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

Prospects Daily: German retail sales fall in December, GDP growth slows in Russia and Taiwan in 2012, but accelerates in the Philippines

Global Macroeconomics Team's picture

Financial Markets…European stocks (Stoxx 600 index) slid 0.3% for a straight second day loss and the euro weakened 0.2% against the dollar to $1.35 from yesterday’s 14-month high, after reports of weak German retail sales and a large quarterly loss at the country’s biggest lender Deutsche bank. Nevertheless, European shares have gained 2.9% in January, their eighth consecutive monthly gain.

U.S. Standard & Poor’s 500 Index dropped 0.2% in early morning trade, after the gauge posted the best start to a year since 1989, as disappointing corporate earnings reports and more-than-expected increase in unemployment claims overshadowed the sharp rise in December personal income.

Peru’s central bank increased its dollar reserve requirements by 1% effective February, raising it for a second consecutive month in an effort to curb currency appreciation. The latest increase is the sharpest of six increases in the reserve ratio since May. Local companies seeking international bond financing, strong demand for the government’s securities, and record foreign direct investments have fueled inflows into the country, prompting the Peruvian government to intervene in the foreign-exchange market.

High-income EconomiesGerman retail sales fell 1.7% in December from November, when they rose 0.6%. Sales were 4.7% lower than a year earlier, the largest year-on-year decline since May 2009, suggesting that consumer spending remains weak amid uncertainty about the economic outlook (earlier data showed the German economy contracted 0.5% q/q in Q4 2012), despite a relatively resilient labor market.

consumer price inflation eased to 1.7% (y/y) in January from 2.1% in December (-0.5% m/m), on weak domestic demand, retailers cutting prices after Christmas, and a strengthening of the euro.

US initial unemployment claims rose by 38,000 to 368,000 in the week ended January 26. The four-week moving average of claims, a less volatile measure of trends, edged up by 250 to 352,000, suggesting that job losses remained broadly steady at close to a four-year low. The number of people who continue to collect unemployment benefits (continuing claims) climbed by 22,000 to 3.2 million in the week ended January 19.

US personal income jumped 2.6% (m/m) in December, the largest monthly increase in eight years, following a 1% increase in November, because of special dividends and accelerated bonuses to compensate for increases in taxes this year, according to the Commerce Department.

consumer spending was flat in December from November (-0.1% y/y). Spending on manufactured products rose 0.3% (m/m) supported by a rise in the purchase of automobiles ahead of new fees on high-polluting cars in early 2013, but spending on household furnishing, clothing and energy all declined.

Taiwan’s GDP growth slowed to 1.25% in 2012 from 4.1% in 2011. Quarterly GDP growth for the fourth quarter, however, accelerated to 3.4% (y/y) from 1% in Q3, helped by an uptick in exports led by electronics products.

Developing Economies
Albania's central bank cut its benchmark refinancing rate by 25 basis points to a historic low of 3.75%. Albania’s average inflation in 2012 was 2% (y/y) – lower than the central bank’s 3% (+/- 1 percentage points) target. 

Bangladesh cut its benchmark repurchase rate to 7.25% from 7.75% to stimulate the domestic economy.  Bangladesh's inflation rate was 7.7% (y/y) in December and averaged 8.8% (y/y) in 2012 as a whole, lower than 10.3% in 2011 but still above Bangladesh’s 7.5% medium-term inflation goal.

central bank kept its benchmark Overnight Policy Rate (OPR) steady at 3.0%, stating that its policy stance remains supportive of growth while inflation is contained. Malaysia's inflation rate declined to 1.2% (y/y) in December reaching the slowest pace since February 2010. In 2012 as a whole, inflation averaged 1.6%, below the 3.2% level in 2011.

The Philippines’
economic growth slowed to a 6.1% annualized pace in the fourth quarter from 7% in the third quarter. Annual GDP growth accelerated to 6.6% (y/y) in 2012 from 3.9 % in 2011 on strong domestic demand and reviving foreign trade.

GDP growth slowed to 3.4% (y/y) in 2012 from 4.3% in 2011. Agricultural output contracted 3.8% (y/y) after a 16.9% surge in 2011, while growth in natural resources production slowed to 0.9% from 2.9% in 2011.

South Africa’s
trade deficit for 2012 as a whole widened to R117.7bn from R16.9bn in 2011 on slow external demand and domestic problems in the mining sector. On a sequential basis, the trade deficit narrowed in December to R2.7bn compared with an earlier R7.9bn owing to lower machinery imports.

Add new comment