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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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Showing 111 to 115 news of total 6871 |
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- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Parliament of New Zealand
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
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