European Union
■ Europe has elected its first president, Herman Van
Rompuy, formerly prime minister of Belgium. Its first
foreign minister is Baroness Catherine Ashton from
the UK.
■ Greece’s current debt stands at 300bn (£271.7bn), its
highest ever. This followed news that Fitch, the ratings
agency, downgraded Greece to BBB+, outlook negative.
■ Ireland – the first eurozone economy to go into recession
– has raised its forecasts for GDP to decline 1.3% next
year after falls of 7.5% this year and hopes to return to
growth in the second half of 2010.
■ Unemployment in the euro area remained unchanged at
9.8% in October, with 15.6 million people out of work.
Asia
■ The rate of unemployment in Australia fell in
November, to 5.7% from 5.8% in October as nearly
31,000 new jobs were created.
■ Australia’s central bank had previously raised interest
rates for the third consecutive month, from 3.5% to 3.75%.
■ Thailand’s economy shrank by 2.8% in the year to Q3,
following a drop of 4.9% in Q2 .
■ The central bank in Vietnam devalued its currency against
the dollar by 5.4%, while at the same time increasing its
interest rate by 1% to 8%.
global globalround-up round-up
Oil prices fall to below $70 a barrel
US crude for January delivery fell 84 cents to $69.81 a
barrel; US consumption of petroleum products fell to its
lowest level for five months, while China’s two biggest oil
companies saw a rise in fuel inventories in November.
Dubai debt crisis
Dubai teetered as the government-owned Dubai World
delayed repaying a $4bn loan due in mid-December.
After a few weeks of doubt, it was bailed out by a $10bn
handout from Abu Dhabi.
BRIC
■ Brazil’s industrial production grew by 2.2% in October
though this figure is still 3.2% lower than the same
time in 2008.
■ Consumer prices in Brazil fell by 0.4% in November
bringing the annual inflation rate to 4.2%.
■ India’s GDP grew by 7.9% in the year to the end of Q3.
Exports were 6.6% lower in October than 12 months
previously while imports were 15% lower.
■ China’s industrial output in November grew to its
strongest position since June 2007, increasing 19.2%
compared to a year ago. Consumer prices also grew
year-on-year for the first time in ten months.
Africa
■ Zimbabwe’s 2010 budget, announced by finance
minister Tendai Biti, includes measures to streamline
and flatten the country’s tax structure although its
foreign debt ($5.4bn) is twice its total spending
($2.25bn).
■ Biti predicts the economy will grow by 7% next year - the
IMF predicts 6% growth – following ten years of dramatic
decline.
■ The output of manufactured goods in South Africa fell by
9.3% in the year to October, its lowest fall in ten months.
Financial aid for climate change
The developing nations are asking for help to tackle climate
change. The UK has pledged £1.5bn, the US is being asked
for $200bn and the IMF could release some of its billions in
emergency funds as loans to smaller countries.
UK to lose its top 10 ranking?
The UK’s continuing economic demise could see it fall out
of the G10 by 2015. Having already been overtaken by
China, Italy and France, it could also sit behind Brazil, India
and Canada, only just ahead of Australia.
ECONOMIC SUMMARY
JANUARY 2010 [www.portfolio-adviser.com] PORTFOLIO ADVISER
15
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