Institutional Investor (March 10)
“China’s red-hot growth inevitably has to cool given that it has already overbuilt and overborrowed. China’s debt load has exploded four-fold since 2007, largely on the back of shadow banking and a real estate boom.” China’s total debt load (estimated at 282% of GDP by McKinsey) now “tops debt loads in the U.S., Germany, Australia and other developed countries. China’s corporate debt amounts to 125 percent of GDP.”
Tags: Australia, Boom, China, Debt load, GDP, Germany, Growth, McKinsey, Overborrowed, Overbuilt, Real estate, Shadow banking, U.S.
Institutional Investor (January 20)
“Once again, Chinese growth data takes center stage.” The International Monetary Fund cited China’s slowing growth as a major reason for its latest downward forecast revision. The IMF slashed expected global GDP growth from 3.8% to 3.5% during 2015. “With a global economy still attuned to demand from a rising China, the nation’s economy remains the central theme for macro and micro-focused investors alike.”
New York Times (December 6)
“Mexico, Indonesia, Nigeria and Turkey — the so-called MINT economies — along with the more developed South Korea,” could surpass Italy, the world’s eighth largest economy, to each contribute 3-5% of global GDP. The MINTs may even give some of the BRICs a run for their money. Jim O’Neil, who coined the term BRIC to refer to Brazil, Russia, India and China, thought each had potential to produce 5% of global GDP. China’s already there and India will be soon, but it’s becoming apparent that Brazil and Russia will struggle without reforms. While the MINTs “have many challenges, they all have exciting potential, and could become mini-giants, if not quite on the scale of some of their well-known BRIC colleagues.”
Tags: Brazil, BRIC, BRICS, China, GDP, India, Indonesia, Italy, Jim O’Neil, Mexico, MINT, Nigeria, Reforms, Russia, South Korea, Turkey
Washington Post (October 31)
“The U.S. recovery is frustrating—but it’s the envy of the advanced world.” Underemployment remains a problem and few Americans are feeling rich, but with annualized GDP growth reaching 3.5% in the third quarter, the U.S. is outpacing other leading nations.
Tags: Frustrating, GDP, Growth, Recovery, Rich, U.S., Underemployment
The Economist (October 18)
At 250% of GDP, China has a debt problem. Still, this “is unlikely to cause a sudden crisis or blow up the world economy. That is because China, unlike most other countries, controls its banks and has the means to bail them out.” The lack of crisis may drive China down the same road Japan took in the post-bubble decades. “The biggest risk is complacency: that China’s officials do too little to clean up the financial system, weighing down its economy for years with zombie firms and unpayable loans.”
Tags: Banks, China, Complacency, Crisis, Debt problem, Economy, Financial system, GDP, Japan, Loans, Risk, Zombie
Bloomberg (October 15)
Vladimir Putin is losing “his best friend: expensive oil.” Petro revenue makes up 70% of Russia’s export revenue and “oil has been the key to Putin’s grip on power since he took over from Boris Yeltsin in 2000, fueling a booming economy that grew 7 percent on average from 2000 to 2008.” To balance its budget, Russia needs a per barrel price of over $100. “At $90, close to the current level, Russia will have a shortfall of 1.2 percent of gross domestic product.”
Institutional Investor (July 3)
“Japan is not without ambitious women who have been able to get ahead, as well as corporate leaders who are making an effort to promote more women…. But barriers persist.” Kathy Matsui, who coined the term womenomics, recently estimated that “Japan’s GDP could rise by nearly 13 percent if the employment rate of women rose to match that of men.”
Tags: Ambitious, Barriers, Corporate leaders, Employment rate, GDP, Japan, Kathy Matsui, Women, Womenomics
Financial Times (May 29)
Britain’s GDP is set to increase by £10 billion as the Office for National Statistics begins to include illegal drug sales and prostitution in its calculations. To move into alignment with EU standards many countries have already taken this step. Italy is also advancing plans to include “among other activities, the sale of cocaine and prostitution.” Estonia, Austria, Slovenia, Finland, Sweden and Norway have already added prostitution and illegal drugs to their GDP calculations.
Tags: Alignment, Austria, Britain, Calculations, Cocaine, Drug sales, Estonia, EU, Finland, GDP, Italy, Norway, Prostitution, Slovenia, Statistics, Sweden
Investment Week (May 19)
At just 3.6%, Japan’s unemployment rate is extremely low and this should promote inflation. “Labour shortages have already driven wages higher for part-time workers. Adding to this, the demand to provide new infrastructure for the 2020 Olympics in Tokyo and the need to replace equipment should also serve to further stimulate the economy.” The OECD has forecast that “only Japan, New Zealand, and Israel are expected to grow faster than their previously forecasted GDPs in 2014.”
Tags: 2020 Olympics, Economy, Equipment, GDP, Inflation, Infrastructure, Israel, Japan, Labor, New Zealand, OECD, Shortage, Tokyo, Unemployment rate, Wages, Workers
Wall Street Journal (April 23)
On Friday, “the Bureau of Economic Analysis will release a new way to measure the economy each quarter.” Gross output is a supply side figure, nearly twice as large as GDP, and “the first significant macroeconomic tool to come into regular use since gross domestic product was developed in the 1940s.” Gross output is “a better, more comprehensive measure of the nation’s economic activity than GDP, and a better indication of the economy’s growth prospects.”
