Important developments today:
1. Germany’s trade surplus rises in November
Germany’s trade surplus rises in November. Supported by robust growth in its exports, Germany, the Eurozone’s largest economy recorded an increase in its trade surplus to a seasonally adjusted €15 billion in November from €12.5 billion in October, not withstanding the slowdown in the Eurozone – where over 50% of its exports go. On a seasonally adjusted basis, exports rose by 2.5% (m/m) in November, while imports declined by 0.4% (m/m). The Munich-based Ifo institute’s business climate index for Germany increased for a second month running in December, suggesting that German firms continue to show resilience amid the ongoing slowdown elsewhere in the Eurozone. Further, the latest purchasing manager’s index for Germany, also points to continued output expansion, albeit at a slower than average pace.
Among Emerging Markets
In Central and Eastern Europe, Ukraine’s inflation posted a 0.2% increase in December from the previous month, causing annual inflation to drop to 4.6%, the lowest rate of inflation recorded in nine years. Inflation averaged 8% in 2011, and is expected to drop sharply in the coming months.
Turkish industrial production slipped 8.6% (m/m) in November, indicating that the fast paced growth in the economy may be starting to feel the effects of a global slowdown. Due to base effects however, industrial output in November was still 8.4% higher than seen a year earlier, and up from the 7.3% (y/y) pace recorded in October.
In South Asia, the central bank of Bangladesh hiked the key interest rate by 50 basis points at the latest policy meeting in a further effort to control stubbornly high inflation. The bank has raised interest rates 5 times since March 2011, bringing it to 7.75% with the latest move. Inflation has eased marginally, to 10.6% in December from 11.5% in the previous month, but is likely to continue to remain in double digits as the effects of a government increase in oil prices takes effect.