European Union
� The economic downturn in the 17-country eurozone
slowed slightly in December with the Markit PMI
rising to 47.9.
� Europe agreed to back a new set of fiscal rules to
be drawn up in a revised EU Treaty with only one
abstention, the UK.
� Following on from severe austerity measures, the
Republic of Ireland’s economy shrank by 2% in Q3
compared with growth of 1.4% in Q2.
� Rating agencies have again been busy, with Standard
& Poor’s downgrading ten Spanish banks, while Fitch
has revised its outlook for France to negative.
Africa
� The governor of the region’s central bank is looking
at 6.4% growth in the eight-member West African
Economic and Monetary Union in 2012, up from
1% last year.
� South Africa, the continent’s largest economy, is
predicted to grow by between 3% and 3.2% in 2011
and 2012 respectively, before a rise of 4.1% in 2013.
� The projection for neighbour Zimbabwe’s GDP in 2012
by its finance minister is for growth of 9.4% and a yearend
rise of 9.3% in 2011.
global globalround-up round-up
Lagarde raises spectre of depression
Christine Lagarde, head of the IMF, has described the
world economic outlook as “gloomy” with no country
immune from greater risks, including global depression,
in the future.
IMF rethinks global growth forecast
Having downgraded its global growth forecast in
September to 4% for 2011 and 2012, the IMF expects to
further cut its forecast in January following a “marked
slowdown in economic activity”.
BRIC
� Brazil’s economic growth was flat in Q3 compared to
Q2; its government is now forecasting 3.5% growth in
2011 this year against 7.5% in 2010.
� Russia has joined the World Trade Organisation,
having first applied in 1993 with Russia’s economic
development minister Elvira Nabiullina signing a range
of trade agreements on 16 Dec.
� India’s central bank has been forced to sell dollars in
an attempt to shore up the rupee after the currency
went into freefall. Inflation remains above 9%.
� China’s leaders say they will continue to follow
a “prudent” monetary policy to ensure growth
within an “extremely grim” global outlook in 2012.
Asia
� Asian GDP is expected to slow from 7.5% in 2011 to
6.6% this year growth will be in two stages with a
rise of 6% in H1 and 7.6% in H2.
� The Asian Development Bank has cut its forecast for
economies in East Asia with 14 countries to grow
by 7% in 2012, down from a forecast of 7.5% in
September 2011.
� Fitch Ratings has reinstated Indonesia’s long-term
debt to BBB- from BB+, the first time it has been
investment grade since December 1997.
Fannie Mae and Freddie Mac civil suit
The US Securities and Exchange Commission has brought
civil fraud charges against former senior managers of
Fannie Mae and Freddie Mac over misleading investors
about their risk to sub-prime mortgages.
Gold down while dollar strengthens
Gold has fallen by nearly 9% in three months to $1,560
(£1,004) a troy ounce, its lowest level since September;
meanwhile the dollar has risen to its highest level since
January against a basket of six other currencies.
ECONOMIC SUMMARY
JANUARY 2012 [www.portfolio-adviser.com] PORTFOLIO ADVISER
11
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