European Union
■ The head of the eurozone has forecast growth
of around 1% for the 16-nation region in 2010,
compared with last year’s 4% fall.
■ Greece is planing to reduce its public deficit from 12.7%,
considerably above the 3% the euro rules allow, to 8.7%
in 2010, largely through cuts in public spending.
■ Spain remains the last major economy still in recession,
with its economy falling by 0.1% in Q4 2009 and by
3.1% compared with Q4 2008.
■ Germany’s business leaders have agreed a 2.7% pay
rise with engineering workers that is likely to set a
benchmark for the private sector. Its public sector is
striking for a 5% pay hike.
Asia
■ GDP rose by 2% in 2009 with growth set to rise at
an above average 3.25% to 3.5% over the next two
years. Unemployment hit an 11-month low of 5.3%.
■ The UN has estimated that the world economic crisis
pushed 17 million people in the region into extreme
poverty last year with a further four million this year.
■ Singapore is likely to announce a third consecutive
budget deficit – of up to 3% of GDP – following its GDP
shrinking by an annualised 5.2% in Q4 2009.
■ Consumer confidence in New Zealand fell in February
after hitting a three-year high in January, as it reacted to
coming out of its deepest recession in 30 years.
global globalround-up round-up
Soros puts his faith in SPDR Gold Trust
George Soros has doubled his investment in SPDR Gold
Trust and now owns $663m (£421m) of shares. At the
World Economic Forum in January, he described gold as
“the ultimate asset bubble”.
Oil price surges on currency fluctuations
In mid-February, the price of oil rose at its fastest daily
rate for four months, with US light crude rising by $3.06
to $77.19. London Brent rose to $75.68 a barrel. This is
partly due to the dollar falling against the euro and sterling.
BRIC
■ The Brazilian government’s Annual Borrowing Plan
suggests that its public debt could grow by 16%.
The country’s central bank has kept interest rates at
8.75%, though this is expected to reach double digits
this year.
■ Russia’s economy in 2009 was the worst of the BRIC
countries, falling by at least 8%, compared with Brazil’s
5.5% decline. China’s and India’s GDPs grew by 8.3%
and 6.5%, respectively.
■ China is expected to overtake Japan as the world’s
second-biggest economy, expanding by 8.7% in 2009.
Africa
■ South African finance minister Pravin Gordhan has
forecast economic growth of 2.3% in 2010 with
a 0.5% contribution from the football World Cup.
Unemployment remains at 25%.
■ The EU has renewed its sanctions against Zimbabwe for
another 12 months – citing the Unity government’s lack
of progress – specifically against 200 individuals and 40
firms.
■ By contrast, the EU is to lend €240m (£209m) to three
Nigerian banks to finance infrastructure projects given
the country’s positive reforms of the troubled banking
sector.
IMF calls for economic policy reforms
The IMF is calling for reforms to economic policy including
the possibility of raising inflation targets from about 2%
to 4% and lump-sum payments for poorer families if
unemployment rises above certain thresholds.
Aid to developing countries
According to the OECD, aid to developing countries from
developed nations agreed at the Gleneagles summit in
2005 is likely to miss its target. The total is expected to be
$107bn (£68bn) this year against pledges of £81.3m.
ECONOMIC SUMMARY
MARCH 2010 [www.portfolio-adviser.com] PORTFOLIO ADVISER
15
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