European Union
n The eurozone recorded a trade deficit of €5.6bn
(£4.8bn) in September having reported a surplus
of €2.9bn (£2.5bn) a year earlier.
n Inflation across the eurozone fell to 3.2% in october
having hit a record high of 4.1% in July. at the start
of november, the European Central Bank cut rates
from 4.25% to 3.75%.
n The eurozone is officially in recession, for the first time
since the euro was introduced in 1999. Its economy
shrank by 0.2% in Q3 and by 0.2% in Q2. Germany’s
Gdp fell by 0.5% in Q3.
Africa
n A new free-trade zone of 26 countries with a GDP
of $624bn has been created involving three existing
trade areas – the Southern African Development
Community, the East African Community and the
Common Market for Eastern and Southern Africa.
n nigeria has blamed the global finance crisis and changes
in the benchmark price of oil for the delay in presenting
its budget to its national assembly. The budget is
expected to include large-scale infrastructure projects.
n Uganda’s Gdp increased from 7.4% in ’06/’07 to
8.9%, fuelled by large growth in the services sector.
The industrial sector grew by only 6.4% (9.9%),
while mining fell from 19.5% to 0.8%.
globalround-up
Demand for energy set to rise by 45%
The International Energy agency has predicted the global
demand for primary energy will rise by 45% by 2030.
The demand for oil, largely from developing economies,
is expected to grow by nearly 25%, to more than 100
million barrels a day.
Opec to cut output to maintain oil prices
opec wants to maintain oil prices between $70 and $90
a barrel, according to its president, Chakib Khelil. This could
mean further production cuts, having already reduced output
by up to 1.8 million barrels a day since 1 nov.
BRIC
n Consumer price inflation in China dropped by 0.6%
to 4% in October, while the value of retail sales rose
in the year to October by 22%, slightly less than it
had to September.
n China’s trade surplus widened to a record $35.2bn in
october, largely on the back of a slowdown in imports.
n The reserve Bank of India cut its interest rate from 8%
to 7.5% in october, having reduced the rate by 1% only
a fortnight earlier.
n India’s central bank also doubled – to inr220bn (£3bn)
– the amount of funding available for banks to refinance
export credit.
Asia
n In November, Australia’s central bank cut its interest
rate by 0.75% to 5.25% and Vietnam reduced its
base rate from 13% to 12%. But Pakistan’s central
bank raised its rate to 15% in an attempt to reduce
an inflation rate currently standing at 25%.
n pakistan has formally asked the International Monetary
Fund for a $7.6bn loan. In return, the country will have
to reduce government’s fiscal deficit from 7% to less
than 4% of Gdp in the financial year to June 2009.
n hong Kong’s economy is in recession for the first time
in five years. In Q3, its Gdp fell by a seasonally adjusted
0.5%, following a 1.4% drop in Q2.
G20 meeting agrees recession relief
World leaders discussed how to counter the global
recession at the G20 meeting. Key issues agreed included
reform of the World Bank and the IMF, improvements
to financial market transparency and ensuring financial
institutions have incentives to prevent excessive risk taking.
IMF seeks extra funding to aid recovery
dominique strauss-Kahn, head of the IMF, says his
organisation is likely to need at least $100bn of extra
funding during the next six months to help support
a global economic recovery.
DEcEmbER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER
ECONOMIC SUMMARY
13
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