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Wednesday, 01 October 14
FITCH: GLOBAL ECONOMY FACES MULTI-SPEED RECOVERY, MULTIPLE RISKS
 Fitch Ratings says in its latest Global Economic Outlook (GEO) that global growth will pick up in 2015 and 2016, but risks are weighted to the downside. The contribution of major advanced economies (MAEs) to global expansion will gradually increase, while growth will remain subdued in emerging markets (EMs) after the cyclical trough this year. Fitch’s latest forecasts for world GDP growth (weighted at market exchange rates) are 2.6% in 2014, accelerating to 3% in 2015 and 3.1% 2016.
The 2014 and 2015 forecasts are both 0.1pp lower than in the June GEO. The downward revisions, similar to previous quarters, are mainly due to emerging markets. For the US economy Fitch maintains its forecast of robust GDP growth of 3.1% in 2015 and 3% in 2016, up from 2.2% in 2014. The economy rebounded strongly in 2Q14 after a temporary setback in 1Q14. Private consumption growth is underpinned by improving household income, wealth and confidence.
Investment should be supported by high corporate cash piles and profitability, low financing costs, rising confidence and capacity utilisation. Monetary policy remains highly accommodative and the drag from fiscal consolidation is significantly smaller than it was in 2013. We forecast eurozone GDP growth of 0.9% in 2014, followed by 1.3% in 2015 and 1.5% in 2016, slightly weaker than in the June GEO. Output stagnated in 2Q14 following four quarters of insipid growth, due primarily to a sharp slowdown in Germany.
Over the forecast horizon growth will be supported by the US and UK recoveries, euro depreciation, ECB policy loosening and an easing in the pace of fiscal consolidation. However, faltering recent outturns suggest deleveraging and structural constraints remain formidable headwinds, eroding potential benefits from improving external conditions or policy stimulus. High unemployment will persist and remain above 11% until 2016. Fitch’s base case is for eurozone inflation to be low at 0.5% in 2014, 1% in 2015 and 1.3% in 2016, but for protracted deflation to be avoided. However, current low inflation, weak demand, a decline in market inflation expectations, policy challenges and the potential for self-reinforcing dynamics make deflation a meaningful and rising risk.
We forecast EM growth to slow sharply from 4.7% in 2013 to 4% in 2014, before recovering somewhat in 2015-16. Looming US monetary policy tightening, geo-political tensions and lower commodity prices pose downside risks. Brazil is now in recession and Russia close to it. Fitch expects both to see only a subdued recovery in 2015 and 2016, underperforming most MAEs over the forecast period.
Fitch expects China’s GDP growth to moderate to 7.2% in 2014, 6.8% in 2015 and 6.5% in 2016 as it gradually rebalances while seeking to contain leverage. India will be the only BRIC country where growth picks up in 2014 to 5.6% and accelerates further to 6.5% in 2015 and 2016, owing to an expected improvement in the business environment.
The underlying momentum of the Japanese economy is uncertain after sharper-than-expected contraction in 2Q14. We have revised down GDP growth to 1.4% in 2014, from 1.6% previously, and are maintaining our forecast of 1.3% for 2015 and 2016. Higher wage growth is central to Japan’s prospects of achieving sustainably higher real and nominal GDP growth. Growth in the UK has been strong and broad-based. Fitch is maintaining its forecast that growth will slow from 3% in 2014 to 2.5% in 2015 and 2.3% in 2016, as it moves to its medium-term potential rate of 2%-2.25%.
The base case is that nominal wage growth will pick up as the labour market slack is absorbed and the currently weak productivity growth will improve, in line with previous cyclical recoveries. The coming quarters will see increasing divergence of monetary conditions in MAEs after six years of synchronised, ultra-loose monetary stance.
Fitch expects the Fed and Bank of England to start gradually tightening policy over the next few quarters. Meanwhile, the ECB announced further easing measures at its September meeting and the Bank of Japan is continuing with its qualitative and quantitative easing strategy. The ECB and Bank of Japan are likely to keep interest rates unchanged until at least 2016. This GEO edition’s alternative scenario explores the global impact of a US interest rate shock. In this scenario the Federal Funds rate increases to 5% and the ten-year US yield reaches 6% by end-2016, triggered by an initial inflation shock as the economy runs out of spare capacity much sooner than policy makers and the markets currently expect.
Furthermore volatility spikes in global financial markets and leads to a 150 bps increase in global risk premium. Growth slows sharply in the US from mid-2015 and the economy stagnates in 2016. According to the simulation results the impact on MAEs is limited and stems mainly from lower US demand. Nevertheless the shock raises the risk of a new recession in the eurozone as the baseline recovery is so weak. In many EMs, central banks tighten monetary conditions due to the higher risk premium and inflation, despite the economic slowdown. Russia and Brazil would remain close to recession in 2015 and 2016, while India would slow sharply and China would be the least affected among the BRICs.
Source: Fitch Ratings
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Planning Commission, India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
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