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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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Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Marubeni Corporation - India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
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