Monday, May 31, 2010

GLOBAL ECONOMY CRISIS

Joint US-China will
United States (U.S.) and China agree to strengthen cooperation ties the two countries and encourage the global economic balance. However, both countries had not yet reached agreement about yuan revaluation. As U.S. was encouraging savings and investment, China is also trying to change the model to encourage the growth of domestic demand and consumption, said Treasury Secretary Timothy F. Geithner.

According to the U.S. Geithner, the State with the largest economy in the world and China is in third place, have the same interest to build a global financial system more stable and not prone to crisis. Innovation is well developed when the market opened, unfair competition, and no protection for ideas.

Geithner did not mention about yuan revaluation. He just said, in the global trade of all countries need to get treatment, risk sharing, and a fair profit.

Economy Still Growing
Thailand's economic conditions before a bloody political crisis and unrest was being nice-nice. The Government of Thailand, dated May 24, 2010, reported that gross domestic product growth (GDP) in quarter one 2010 to the highest level since 1995.

Thailand's first quarter GDP growth of about 12% higher than first quarter 2009 GDP. Previously, economists surveyed by Bloomberg estimate that first quarter GDP in 2010 only about 9% higher than GDP growth in first quarter 2009.

Post-political unrest, economic Thailand has become vulnerable because domestic demand slumped. The crisis will create economic growth in the second quarter eroded, said Lim Su Sian, Economist, Royal Bank of Scotland. Thai Finance Minister Korn Chatikavanij said the demonstration which lasted more than two months of 0.3% -0.5% cut its economic growth. This does not include investor confidence.



Crew of British Airways Strike
Airline cabin crew of British Airways, began running the strike, on May 24, 2010. Strike action due to British Airways officials failed to determine the point about salary, holidays, and working conditions with the management of that airline. In fact, British Airways Chief Executive Willie Walsh and union leaders Tony Woodley recriminations about the failure of these negotiations.

UK airline management is still operating 60% express long-distance flights and 50% short-haul flights from Heathrow Airport, London. Approximately 70% of passengers can be transported to the destination.

Flight of the other two airports in London, Gatwick and City did not affect the strike is expected to last five days. Two strike continued to be made on May 30 and June 5, 2010 if negotiations are not also fruitless. BA was experiencing financial difficulties after recording a net loss in 2009 amounted to euro 531 million or U.S. $ 763 million.

Germany 10 billion euro budget cut
The German government is likely to take steps to cut its deficit budget savings. State budget cut was rumored to be around euro 10 billion or U.S. $ 13 billion per year until the next 2016 years.

Germany made the move to set an example for the member countries of the European Union (EU) is facing another budget deficit pressures. Germany also wanted to show that EU countries should be able to comply with EU budget deficit not higher than 3% of gross domestic product (GDP).

Reuters Financial Times quoting sources in the Government of German Chancellor Angela Merkel, reports, policies, budget reductions will take place from two sides. The first way to raise taxes. Second, Germany would reduce government spending.

Whereas before, the German coalition government has promised to make the issue of tax cuts as their main agenda. The main target of budget cuts is a lower subsidy policy. Include withdrawal of concessions and tax exemptions are already running, according to the Financial Times reported.

Until now, the Germans continued to press the user countries to focus on the euro currency to cut its budget. This State Government believes the budget savings measures is the only way for the EU to be able to return to calm market confidence against the euro. That's also the best way to avoid this area of the financial crisis.

The threat of economic crisis in Europe had brought fear among global investors. They assumed, United States (U.S.), Spain, and Greece are the countries most at risk of failing to pay debts (default). That was revealed by the investment firm Pacific Investment Management Co. (PIM), which manages the world's largest bonds fund.

According to Jhon Wilson, Head of PIM Australian unit, the company is currently selecting investments in emerging markets that offer higher return than the interest savings. Risk is also lower asset bubble and the greater capacity of government spending without a budget cut plan.

Emerging market investments are targeted, among others, Brazil, Mexico and Russia. Wilson said, although there is support from the EU and the IMF, the Greek ability to manage its debt is still very risky. Other countries are also at high risk are Ireland, Spain, France, USA, UK, Italy, Portugal, and Japan.

Singapore inflation Recording Records
The consumer price index (CPI) or Singapore's annual inflation rate during April 2010 increased by 3.2% over the previous year. This became the highest inflation in the last 14 months. This figure is well above the forecast of economists surveyed by Bloomberg, who estimates that April inflation rose by 2.6%.

Lion Country triggers inflation in April 2010 was the economic acceleration that has been recovered from the global crisis. Economic recovery and then trigger an increase in labor demand raise transportation tariffs, property prices, and the food. Without including the cost of accommodation, inflation in Singapore in the month of April 2010 increased by 3.9%.
Singapore Statistical Bureau in its report, dated May 24, 2010 reveals, April inflation was also up 0.9% from the inflation rate in March 2010. Statistics bureau officials said, the biggest contribution of inflation in April 2010 is the increase in transportation costs and property.

The government explained, due to rising prices of gasoline cars and the cost of transportation in the month of April 2010 increased by 3.3%. Then housing prices rose 1.1%, which includes fees for services and hospital care. Accommodation costs and tariffs listrk also increased. While the cost of recreation and other activities increased by 0.8% due to increase in the price package tours.

Meanwhile, inflation during the first four months of the year 2010 or year to date increased 1.5% over the same period in 2009. Domestk price hike that triggered inflation will start to crawl in the second half and the more visible in 2011, said Alvin Liew, Economist, Standard Chartered Plc.

Liew added tightening measures the government to issue Singapore dollar policy has helped reduce inflation from imports. Last month, Singapore's central bank has predicted inflation will rise sharply in coming quarters, driven increase in wages and business costs push up consumer price increases.

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