Global Economic Prospects 2015

The global economy is still struggling to gain momentum. Read more ...

Development Prospects

Providing information, analysis, and advice on global trends in the world economy.  Find out more ...

Global Economic Monitor

Now free. Daily and monthly updates on global economic developments and relevant topical issues. Find out more ...

Syndicate content

Add new comment

Global Daily: Greek government and creditors fail to strike deal

Global Macroeconomics Team's picture
Financial Markets

Greece and the “Brussels Group” of representatives from the European Union and the International Monetary Fund failed to reach a deal to unlock more aid as creditors were not convinced the country has a viable economic reform plan. Without a deal with creditors, Greece faces prospect of going bankrupt in the next few weeks. The country tentatively agreed back in February to extend its existing bailout program for four months to July, but a lack of technical details on a reform deal means its creditors still haven’t released Greece’s next funds (around €7 billion) that are due from the bailout.

Italian and Spanish government bonds advanced on Tuesday, extending their 11th-consecutive quarterly gains, as the European Central Bank approached the end of the first month of bond-buying program. The ECB has purchased a total of €41.02 billion bonds through March 27 under its quantitative-easing program. The benchmark 10-year yield on Italy’s securities slid as much as 7 basis points (bps) to 1.24%, the lowest level since March 23, the yield on comparable Spanish bonds fell 6 bps to 1.21%. Germany’s 10-year yield, the region’s benchmark, fell 2 bps to 0.19%, approaching the record low of 0.17% reached March 20.

High Income Economies

The Conference Board consumer confidence index for the U.S. unexpectedly rose to 101.3 in March from an upwardly revised 98.8 in February, with the increase driven by an improved short-term outlook for both employment and income prospects.  The increase came as a surprise to economists, who had expected the index to edge down to 95.5 from the 96.4 originally reported for February.

Developing Economies

Europe and Central Asia

Romania's central bank on Tuesday cut its key interest rate for the sixth session in a row to a new low as it expects inflation to embark on a slight uptrend from the current low levels.  The central bank reduced the monetary policy rate to 2.0% from 2.25%, in line with economists' expectations.  In February, the bank cut the rate by 25 basis points.

Turkey’s economy grew 2.6% (y/y) in Q4 2014 following a 1.9% increase in Q3.  Economists had expected 2.1% growth.  Full year growth for 2014 was 2.9%, which was sharply lower than the 4.2% expansion in 2013.  Household consumption grew 1.3% and government expenditure increased 4.6%.  Investments declined 1.3% in 2014, exports grew 6.8%, while imports fell 0.2%.

Sub-Saharan Africa

Raising to a five-month high, Kenyan annual inflation rate rose to 6.3% (y/y) in March, from 5.6% in February mainly due to increase in food cost.  Compared to March 2014, food prices increased 11.0%, the strongest growth since October 2013.  Substantial increases in the prices of clothing and footwear, furnishings and household equipment, miscellaneous goods and services, and hotels, cafés and restaurants also contributed to the increase.