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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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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- The University of Queensland
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- London Commodity Brokers - England
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