tienen menos dinero, y eso influye mucho en el consumo y dificulta la recuperación".



La crisis social sigue siendo pues profunda en un momento en que el país, doblemente golpeado en 2008 por el estallido de la burbuja inmobiliaria y el comienzo de la crisis financiera internacional, acaba de registrar un pequeño crecimiento saliendo de una recesión de dos años.



Los jóvenes siguen entre los más afectados, con una tasa de desempleo del 55,06% en la franja de edad de entre 16 y 24 años, en alza respecto a los tres meses anteriores, al tiempo que también han aumentado en 24.600 los hogares en que todos sus miembros activos están desempleados, elevando su cifra total hasta 1.832.300 millones.



La región sureña de Andalucía, que sufrió mucho por el estallido de la burbuja inmobiliaria tras basar su crecimiento en la construcción ligada al turismo, mantiene su tasa récord del 36,32% desempleo, mientras que el País Vasco, rica región industrial del norte, registra la tasa más baja con un 15,76%.

El secretario de Estado de Economía, Fernando Jiménez, prefirió poner el foco en la caída del número de desempleados, para afirmar que "esperamos que este cambio de tendencia se mantenga de manera que en la primera mitad del año ya pasemos a registrar tasas de crecimiento del empleo brutos positivas".



"No obstante, la tasa de paro sigue siendo inaceptablemente elevada y es necesario perseverar en las reformas estructurales, perseverar en el proceso de consolidación fiscal", aseguró.



A pesar de ello, el Banco de España publicó este jueves su estimación para 2013, en las que afirma que el país "ha seguido una trayectoria de mejora gradual", a pesar de que el PIB se contrajo un 1,2% entre enero y diciembre.



En el último trimestre, el Banco de España detectó un leve progreso de la demanda interna, en punto muerto debido al desempleo.



Pero, las previsiones de crecimiento siguen siendo bajas y, así, e gobierno espera para 2014 un subida del 0,7% del PIB, aún insuficiente para estimular el empleo.



(Agence France-Presse, 23 jueves enero 2014 la Roman)





Spain ended 2013 with over 26 % unemployment, even out of the recession



Madrid (AFP)



Unemployment in Spain closed the year 2013 with a further rise, to 26.03 %, keeping black as the main point of an economy that has just returned to the growth path but in a way still insufficient to absorb the effects of crisis on the labor market.



Spain, fourth largest economy in the euro zone since the end of 2011 subject to draconian austerity policies to consolidate their public finances, has failed to maintain the downward trend in unemployment in the last two quarters of 2013, although it is emerging from a recession two years with a still too small to create employment growth.



In late December were 5,896,300 unemployed in Spain, that is 8,400 less than the previous quarter, but at the same time the workforce was reduced in part by the migration of people and discouragement that has led many to stop looking for work, which would explain the contrast between lowering the number of unemployed and percentage increase in unemployment.



"Indeed, no part of the population that will seek better prospects to better employment prospects in other countries," Secretary of State for Economy, Fernando Jimenez, said in a press conference Thursday.



According to the Labour Force Survey (LFS) of the National Statistics Institute (INE), which counts people who are actively seeking employment, the number of unemployed people fell by 69,000 in 2013, which means that "for the first time since the second quarter 2007 an annual decline in unemployment" occurs.



However, in percentage terms, unemployment remains high at 26.03 %, compared with a rate of 25.98 % that was registered in the previous quarter, one of the highest in the industrialized world.



"The number is encouraging," notes José Ramón Pin, professor of IESE Business School, referring to the 8,400 fewer unemployed, but remember that "the average Spanish wage has also fallen, which means that those who are busy are less money, and that influences the consumption and difficult recovery."



The social crisis remains as deep at a time when the country doubly hit in 2008 by the bursting of the housing bubble and the onset of the global financial crisis, just registered a small growth coming out of a two-year recession.



Young people are among those most affected, with an unemployment rate of 55.06 % in the age group between 16 and 24 years, rising over the previous three months, while also increased by 24,600 households in that all active members are unemployed, raising their total number to 1,832,300 million.



The southern region of Andalusia, which was hit hard by the bursting of the housing bubble after base its growth in tourism linked to construction, maintained its record unemployment rate of 36.32 %, while the Basque Country, rich industrial north, recorded the lowest rate with 15.76 %.



Secretary of State for Economy, Fernando Jiménez, chose to put the focus on the decline in the number of unemployed, to say that “We hope this trend keeps changing so that in the first half of the year and move on to record growth rates the gross employment positive."



"However, the unemployment rate remains unacceptably high and it is necessary to continue structural reforms, persevere in the process of fiscal consolidation," he said.



However, the Bank of Spain published on Thursday its estimate for 2013, which says that the country "has followed a path of gradual improvement," even though the GDP contracted by 1.2 % between January and December.



In the last quarter, the Bank of Spain found a slight improvement in domestic demand in neutral due to unemployment.



But growth forecasts remain low and thus government hopes for 2014 and a rise of 0.7 % of GDP, still insufficient to stimulate employment.



(Agence France-Presse, 23 Thursday January 2014 The Roman)

(Translated: R.S.F. toshiki speed news press, Agence France-Presse, 24 Friday January 2014 The Roman)

German consumer confidence rises at year-end: survey

German consumer confidence rises at year-end: survey

 

Frankfurt (AFP)

 

Consumer confidence in Germany rose again during the busy Christmas period, auguring well for Europe's top economy as it goes into 2014, a new poll found on Friday.

 

"Consumer sentiment is very good at the end of 2013," market research company GfK said in a statement.

 

"Economic expectations and willingness to spend are continuing to rise. Income expectations have slipped, but are still at very high levels."

 

Overall, GfK's headline household confidence index was forecast to rise to 7.6 points in January from 7.4 points in December.

 

This reading is based on responses from about 2,000 households regarding their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money.

 

Sentiment in Europe's top economy is currently very positive.

 

Earlier this week, the ZEW investor confidence index rose to its highest level in seven and a half years, and the Ifo business climate index hit a 21-month high.

 

Analysts nevertheless questioned whether consumer confidence would translate into higher retail sales.

 

"German consumers are becoming more confident as uncertainty fades. The GfK index is at its highest level since 2007," said Berenberg Bank economist Christian Schulz.

 

"Consumer confidence has been rising strongly since April 2013. However, strong consumer confidence has so far failed to translate into stronger hard consumption data," the expert said.

 

Retail sales had mostly disappointed and the consumption component of gross domestic product had only grown modestly so far in 2013, Schulz said.

 

Nevertheless, "with the economy turning up and the anticipation of a new national minimum wage of 8.50 euros introduced in 2015, we continue to expect German consumers to make a healthy positive contribution to GDP growth in 2014 and beyond," Schulz concluded.

 

(Agence France-Presse, 20 Friday December 2013 The Roman)

 

 

Greece to emerge from crippling six year recession in 2014

Greece to emerge from crippling six year recession in 2014

 

Rise in tourism, investment and exports expected to help Greece haul itself out of recession next year, finance ministry says

 

[caption id="attachment_9269" align="alignnone" width="400"] (The Greek economy, which has shrunk about a quarter since its peak in 2007, will grow by 0.6pc next year thanks to a rebound in investment and exports including tourism, the budget predicted. The economy is set to contract by 4pc this year. (Photo: Reuters))[/caption]

 

(Reuters)

 

Greece will emerge from six years of recession next year, its draft 2014 budget projected on Monday, in one of the strongest signs yet that the country has left the worst of its crippling debt crisis behind.

 

The economy, which has shrunk about a quarter since its peak in 2007, will grow by 0.6pc next year thanks to a rebound in investment and exports including tourism, the budget predicted.

 

The economy is set to contract by 4pc this year.

 

Athens is also targeting a primary budget surplus of 1.6pc of national output next year and is on track to post a small surplus this year.

 

Attaining a primary surplus - excluding debt servicing costs - is key to helping Athens secure debt relief from its international lenders.

 

"In the last three years Greece found itself in a painful recession with an unprecedented level of unemployment," Deputy Finance Minister Christos Staikouras said as he unveiled the 2014 budget.

 

"Since this year the sacrifices have begun to yield fruit, giving the first signs of an exit from the crisis."

 

Excluded from financial markets since 2010, Greece has been kept afloat solely with €240bn (£202bn) in aid from its EU and IMF partners.

 

After nearly crashing out of the euro zone and dragging down the global economy along with it, Athens has returned to more stable financial footing over the past year, though it is still expected to require further debt relief.

 

Athens now hopes it can return to the bond markets in the second half of next year, Mr Staikouras said.

 

The draft budget targets a general government deficit of 2.4pc of gross domestic product next year.

 

Public debt remains at mountainous levels - projected to reach 174.5pc of GDP in 2014.

 

(The Telegraph, 7 Monday October 2013 The Roman)