Economic World

Banking crisis over, Iceland's economy

2012-06-14T10:43:00.005-07:00

In this small Icelandic village, sailors are making double their pre-crisis pay, haddock sales to places like Boston and Brussels are booming and unemployment is almost zero - signs of this island's surprisingly rapid rise from the ashes of banking ruin.
While much of Europe wallows in recession, the economy of this volcanic island in the mid Atlantic is growing at a clip that has surprised many people, thanks to a currency fall - in which the crown lost almost half its value to the euro - an export and tourism boom as well as growing consumer confidence.
"This is probably one of our best years," said Arnthor Einarsson, a fisherman readying his boat for his next catch as seagulls circle huge piles of fishing nets on a rocky peninsula about one hour south of the capital Reykjavik.
Only a few years ago, a banking boom in which the sector's assets grew to 10 times the country's GDP lured many of Iceland's 320,000 population from traditional industries into the world of finance. Fisherman got into banking and sailors speculated on booming real estate.
Those heady days have gone. Gas-guzzling Land Rovers have been replaced with fuel-efficient Volkswagens, a sign perhaps of a more sober consumer mood in which economic growth is based on a steady expansion of exports rather than flash-in-the-pan speculation.
The wounds that sparked massive street protests against the financial elite are slowly healing. Even the then prime minister has been tried by a special court, closing one chapter.
Granted, there is still a long way to go, but many see Iceland as offering a lesson particularly to European countries such as Greece and Spain, stuck with shrinking economies and lacking the option of devaluing to boost their international competitiveness.

Iceland's GDP growth estimated at some 2.6 percent this year will outshine even powerhouses like Sweden.
"These are among the highest numbers in Europe," said Finance Minister Steingrimur Sigfusson. "Sometimes it is easier to turn a small boat around than a big ship."
Currency depreciation though is only part of the picture.
Capital controls, progressive taxes and a careful phasing-in of austerity measures were also key to getting the country back on track, bringing a more than 10 percent fiscal deficit back to a near balance.
Iceland also did what other parts of Europe haven't dared to do - let its banks go under. It took some of the cost itself but forced foreign creditors to take the biggest hit.
Lauded by some economists for taking unorthodox measures to fix its broken economy, others see it as a one-off example that would be hard to replicate.
"The lessons don't transfer directly because of the relative size of the old banks in relation to the economy. What we were left with was quite manageable," said Jon Bentsson, senior economist at Islandsbanki.

Back to basics
Three years after its near meltdown, Iceland looks healthy on many measures. It successfully finished an IMF bailout program and has already made one early repayment. It expects the sale of assets from failed bank Landsbanki to cover its $5 billion in debts to Britain and the Netherlands.
In February, Iceland recovered its investment-grade rating from Fitch, which praised the country for restoring macroeconomic stability, adding to investment-grade ratings from Standard and Poor's and Moody's Investors Service.
Icelanders are getting work, going shopping and their house prices are rising again.
And while the penthouse of a gleaming new skyscraper in downtown Reykjavik sits empty, Icelanders are piling into a hip new restaurant on the ground floor called the Hamburger Factory.
Car sales doubled in the first quarter. Jon Olafsson, who runs an auto dealership on the outskirts of Reykjavik, expects to sell almost 1,000 cars this year, having sold less than 100 cars in 2009.

"This is a high volume day for us," he says, pointing at a shiny row of cars just rolled out on his lot. His customers are back en masse, hunting for leaner, greener cars, and he is recruiting staff to meet demand.
While signs point to recovery, many remain cautious about the future and bitter over the past.
Household debt exceeds 200 percent of GDP. The government must deal with the issue of capital controls, imposed after the crisis but which are seen by some economists as denting foreign investment confidence.
There is little trust in government three years after the fall of ex-Prime Minister Geir Haarde. Parliament has the support of only 10 percent of the public, polls show.
Pall Matthiasson, chief executive of mental health services at the National University Hospital of Iceland, flips through slides on his iPad showing the five stages of grief.
He says Icelanders remain in a state of depression.
"There is cohesive guilt, because only so much anger can be directed at the bankers," he said. "It's like looking in the mirror and asking 'did I do that'? It comes back to haunt us."
Close the trenches
Many just want a clean slate.
That can be seen no more clearly than in recent polls which show a surprisingly strong lead for presidential candidate Thora Arnorsdottir, a fresh-faced mother who is due to give birth to her third child at the end of May.
In an election due at the end of June, the 37-year-old goes up against President Olafur Grimsson, who is running for a fifth four-year term having a few years back cheered on those who drove the country's banking expansion.
Haarde's trial, she says, was difficult for the nation.
"Instead of being a step towards reconciliation, it has been more an opening up of wounds," she told Reuters, curled up on a sofa in her suburban home and peeking out of her window every few minutes to check on her children.

People told her they couldn't bear to watch the news anymore.
"I feel that we can get through this without taking out the daggers," said Arnorsdottir, a journalist who also has her own quiz show. "My hope is to use the influence of the presidency to close the trenches."
Haarde, the world's only political leader to be tried for crimes related to the global crisis, was found innocent of major charges of gross negligence but guilty of failing to hold dedicated cabinet meetings ahead of the collapse.
In the months ahead, Iceland will bring former banking executives to stand trial, so the pain is not over.
Icelanders will meanwhile get on with their recovery.
"Did Icelanders have an identity crisis? Yes," said Egill Helgason, one of Iceland's best-known television commentators. "They thought they were financial wizards, but it was all an illusion ... Now it's back to books, music, and well, fish."

Icelandic Economy Bounces Back From Brink

2012-06-14T10:33:00.000-07:00

Iceland’s economy suffered a meltdown in 2008, with its banks defaulting on $85 billion. In 2009 its citizens took to the streets and demanded action from the government against those they saw as responsible for the crisis. The government responded, putting people before markets, and now Iceland’s economy is outgrowing the euro one and, on average, the developed world.

Bloomberg reported that after it was determined in October 2008 that the banks could not be saved, the government intervened. It ring-fenced domestic accounts and shut out international creditors. Iceland’s central bank prevented the sell off of krona through capital controls, and new banks were created that were controlled by the state. Then the government and the state-controlled banks agreed that amounts in excess of 110% of home values would be forgiven on mortgages.

The country’s supreme court also ruled in 2010 that debts indexed to foreign currencies were illegal, which saved households from having to cover losses resulting from drops in the value of the krona.

An Icelandic Financial Services Association report cited by Bloomberg pointed out that the country’s banks have forgiven loans amounting to 13% of Iceland’s GDP. That lessened the debt load of the population.

In addition, the government is investigating, and prosecuting, numerous prominent figures from the meltdown. Currently more than 200 face criminal charges and a special prosecutor has said as many as 90 may be indicted.

Lars Christensen, chief emerging markets economist at Danske Bank in Copenhagen, was quoted saying, “You could safely say that Iceland holds the world record in household debt relief. Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

The result? According to the Organization for Economic Cooperation and Development, Iceland’s economy is in line to expand 2.4% both this year and next, after growth of 2.9% last year and in the wake of shrinkage of 6.7% in 2009. In contrast, the OECD estimated in November that the euro area will only expand by 0.2% and the OECD area by 1.6% in 2012.

Not only that, but the cost to insure against an Icelandic default is about the same as to insure against a credit event in Belgium. And Icelanders are no longer eager to join the eurozone. Most would rather stay solo. Housing as an element of the consumer price index is only down about 3% from what it was in September 2008, just prior to the collapse.

Fitch Ratings just last week also conceded that Iceland’s approach has worked, raising the country’s rating to investment grade with a stable outlook. At the time it said that Iceland’s “unorthodox crisis policy response has succeeded.”

Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, was quoted saying, “The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110% agreement was here. It’s the broadest agreement that’s been undertaken.”

According to Christensen at Danske Bank, “the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks.”

Central African Republic Economy

2012-06-14T02:47:00.000-07:00

The Central African Republic’s economic freedom score is 50.3, making its economy the 145th freest in the 2012 Index. Its overall score is 1.0 point higher than last year, primarily because of improvements in monetary and investment freedoms. The CAR is ranked 31st out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the regional average.

The Central African Republic has pulled itself out of the “repressed economy” category. However, the country performs poorly in many of the four pillars of economic freedom and needs to build stronger momentum for reform. In particular, the foundations of economic freedom remain fragile because of pervasive corruption and a deficient judicial system, which undermine equity and erode the effectiveness of government.

Despite overall progress this year, regulatory efficiency continues to be poor and unfavorable to the development of a more dynamic climate for entrepreneurial activity. The informal economy provides a large number of jobs for relatively unskilled labor. Existing policies aimed at promoting and sustaining open markets have been undercut considerably by a lack of determined implementation.

BACKGROUND
A December 2008 agreement between General François Bozizé (who overthrew the civilian government in 2003), opposition leaders, and some rebel groups established a consensus government. Elections scheduled for April 2010 were postponed, and Bozizé and parliament remained in office beyond the expiration of their terms. These elections were completed in March 2011. Bozizé was re-elected to a second term, and his party won 61 out of the 100 available legislative seats. Rebel groups remain active, and unrest in Sudan and the Democratic Republic of Congo continues to affect the CAR’s security. Despite abundant timber, diamonds, gold, and uranium, the CAR is one of the world’s least-developed countries. The majority of the population is engaged in subsistence farming. China is preparing to explore for oil.

RULE OF LAW

Protection of property rights is weak. Most of the country’s territory is not under central government control, and there is a high risk of renewed violence in rebel-controlled areas. The judiciary is subject to executive interference. Because of inefficient administration, the courts barely function. Misappropriation of public funds and corruption are widespread.

LIMITED GOVERNMENT

The top income tax rate is 50 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax (VAT), with the overall tax burden amounting to 8.7 percent of total domestic income. Government spending is equivalent to 15.4 percent of total domestic output. The budget balance has been in deficit in recent years, and public debt stands at 41.9 percent of GDP.

REGULATORY EFFICIENCY

Establishing a business has become less time-consuming, but other regulatory requirements remain burdensome and opaque, increasing the cost of conducting business. The minimum capital required to start a business is over four times average annual income. The underdeveloped labor market continues to hinder employment growth. The government influences most prices through the public sector, subsidies, and price controls.

OPEN MARKETS

The trade weighted tariff rate is 13.6 percent. Myriad non-tariff barriers add to the cost of trade. Foreign and domestic investors are treated equally, and all sectors of the economy, including real estate, are open to foreign investment, typically without screening. The financial system is underdeveloped, and access to financing for businesses remains very limited. Less than 1 percent of the population has access to banking services.

Bermuda Economy and Industries

2012-06-13T05:33:00.001-07:00

People in Bermuda get one of the highest pay scales in the world. Yes that's true. Bermuda economy still enjoys one of the highest per capita earning in the world.

In 2009, the average annual salary of a serviceman in Bermuda was over $56,000. And many earn much much more than that. So happy to know this? Thinking of a job in Bermuda?

Now hear this out. Bermudians have world's one of the highest cost of living. Yes, they have to spend a lot to survive.
That's because virtually everything in Bermuda is imported. Bermuda has no natural resources like oil, gas, gold or anything. Due to lack of adequate farming land, agriculture in Bermuda is also very limited. Almost 80% of the food has to be imported. And there is heavy import duty levied on all goods that are imported. So prices are often quite scary.

In spite of that, Bermudians earn enough to have a healthier life style compared to people in many other countries.

Living Standards in Bermuda
Although there is no sales or income tax in Bermuda, the cost of goods including food is pretty high. It forces Bermudians to earn a minimum pay which is far higher than anywhere in the world. Although there is hardly any poverty in Bermuda, the low income line is around $27,000 per year. If one is below this earning line, one is said to be poor in Bermuda and will struggle to survive without an aid. Check out cost of living to know what it takes to be living in Bermuda.

In 2007, only 11% of the Bermudians were below the low income line. This band mainly consist of single parents with no full time job, senior citizens or the disabled persons. By the way, Bermuda unlike other countries in the world, makes no concession for the disabled or the senior citizens, and life is quite hard for them. UPDATE June 2011: Senior Citizens to get a three per cent pension increase from August 2011.

Many of the Bermudians hold more than one jobs in the island to maintain their living standards and to pay off their home loans. See Life in Bermuda to know what one of my friends in Bermuda had to say on her own life. She by the way runs a well known boating tours in Bermuda along with her husband.

Real estate in Bermuda
If you hear the average price of a house in Bermuda, you will think that they are only meant for the millionaires. While that's largely true, many average Bermudians still make it by slogging out their initial life with more than one jobs. An average house costs close to a million dollar in Bermuda.

While there is no sales or income tax in Bermuda, there does exist a fairly heavy property or real estate tax. So if you look at an average Bermudian life style, a couple would typically take up two jobs each. They will save every penny they can to buy a land over a period of few years. Once they have the land, they will get good loans by mortgaging their land property and start building their own house while still living in a rented apartment.

Finally when the house is built, they will rent that out so that the loan liabilities can be paid off from the rentals itself. In about 15 years or so, they will clear out all their loans and shift into their own proud home. Looks simple? No, it's a lot of hard work!!

Bermuda Industries

So what are the main industries in Bermuda? The two top industries that continue to control economy of Bermuda are the International Business and the Tourism Industry.

While the international business in Bermuda has been on the rise with over 15,000 international companies having set up their operations in Bermuda, the tourism industry has been going through some rough patches over the last few years. Tourism had always remained the second most important industry in Bermuda. Between International business and Tourism, Bermuda receives over 70% of its total foreign currency earnings.

The international business is mainly around insurance, re-insurance (i.e. insuring another insurance company), captive insurance, and fund and trust management. Bermuda runs the third largest re-insurance in the world and second largest captive insurance domicile. To know more about the this sector, checkout Bermuda's Insurance Industry.

This sector has spent an estimated $2 billion in Bermuda and provided large number of jobs. International business contributes 24% of the total GDP of Bermuda as per 2009 reports.

Over the years, prudent financial management of Bermuda has made it a global magnet for the international business. An independent body called the Bermuda Monitory Authority (BMA) has gained control of all the supervisory and regulatory rights from the Bermuda Government. BMA oversees the international business with complete transparency, coordinates with US and international community, and ensures that there is no money laundering, fraud or other financial crimes.

A recent report from KPMG has stated that the island's legislative framework is almost fully compliant with international standards. Bermuda has recently received a Sovereign rating of AA+ from Fitch which a global credit rating agency. Check out Bermuda Sovereign Ratings for details.

Coming to Tourism in Bermuda, it has shown some declining trends, mostly compounded by the global recession. A little over 550,000 tourists arrived in 2009, a decline of over 100,000 people compared to 2007. Hotel occupancy rates have also decreased in 2009 to close to 51%, down from 59% in 2008. See Bermuda Hotel Occupancy Rate in 2009/2010 for more updates.

Visitors contributed an estimated $330 million to the economy of Bermuda in 2009, down from $402 million in 2008.

Jobs in Bermuda
Bermuda had always followed the trend of US economy as well as the global economy.

For example, in early 1990s due to economic downturn, about 2000 people lost their jobs in Bermuda because many work permits were not renewed. There was a similar impact in 2001-02 as well, although to a far lesser degree.

Although International Business used to be the top employment provider in Bermuda, it's no longer so.
Estimated jobs in 2009 in International Business has been about 4,400, down from about 4,750 in 2008. Whereas wholesale, retail and repair services provided about 4,750 jobs and Hotels & Restaurants about 4,700 jobs in 2009. Bermuda Government is the largest employer in the island. As per 2009 estimates, average job salary in Bermuda was $56,000 per year and an annual pay of less than $27,000 means that one is below the poverty line.

2012 Update on Bermuda Jobs: Department of Statistics in Bermuda released the Labor Market Index (LMI) report. As per the report, in 2011 there were a total of 37,399 job holders compared to 40,213 in 2008. The average annual gross earning in 2011 is $59,364 which shows an increasing trend over the previous years.

2011 Update on Bermuda Jobs: The economy has been harsh on the People of Bermuda. A study showed that around 3,000 jobs have been lost between 2009 and January 2011. The most affected sectors are telecommunications, construction, international business and retail. The age bracket between 55-64 have been most impacted. Despite such figures, the insurance and reinsurance sectors are offering average annual salaries ranging to $200,000 per annum even in such economic conditions. Additionally the 22 major companies in the insurance/reinsurance sector have pumped in close to $1 billion into Bermuda's local economy. This sector employs about 1,700 people out of which 34% are non-Bermudians or expats.

Bermuda Import and Export of goods
Bermuda virtually has no natural resources. Almost all the manufactured goods and foodstuff are imported. In 2009, import was to the tune of $1 billion. Items that Bermuda imports includes food, clothing, household goods, machinery, transport, chemicals, live animals and miscellaneous items.

Much of the import is from US (about $800 million). The other major supplying countries to Bermuda includes UK, Canada and some parts of the Caribbean Islands.

Import in Bermuda has been rising over the years. Duties on import has been a major source of revenue for Bermuda. In financial year 2009-2010, the import duty constituted 24% of the revenue amounting to about $225 million.

Such heavy import duty has its impact on the prices of the goods in the island. Although there is no additional sales tax, you will still find the prices fairly high in Bermuda compared to the other countries like US or even UK.

Bermuda's exports has been quite limited and has been shrinking over the years. In 2009, only $25 million worth of exports has been done. One of the major items of Bermuda export is the fragrance from Easter Lilies that are used in making perfumes. Other items of export includes pharmaceuticals, semitropical produce and light manufactures.

Other areas of economy in Bermuda

Bermuda Agriculture products
Agriculture, which was a major industry in 1920s, was given up slowly. Fertile land for cultivation in this already tiny little island was becoming rare to get. However, agriculture does exist in Bermuda in a small form and includes mainly bananas, vegetables, citrus, flowers, dairy products and honey.

Bermuda GDP
Know about the Gross Domestic Product (GDP) of Bermuda, the sectors that contributed to the economy, the major economic trends and more: Bermuda GDP

Immigrants to Bermuda
Over the years, many people from different countries have migrated to Bermuda to take advantage of best of both the worlds - great economy and fabulous place to stay. As per the 2000 census, 79% of the population are Bermuda born. Here is the breakup for the rest:
28% U.K. immigrants
20% from US
15% Canada,
12% Caribbean, and
10% Portugal/Azores
15% from various other countries

Bermuda Budget 2011
In February 2011, Premier Paula Cox announced the 2011 financial budget of Bermuda. Here is a snapshot with the salient points: 2011 Bermuda Budget

Others
Annual inflation rate (January 2010): 3.2%.
Natural resource: Limestone, used mainly for building.

Regeneration of Bermuda’s economy

2012-06-13T05:08:00.000-07:00

KEY ISSUE — GOVERNMENT’S FINANCIAL POSITION

Government’s current and near-term financial position has a strong and direct impact on Bermuda’s national economy. Government certainly must continue acquiring revenue. However Government’s need for revenue must be very carefully balanced against the more pressing need to avoid further damage and to regenerate Bermuda’s national economy. Wrong handling of Government finances can push the economy to the third hourglass consequence. Bermuda needs the fourth hourglass outcome.

Government’s Financial Policy

In layman’s terms, and consistently using $100 as the typical revenue, this was the generic situation ten years ago in 2002/03:

Government ‘s revenue $100

Government spent this on personnel $46

Spent this on Debt Service Costs ($0.126b Debt) $2

Government had this left over for everything else $52 (actual spending out of what was available was $48, and Government was paying down Debt out of this)

No borrowing. Government was paying down Debt $0

Government actually spent $96 on everything while Government took in $100. Government ended that year with a generic $4 surplus.

That pattern of Government spending held until 2004. In 2004 it changed. This is what has been budgeted to happen in 2012/13. Take note of the major impact that the huge increases in Debt Service and Personnel costs have had:

Government ‘s revenue $100

Government plans to spend on personnel $57 (no pension payment)

Must spend more on Debt Service Costs ($1.4bn Debt) $13 (six times higher!)

So Government will have this left over for everything else $30

But this is not enough so Government will borrow $19 (total of $49 spent on everything else, but this is actually less than in 2002)

In 2012/13 Government plans to spend $119 even though it expects to take in only $100 in revenue. Government is planning to end the year with $19 more Debt.

This pattern of overspending and borrowing commenced in 2004. It is now in its ninth consecutive year. It must change. We have said and we have shown what will happen if this pattern of Government overspending does not change. What, exactly can and must change? For 2012/13, here is what we believe should have happened and still should happen immediately:

Government‘s revenue $100

Government spending on personnel (reduced 25%) $43 (real personnel cost cut)

Must still spend on Debt Service Costs ($1.4bn Debt) $13 (cannot be cut)

Cutting 18% here means this is left over for everything else $44 (total spent on everything else and still much less than in 2002)

No Government borrowing at all. $0

Meaning that this time Government will spend $100 after taking in only $100. Government will end with a ‘balanced budget’ where spending = revenue.

This is the “X” point that must be reached if the debt service cost is to stop steadily eating its way up into revenue as it has been doing every year in the nine years since 2004. After the “X” point, debt service cost can either be maintained at today’s level, and increased revenue can provide funding to pay down Debt, thereby allowing for an increase in spending on everything else.

The key issue? Government must cut spending. The first real cut should have been made sooner and could have been much smaller. Since a real cut has still not been made, the first cut must now be far deeper and much harsher.

If cuts are not made, and if Government revenue continues to flatline or decrease, the third hourglass consequence is inevitable.

Call to Action

What must be done? How can Government (and Quango) personnel costs be cut? Here are five options:

1. Cut all Government (and Quango) salaries/wages by 25 percent or cut all working hours by 25 percent, going from a 35hr/37.5hr paid work week to a 26.25hr/28.25hr paid work week

2. Cut all pay:

— persons paid over $120k a year get a 30 percent reduction

— persons between $70k — $119k take a 25 percent reduction

— persons paid under $70 receive a 20 percent reduction

3. All personnel work four days and take every fifth day off, unpaid or all personnel work four weeks and take the fifth week off, unpaid.

4. Every person who is eligible to retire must retire, thus coming off the Consolidated Fund and going onto the Public Service Superannuation Fund (PSSF)

5. For now, retain all Government employees who wish to stay. Once the economy regenerates, encourage Government employees to consider migrating to the private sector; thus reducing the overall size of the Civil Service, while getting the Civil Service/Quangos back to optimum size — probably around 6,000. This 6,000 will be about 24 percent down from the current 7,855. It will free 1,855 Bermudians to take jobs in an expanding private sector. It will take a lot of the pressure off the underfunded PSSF.

Personnel cost cuts of the magnitude recommended will result in taking at least $120m off the current need to spend. Cuts made in the ‘spending on everything else’ category should provide savings of another $70m — $75m making overall cuts up to approximately $190m of real cutbacks. These overall cuts of $190m will move spending down to the “X” point.

Many businesses and operations in the private sector have already made deep and harsh cuts of this magnitude, and the private sector began cutting back, and has been cutting back, since 2007. Several private sector operations have gone out of business.

Without a dramatic rise or regeneration in the economy, cuts of this kind — or harsher — will inevitably occur.

By not cutting now, and thereby delaying the first real cut, we believe that Government spending policy is actively pushing the national economy towards the third hourglass consequence.

If you disagree with this call for action, then just as clearly and just as precisely, dealing with this call, get involved and say what the alternative or different action should be. Let us know what you see as the alternative or action that will avoid the oncoming reality and that will move Bermuda forward.

Discuss this with your family, friends, workmates, and MPs until a clear national decision is reached and implemented; after which Bermuda can start moving forward again. Saying nothing or dissolving into a massive public shouting match is the same as taking no action. But to take no action will ensure the outcome shown by the third hourglass. Bermuda needs the outcome shown in the fourth hourglass, it is what we owe to this and future generations.

Belgium is world’s fourth most open economy

2012-06-13T01:54:00.003-07:00

In Ernst & Young’s Globalization Index 2011, Belgium ranks in an excellent 4th place. Only Hong Kong, Ireland and Singapore perform better.
The annual Globalization Index examines the world’s 60 biggest economies, considering factors like trade, investments and capital flows, technology, foreign employees and cultural integration. Compared with the 2010 Index, Belgium moved up two spots.

Belgium scores particularly well for its export-driven economy and investment attractiveness. According to Ernst & Young, its small size and limited internal markets are the main factors behind the strong export culture in Belgium. Moreover, due to its well-developed infrastructure, good living standards, central location and highly-skilled workforce, Belgium is also praised by foreign investors. “These two indicators have always had a key impact on Belgium’s high scores in the Globalization Index,’ says Rudi Braes, partner with Ernst & Young Belgium.
An open economy also means a great reliance on global economic and trade networks. However, small, well-concentrated and export-dependant economies, being highly connected with the world’s markets, are also much more susceptible to the global economic situation, slowdowns and crises included. Belgium is no exception. The government has recently revised Belgium’s expected economic growth forecasts in 2012 from 0.8% to 0.2%. Moreover, Belgium’s economic decision-making remains strongly influenced by external forces such as the European Union or rating bureaus, both of which impact national policy-making processes.
Compared with 2008 and 2009, when the globalization of the world economy seemed to be slowing down, since 2010 onwards, it has been once more in full swing. It means that the world’s biggest economies are again becoming gradually more interconnected. Yet, more than 50% of CEOs are expecting a new wave of recession – a second economic shock (‘double dip’) – at the end of 2012, as reported in Ernst & Young’s survey on the 1,000 company leaders worldwide.
Such a crisis would inexorably oblige both governments and companies to introduce more efficient operational strategies in order to better secure national economies and markets respectively. Nonetheless, around 90% of respondents claim that when the double dip occurs, world governments will introduce more protectionist measures designed both to maintain sound budgetary policies and put rising national debts on hold. At any price.

AmCham Belgium’s position
AmCham Belgium welcomes Ernst & Young’s Globalization Index 2012, which once more confirms Belgium’s strong position in the global economy. Notwithstanding its small size, Belgium was and remains one of the key economic players worldwide, being very well connected with global business and commercial networks. Yet, there is still room for better performance, particularly in the area of public finances and wage policies, where automatic indexation, high social charges and a low employment rate are the main obstacles for companies to invest and create jobs. If Belgium addresses these issues, it can use its extraordinary strengths and easily regain a leading position in foreign investments. More on foreign investment trends and forecasts in Belgium can be found in the Chamber’s US Direct Investment Report in Belgium 2011.

Albania showing critical signs of economic crisis

2012-06-11T10:16:00.000-07:00

Though the government largely refuses to acknowledge it, a number of economic indicators are showing critical signs of decline in the Albanian economy for the first quarter of 2012, following a slowdown in economic growth over the past two years.

Inflation reached 0.6% during February, according to INSTAT, marking the very limits of deflation, also confirming serious hits in both demand and consumption. There are declines in private and public investment. The construction and industry sectors , in particular have been among the hardest hit.

Albanians consumed less, as imports fell for a number of categories and exports fell by 21% during the two first months of the year according to INSTAT.

Remittances, one of the main sources of income in the Albanian economy from emigrants working abroad, were down by 9% last year compared to 2010.

Shkelqim Cani, former governor of Central Bank of Albania, says the government should have accepted the crisis a long time ago. "The government did not take any measure and now we are suffering the consequences of their lack of knowledge, manipulation of reality, and their inaction," Cani told SETimes.

He predicts this year will be even more difficult. "The debt cost was extremely high and has now reached disturbing limits." He added that with 2013 being an election year, debt levels will soar further. Debt levels reached the maximum limit of round 60 % of GDP.

Gjergji Filipi, director of research at the Agenda Institute, a think tank, is also concerned.

"Consumers and the biggest investor in the country, the government, visibly spent less in 2010 and 2011, and data from these first months of 2012 confirmed that the country is immersed into crisis," he told SETimes.

But Sherefedin Shehu, an MP representing the ruling Democratic Party, has a different take on the matter. A member of parliament's Committee for Economy and Finance, he told SETimes "Consumption setbacks are caused by another direction, the saving trend," suggesting saving is a psychological response to international crises.

"The crisis is not caused by Albanian factors. Albania is only influenced by the crises; we are having growth deceleration, not a drop in economic growth," he stressed.

The Central Bank has been lowering several time the interest rate for Lek, to the actual lowest historic rate of 4. 25% in attempts to increase consumption, but the market reaction was quite weak. "Monetary policy could have been more aggressive. Central Bank could have realized an aggressive reduction of interest rates, within a trimester with 1 %," said former Central Bank Governor Cani.

In terms of solutions, Shehu suggests one way out of economic slowdown would be "government partnership with the private sector" to boost investment and employment.

Cani thinks reforms aimed at institutions, public administration, infrastructure, human capital, and good governance would offer a way out, as well as support for small and medium enterprises and agriculture.

Filipi says structural problems must be addressed, as opposed to "cosmetic" interventions. He acknowledged however that "Deep reforms might be painful and unpopular, but their delay enlarges the problem."

The IMF is projecting an economic growth rate of 0.5 % for Albania this year, slightly lower than the regional level of 0.7 %. Ever optimistic, the Albanian government projection remains 4.3 %.

The Netherlands economic overview

2012-06-09T04:29:00.000-07:00

According to the Macro Economic Outlook 2012 (MEV 2012), published by CPB Netherlands Bureau for Economic Policy Analysis today, the Dutch economy is projected to grow by 1½% during 2011 and by 1% during 2012. The economic growth is largely attributable to exports. At this moderate rate of growth, unemployment will not decrease any further and is projected to stabilize at an average of 4¼%. Purchasing power will decrease in both forecast years. The forecasted budget deficit is diminishing rapidly, from 5.1% of gross domestic product (GDP) in 2010 to 2.9% of GDP next year. This relatively gloomy picture is considered the most likely scenario based on current information, and hence the picture on the basis of which the budget has been prepared (the ‘baseline’).

These figures have taken into account the recent turmoil in financial markets, although not the possibility of a new financial crisis. The risk of a new financial crisis is nonetheless very real. The turbulence in financial markets indicates the existence of great uncertainty and the likelihood of a negative outcome is considerable. The Macro Economic Outlook 2012 therefore includes an alternative scenario in which the possible effects of a new financial crisis are illustrated. The uncertainties are too great and diverse for this to constitute a detailed scenario, however. It does give an indication nonetheless of the possible outcomes in the event a new shock, which has not yet been factored in at this moment, is delivered to the financial markets - whether in Europe, the United States or elsewhere.

The signals are flashing red for the global economy. In the highly developed economies, the slowdown of the growth rate was most pronounced in the first half of 2011 due to the increased uncertainty on the financial markets, budgetary reorganisation, the high oil price and the earthquake in Japan. These are compounded by the fact that the growth in imports in emerging markets is declining due to monetary tightening and capacity bottlenecks. Global GDP is projected to grow by 3½% during 2011 and 2012, compared with 4¾% during 2010. This will result in a substantial slowing down of the export growth rate for the Netherlands.

The Dutch economy
The most recent insights suggest that GDP in the Netherlands will grow by 1½% during 2011 and by 1% during 2012, significantly below the average of the previous 20 years (2¼%) and also below the potential growth rate of 1¾% forecast in the Economic Outlook 2011-2015. GDP in the Netherlands will not return to pre-credit crisis levels until the second half of 2012, meaning that the economy has merely been marking time for a period of almost four years. Dutch economic growth is dampened somewhat by the austerity measures and tax increases introduced by the cabinet (in particular in 2012), but is affected chiefly by the impact of the worldwide slowdown in growth that commenced in early 2011. The estimate has taken into account the impact of the substantial turbulence in financial markets that erupted at the beginning of August. The possibility of a new financial crisis has not been taken into account in the baseline, although such a scenario certainly cannot be ruled out.

Growth comes from exports
Economic growth in the Netherlands will come largely from exports in 2011 and 2012, with domestic expenditure only making a limited positive contribution to growth of ¼ to ½% point per year. Dutch consumers are feeling the after-effects of the crisis (loss of purchasing power, lost assets) and overall will not make any contribution to economic growth during 2011 and 2012. Public spending will inhibit the GDP growth rate next year. In the past four decades, public spending has only made a negative contribution to growth on one previous occasion, in 2004. The negative impact of public spending is not surprising given the extensive austerity measures introduced by the cabinet. Following a sharp decline in 2009 and a further decrease in 2010, business investments are projected to recover well in 2011, with a growth rate of 9¼%. This will not go all the way to offsetting the loss sustained in the previous years, however. Due to the fall off in economic activity in 2012, a decline in the growth of investments to 3¼% is once again anticipated for the coming year.

Government finances are improving, partly due to policy.....
In spite of a renewed slowing of growth, the public deficit will diminish further next year, chiefly due to austerity measures and tax increases. The deficit will decrease from 5.1% of GDP in 2010 to a projected 2.9% of GDP in 2012. This means that the deficit will have halved compared with the level in 2009 and will be below the ‘Maastricht’ ceiling of 3% of GDP for the first time since 2008. A relatively large part of the austerity measures will affect social security expenditure next year. Healthcare costs will continue to increase, albeit at a lower rate than in previous years. The tax and premium burden will increase in the projection period, from 38.8% of GDP in 2010 to 39.2% in 2012. This increase is entirely due to the effects of government policy and contributes to the reduction of the deficit.

The European debt crisis does not have any noticeable direct impact (for the time being) on the public deficit in the projection period. The bilateral loan to Greece is financed by the issuing of Dutch government bonds, thereby resulting in more interest payments for the Dutch Treasury. However, these additional interest payments are more than compensated by the interest payments made by the Greek government on the bilateral loan. Indirectly there are effects, both positive and negative, on the public deficit. The turbulence in Europe has led to investors taking refuge in bonds of strong eurozone countries, such as Germany and the Netherlands. This has resulted in downward pressure on the interest payments by the government and hence to a reduction of the public deficit. The increased uncertainty also puts pressure on economic growth, however, which is bad for government finances.

.... purchasing power in 2012 is deteriorating due to policy
Inflation, which at 1.3% was still limited in 2010, is projected to be 2¼% in 2011 and 2% in 2012. The increase in inflation during 2011 is largely due to higher import prices. In 2012 domestic factors, such as rising housing rents, gas prices, indirect taxation and unit labour costs, in particular will push up the general price level. The increase in contract wages in the private sector is forecast to rise from 1.0% during 2010 to 1½% in 2011 and to 2% in 2012. Contractual wages develop with a lagged response to the increase in inflation and the reduction in unemployment.

During 2011, purchasing power will decrease by an average of 1%, mainly because wages lag behind price movements. As a result of austerity measures and tax increases (and in the case of pensioners, the non-indexation of supplementary pensions), purchasing power will deteriorate during 2012 by an average of 1%. A change of -0.4% in 2010 means that the median purchasing power will then have decreased by roughly 2½% since 2009. This is the first time since the early 1980s that purchasing power has decreased in several successive years.
Source: Macro Economic Outlook 2012; CPB Netherlands Bureau for Economic Policy Analysis

Finland Economy

2012-05-19T11:40:00.002-07:00

Economy - overview

Finland has a highly industrialized, largely free-market economy with per capita output roughly that of Austria, Belgium, the Netherlands, and Sweden. Trade is important with exports accounting for over one third of GDP in recent years. Finland is strongly competitive in manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in high-tech exports such as mobile phones. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Finland had been one of the best performing economies within the EU in recent years and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in 2009, with Finland experiencing one of the deepest contractions in the euro zone. A recovery of exports, domestic trade, and household consumption stimulated economic growth in 2010. The recession left a deep mark on general government finances and the debt ratio, turning previously strong budget surpluses into deficits. Despite good growth prospects, general government finances will remain in deficit during the next few years. The great challenge of economic policy will be to implement a post-recession exit strategy in which measures supporting growth will be combined with general government adjustment measures. Longer-term, Finland must address a rapidly aging population and decreasing productivity that threaten competitiveness, fiscal sustainability, and economic growth.

GDP (purchasing power parity)

$186 billion (2010 est.)
$180.3 billion (2009 est.)
$196.5 billion (2008 est.)
note: data are in 2010 US dollars

GDP (official exchange rate)

$239.2 billion (2010 est.)

GDP - real growth rate

3.1% (2010 est.)
-8.2% (2009 est.)
0.9% (2008 est.)

GDP - per capita (PPP)

$35,400 (2010 est.)
$34,400 (2009 est.)
$37,500 (2008 est.)
note: data are in 2010 US dollars

GDP - composition by sector

agriculture: 2.9%
industry: 29%
services: 68.1% (2010 est.)

Population below poverty line

NA%

Labor force

2.672 million (2010 est.)

Labor force - by occupation

agriculture and forestry: 4.9%
industry: 16.7%
construction: 7.1%
commerce: 19.4%
finance, insurance, and business services: 12.8%
transport and communications: 6.3%
public services: 32.8% (2009)

Unemployment rate

8.4% (2010 est.)
8.2% (2009 est.)

Unemployment, youth ages 15-24

total: 20.5%
male: 22%
female: 18.8% (2009)

Household income or consumption by percentage share

lowest 10%: 3.6%
highest 10%: 24.7% (2007)

Distribution of family income - Gini index

26.8 (2008)
25.6 (1991)

Investment (gross fixed)

18.8% of GDP (2010 est.)

Budget

revenues: $125.2 billion
expenditures: $131.9 billion
note: Central Government Budget (2010 est.)

Taxes and other revenues

52.4% of GDP (2010 est.)

Budget surplus (+) or deficit (-)

-2.8% of GDP (2010 est.)

Public debt

48.4% of GDP (2010 est.)
43.8% of GDP (2009 est.)

Inflation rate (consumer prices)

1.7% (2010 est.)
1.6% (2009 est.)

Central bank discount rate

1.75% (31 December 2010)
1.75% (31 December 2009)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate

2.267% (31 December 2010 est.)
2.552% (31 December 2009 est.)

Stock of money

$NA
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders

Stock of narrow money

$113 billion (31 December 2010 est.)
$113.6 billion (31 December 2009 est.)
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money

$172.9 billion (31 December 2010 est.)
$173.4 billion (31 December 2009 est.)

Stock of quasi money

$NA

Stock of domestic credit

$242.6 billion (31 December 2010 est.)
$242.2 billion (31 December 2009 est.)

Market value of publicly traded shares

$118.2 billion (31 December 2010)
$91.02 billion (31 December 2009)
$154.4 billion (31 December 2008)

Agriculture - products

barley, wheat, sugar beets, potatoes; dairy cattle; fish

Industries

metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing

Industrial production growth rate

5.1% (2010 est.)

Electricity - production

67.94 billion kWh (2009 est.)

Electricity - production by source

fossil fuel: 39%
hydro: 18.7%
nuclear: 30.4%
other: 11.8% (2001)

Electricity - consumption

83.09 billion kWh (2008 est.)

Electricity - exports

3.375 billion kWh (2009 est.)

Electricity - imports

12.09 billion kWh (2009 est.)

Oil - production

8,718 bbl/day (2010 est.)

Oil - consumption

217,400 bbl/day (2010 est.)

Oil - exports

133,600 bbl/day (2009 est.)

Oil - imports

318,100 bbl/day (2009 est.)

Oil - proved reserves

0 bbl (1 January 2011 est.)

Natural gas - production

0 cu m (2010 est.)

Natural gas - consumption

4.782 billion cu m (2010 est.)

Natural gas - exports

0 cu m (2010 est.)

Natural gas - imports

4.782 billion cu m (2010 est.)

Natural gas - proved reserves

0 cu m (1 January 2011 est.)

Current Account Balance

$7.561 billion (2010 est.)
$5.892 billion (2009)

Exports

$69.4 billion (2010 est.)
$62.91 billion (2009 est.)

Exports - commodities

electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber

Exports - partners

Sweden 11.6%, Germany 10.2%, Russia 8.5%, US 7%, Netherlands 6.9%, China 5%, UK 4.9% (2010)

Imports

$65 billion (2010 est.)
$58.12 billion (2009 est.)

Imports - commodities

foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, grains

Imports - partners

Russia 17.4%, Germany 14.7%, Sweden 14.5%, Netherlands 8.2%, China 4.4% (2010)

Reserves of foreign exchange and gold

$9.555 billion (31 December 2010 est.)
$11.46 billion (31 December 2009 est.)

Debt - external

$518 billion (30 June 2011)
$370.8 billion (30 June 2010)

Stock of direct foreign investment - at home

$82.71 billion (31 December 2010 est.)
$84.44 billion (31 December 2009 est.)

Stock of direct foreign investment - abroad

$130.6 billion (31 December 2010 est.)
$126.8 billion (31 December 2009 est.)

Exchange rates

euros (EUR) per US dollar -
0.755 (2010)
0.7198 (2009)
0.6827 (2008)
0.7345 (2007)
0.7964 (2006)

Venezuela Economy

2012-05-16T09:43:00.000-07:00

AN UPPER-MIDDLE INCOME, oil-producing country, Venezuela enjoyed the highest standard of living in Latin America. The country's gross domestic product ( GDP) in 1988 was approximately US$58 billion, or roughly US$3,100 per capita. Although the petroleum industry has dominated the Venezuelan economy since the 1920s, aluminum, steel, and petrochemicals diversified the economy's industrial base during the 1980s. Agriculture activity was relatively minor and shrinking, whereas services were expanding.
Venezuela possessed enormous natural resources. The country was the world's third largest exporter of oil, its ninth largest producer of oil, and accounted for more oil reserves than any other nation in the Western Hemisphere. The national petroleum company, Venezuelan Petroleum Corporation (Petróleos de Venezuela, S.A.--PDVSA), was also the third largest international oil conglomerate. Because of its immense mineral wealth, Venezuela in 1990 was also poised to become an international leader in the export of coal, iron, steel, and aluminum.
Despite bountiful natural resources and significant advances in some economic areas, Venezuela in 1990 continued to suffer from the debilitating effects of political patronage, corruption, and poor economic management. The country's political and economic structures often allowed a small elite to benefit at the expense of the masses. As a result, Venezuela's income distribution was uneven, and its social indicators were lower than the expected level for a country with Venezuela's level of per capita income. Many economic institutions were also weak relative to the country's international stature. The efforts of the administration of Carlos Andrés Pérez (president, 1974-79, 1989- ) to reform the economy, especially if coupled with political and institutional reforms, would likely determine whether the country would reach its extraordinary potential.

<>GROWTH AND STRUCTURE OF THE ECONOMY
<>ECONOMIC POLICY

Venezuela - GROWTH AND STRUCTURE OF THE ECONOMY

Spanish expeditionary arrived in what is present-day Venezuela in 1498, but generally neglected the area because of its apparent lack of mineral wealth. The Spaniards who remained pursued rumored deposits of precious metals in the wilderness, raised cattle, or worked the pearl beds on the islands off the western end of the Península de Paria. Colonial authorities organized the local Indian into an encomienda system to grow tobacco, cotton, indigo, and cocoa. The Spanish crown officially ended the encomienda system in 1687, and enslaved Africans replaced most Indian labor. As a result, Venezuela's colonial economic history, dominated by a plantation culture, often more closely resembled that of a Caribbean island than a South American territory.

Cocoa, coffee, and independence from Spain dominated the Venezuelan economy in the eighteenth and nineteenth centuries. Cocoa eclipsed tobacco as the most important crop in the 1700s; coffee surpassed cocoa in the 1800s. Although the war of independence devastated the economy in the early nineteenth century, a coffee boom in the 1830s made Venezuela the world's third largest exporter of coffee. Fluctuations in the international coffee market, however, created wide swings in the economy throughout the 1800s.

The first commercial drilling of oil in 1917 and the oil boom of the 1920s brought to a close the coffee era and eventually transformed the nation from a relatively poor agrarian society into Latin America's wealthiest state. By 1928 Venezuela was the world's leading exporter of oil and its second in total petroleum production. Venezuela remained the world's leading oil exporter until 1970, the year of its peak oil production. As early as the 1930s, oil represented over 90 percent of total exports, and national debate increasingly centered on better working conditions for oil workers and increased taxation of the scores of multinational oil companies on the shores of Lago de Maracaibo. In 1936 the government embarked on its now-famous policy of sembrar el petróleo, or "sowing the oil." This policy entailed using oil revenues to stimulate agriculture, and later, industry. After years of negotiations, in 1943 the government achieved a landmark 50 percent tax on the oil profits of the foreign oil companies. Although Venezuela reaped greater benefits from its generous oil endowment after 1943, widespread corruption and deceit by foreign companies and indifferent military dictators still flourished to the detriment of economic development. Nevertheless, despite unenlightened policies, economic growth in the 1950s was robust because of unprecedented world economic growth and a firm demand for oil. As a result, physical infrastructure, agriculture, and industry all expanded swiftly.

With the arrival of democracy in 1958, Venezuela's new leaders concentrated on the oil industry as the main source of financing for their reformist economic and social policies. Using oil revenues, the government intervened significantly in the economy. In 1958 the new government founded a new noncabinet ministry, the Central Office of Coordination and Planning (Oficina Central de Coordinación y Planificación--Cordiplan) in the Office of the President. Cordiplan issued multiyear plans with broad economic development objectives. The government in 1960 embarked on a land reform program in response to peasant land seizures. In 1960 policy makers also began to create regional development corporations to encourage more decentralized planning in industry. The first such regional organization was the Venezuelan Corporation of Guayana (Corporación Venezolana de Guayana--CVG), which eventually oversaw nearly all major mining ventures. The year 1960 also marked the country's entrance as a founding member into the Organization of Petroleum Exporting Countries (OPEC), which set the stage for the economy's rapid expansion in the 1970s. Throughout the 1960s, the government addressed general social reform by spending large sums of money on education, health, electricity, potable water, and other basic projects. Rapid economic growth accompanied these reformist policies, and from 1960 to 1973 the country's real per capita output increased by 25 percent.

The quadrupling of crude oil prices in 1973 spawned an oil euphoria and a spree of public and private consumption unprecedented in Venezuelan history. The government spent more money (in absolute terms) from 1974 to 1979 than in its entire independent history dating back to 1830. Increased public outlays manifested themselves most prominently in the expansion of the bureaucracy. During the 1970s, the government established hundreds of new state-owned enterprises and decentralized agencies as the public sector assumed the role of primary engine of economic growth. The Venezuelan Investment Fund (Fondo de Inversiones de Venezuela--FIV), responsible for allocating huge oil revenues to other government entities, served as the hub of these institutions. In addition to establishing new enterprises in such areas as mining, petrochemicals, and hydroelectricity, the government purchased previously private ones. In 1975 the government nationalized the steel industry; nationalization of the oil industry followed in 1976. Many private citizens also reaped great wealth from the oil bonanza, and weekend shopping trips to Miami typified upper-middle-class life in this period.

A growing acknowledgment of the unsustainable pace of public and private expansion became the focus of the 1978-79 electoral campaign. Because of renewed surges in the price of oil from 1978 to 1982, however, the government of Luis Herrera Campins (president, 1979-84) scrapped plans to downgrade government activities, and the spiral of government spending resumed. In 1983, however, the price of oil fell and soaring interest rates caused the national debt to multiply. Oil revenues could no longer support the array of government subsidies, price controls, exchange-rate losses, and the operations of more than 400 public institutions. Widespread corruption and political patronage only exacerbated the situation.

The government of Jaime Lusinchi (president, 1984-89) attempted to reverse the 1983 economic crisis through devaluations of the currency, a multi-tier exchange-rate system, greater import protection, increased attention to agriculture and food self-sufficiency, and generous use of producer and consumer subsidies. These 1983 reforms stimulated a recovery from the negative growth rates of 1980-81 and the stagnation of 1982 with sustained modest growth from 1985 to 1988. By 1989, however, the economy could no longer support the high rates of subsidies and the increasing foreign debt burden, particularly in light of the nearly 50 percent reduction of the price of oil during 1986.

In 1989 the second Pérez administration launched profound policy reforms with the support of structural adjustment loans from the International Monetary Fund ( IMF) and the World Bank. In February 1989, price increases directly related to these reforms sparked several days of rioting and looting that left hundreds dead in the country's worst violence since its return to democracy in 1958. Ironically, Pérez, who oversaw much of the government's expansion beginning in the 1970s, spearheaded the structural reforms of 1989 with the goal of reducing the role of government in the economy, orienting economic activities toward the free market, and stimulating foreign investment. The most fundamental of the 1989 adjustments, however, was the massive devaluation of the bolívar from its highly overvalued rate to a market rate. Other related policies sought to eliminate budget deficits by 1991 through the sale of scores of state-owned enterprises, to restructure the financial sector and restore positive real interest rates, to liberalize trade through tariff reduction and exchange-rate adjustment, and to abolish most subsidies and price controls. The government also aggressively pursued debt reduction schemes with its commercial creditors in an effort to lower its enervating foreign debt repayments.

Venezuela - ECONOMIC POLICY

Fiscal Policy

The government's fiscal accounts generally showed surpluses until the mid-1980s because of the immense oil income. In 1986, however, the drop in oil prices triggered a fiscal deficit of 4 percent; the deficit exceeded 6 percent in 1988.

The major actors in fiscal policy were Cordiplan, which was responsible for long-term economic planning, and the Budget Office of the Ministry of Finance, which oversaw expenditures and revenues for each fiscal year ( FY). Cordiplan also oversaw the fiscal status of the FIV, PDVSA, the social security system, regional and municipal governments, the foreign exchange authority, state-owned enterprises, and other autonomous agencies. But economic planning and budgeting suffered from a serious lack of inter agency cooperation, and five-year plans and annual public-sector investments often lacked cohesiveness.

Total government spending reached about 23 percent of GDP in 1988. Current expenditures accounted for 70 percent of overall outlays, compared with 30 percent for capital expenditures. Capital investments, after a decline in the mid-1980s, expanded slowly during the late 1980s. Interest payments, two-thirds of which serviced foreign debt, represented 11 percent of total expenditures in 1988, a typical figure for most of the decade.

The revenue structure in the late 1980s remained excessively dependent on oil income. In 1988 petroleum revenues, both income taxes and royalties, provided 55 percent of total revenue. Although oil's contribution to total revenue had declined in the 1980s, most economists felt that it had not declined sufficiently. Overall, taxes contributed 80 percent of total revenue in 1988, with the remaining 20 percent derived from such nontax sources as royalties and administrative fees. Tax exemptions, deductions, allowances, and outright evasion greatly reduced the effectiveness of fiscal policy. Officials planned to inaugurate a value-added tax in 1990 as another means to widen the revenue base.

Monetary and Exchange Rate Policies

The Central Bank of Venezuela (Banco Central de Venezuela-- BCV) performed all typical central bank functions, such as managing the money supply, issuing bank notes, and allocating credit. As part of the country's overall financial sector reform, the BCV embarked in 1989 on numerous revisions of monetary policy aimed at improving the bank's control over the money supply. The most important policy change was the government's decision to allow the interest rate to fluctuate with market rates. Despite its initial inflationary effect, the policy created incentives for savings and investment, thereby attracting and retaining capital. Deposits swelled noticeably during 1989. In 1990, however, the Venezuelan Supreme Court declared that the BCV was legally responsible for setting interest rates. The BCV hoped to rescind the law in the early 1990s.

Venezuela traditionally enjoyed general price stability; inflation averaged a mere 3 percent from 1930 to 1970. Annual price increases did not exceed 25 percent until the mid-1980s. During the 1970s, many economists credited the FIV with successfully managing and investing overseas the country's oil windfalls in a way that prevented inordinate price instability. By the 1980s, however, financial deterioration, weakening BCV authority, numerous devaluations, and fiscal deficits had combined to push consumer prices and inflation up dramatically in the late 1980s. The average consumer price index rose by an unprecedented 85 percent in 1989. Some price increases were associated with the 1989 structural adjustment program, and thus represented what some economists refer to as "correctionary inflation," the trade-off for eliminating previous distortions in prices. By 1990 only a handful of price controls remained in effect.

The bolívar was traditionally a very stable currency, pegged to the United States dollar at a value of B4.29=US$1 from 1976 to 1983. The bolívar experienced several devaluations from 1983 to 1988, when monetary authorities implemented a complicated fourtier exchange-rate system that provided special subsidized rates for certain priority activities. The multiple exchange-rate system, however, proved to be only a stopgap measure, eventually giving way to a 150 percent devaluation at the market rate in 1989. The 1989 devaluation unified all rates from the official B14=US$1 rate to the new B36=US$1 rate, which was a floating rate subject to the supply and demand of the market. By late 1990, the value of the bolívar had crept down to B43=US$1.

In a related matter, the Differential Exchange System Office (Régimen de Cambio de Dinero--Recadi), the organization that oversaw the various exchange rates, became the focus of one of the largest scandals in the decade. Between 1983 and 1988, businessmen bribed Recadi officials in return for access to halfpriced United States dollars to funnel an alleged US$8 billion overseas. When the scandal broke in 1989, law enforcement agents investigated as many as 2,800 businesses, and more than 100 executives from leading multinational enterprises fled the country in fear of prosecution.

France Economy

2012-05-16T03:52:00.000-07:00

GDP
Actual: 0.0% • Previous: 0.2%	Next Release: N/A

French real GDP was unchanged on a quarter-ago basis in the three months to March, following a revised 0.1% increase in the previous stanza. The outcome was better than Moody’s Analytic and the Bloomberg market consensus had expected. Domestic demand contributed to GDP, while net foreign trade was a drag. On a year-ago basis, GDP growth slowed to 0.3% from a revised 1.2% in the fourth quarter. The economy will go into a mild recession in coming quarters as fiscal tightening in France and its key European trading partners, combined with uncertainty about the sovereign debt crisis weigh, on activity.

Employment Situation
Actual: 9.4% • Previous: 9.3%	Next Release: N/A

The seasonally adjusted unemployment rate for mainland France rose to 9.4%, the highest in nearly two years, in the fourth quarter from 9.3% in the previous stanza. Weak public and private sector hiring will put upward pressure on the unemployment rate in the coming quarters.

Industrial Production
Actual: -0.9% • Previous: 0.3%	Next Release: N/A

French industrial production fell 0.9% m/m in March, following a revised 0.9% rise in the previous month. On a year-ago basis, production contracted 0.9%, less than a 1.4% decline in February. Production will remain under pressure in the coming months because of fiscal tightening at home and in key European trading partners and uncertainty about the economic program of France’s new president weighing on the demand for local goods.

Trade balance
Actual: -€ 5.7 bil • Previous: -€ 6.4 bil	Next Release: N/A

France’s seasonally adjusted foreign trade deficit narrowed to €5.7 billion in March from a shortfall of €6.4 billion in the previous month. The trade balance will remain under pressure in the coming months because Moody’s Analytics believes that the euro zone has gone into a mild recession, which will weigh on demand for French exports.

Taiwan economy 2012

2012-05-14T11:42:00.000-07:00

Despite various negative factors affecting the international economic situation in the first half of 2011, the continuation of the global economy is still revived, and the domestic economy to grow steadily with a 5.54% rate. But from the second half of the year, the European debt crisis suddenly become a major factor threatening the world economy. Major forecasting agencies recently revised down the growth of the global economy in 2011 and 2012. With regard to the domestic economy, leading indicators continue to decline, due to the slow growth of economic activities. We estimate that 2011 real GDP growth to be 4.38%. The deteriorating global economic environment will continue to keep Taiwan's economy grow 3.81% in 2012.

With regard to private consumption, the slow growth in the domestic economy affected consumer confidence. The negative impact of lower equity prices and reduce work hours, it is estimated that the domestic annual growth rate of real private consumption will be adjusted downward from 3.38% in 2011 to 2.72% in 2012. Because of the negative effects of the international economic situation, business investment is expected to decline, as private investment. But with government efforts to increase investment and private participation in public construction to stimulate investment is expected to increase. Therefore, it is estimated that the annual growth of private investment will continue to grow steadily, reaching 1.91% in 2012 of -2.36% in 2011.

With regard to foreign trade, the European debt crisis still a negative impact on the global requirements, and therefore exports to China, Japan, and Europe fell in November 2011. But with more than 90% zero products ECFA early harvest list starting next year, the export momentum is expected to be larger. It is estimated that the annual growth of Taiwan of real goods and services exports will be 5.15% in 2012. Regarding the imports, because of the negative effects of the recession on business investment, the annual growth of real goods and services imports are expected to fall to 2.2%.

Regarding the price, with the slow growth in the global economy, the prices of international crude oil and raw materials declined. Meanwhile, as the European countries still tight fiscal policy to control the deficit, global demand is expected to decline, the expected inflation remains within reasonable limits. The annual growth rate for Consumer Price Index of Taiwan in 2012 is expected to decrease slightly from 1.35% to 1.16%. Moreover, the annual growth of the Wholesale Price Index expected to decrease from 4.25% to 2.35%. As for money, with sufficient domestic equity funds is the annual growth rate of monetary expansion is expected to grow steadily in 2012 with 5.98% of narrow money supply (M1B) and 5.24% of broad money (M2).

In short, the European debt crisis had a significant influence on the dynamics of foreign claims on Taiwan. Fortunately, the U.S. economy is expected to continue growing, albeit slowly and with the leading Chinese emerging economies in Asia will likely continue to perform relatively well in 2012. Taiwan is estimated that GDP growth will remain at 3.81% next year. Looking ahead, the credit problems of issuers of government bonds in Europe, the possibility of a hard landing for the Chinese economy, the fragile economic recovery in the U.S. and the uncertain situation in Iran is worth noting that in the near future. Is the expected errors and uncertainties into account that 50% of GDP forecast is between 2.07% and 5.64%.

Russia's Economy Enters 2012

2012-05-11T10:44:00.001-07:00

Economic growth in Russia should stay dynamic in the first half of this year, but we anticipate that the economy will lose some steam in the second part of the year. Following 4.2% growth in 2011, we think the slowdown will lead to GDP growth of about 3.5% for the full year. Initially, we expect that consumption will be boosted by the increase in military salaries and pensions. Inflation, too, should remain moderate in the first half of the year because the government has postponed regulated tariff hikes on electricity and gas prices to July, allowing inflation to stay below 5%. Consumer lending, which reached an expected double-digit rate last year, should also continue to underpin consumer demand in the first part of 2012.

Later in the year, though, we see growth moderating for several reasons. The Central Bank of Russia (CBR) is likely to curb credit growth in the second part of the year. This is because inflation will likely accelerate again on the back of the July electricity and gas tariff hikes, which in turn will slow growth in consumer demand. The fixed capital investment outlook is equally uncertain. Investment growth accelerated in the second part of 2011 on the back of a rise in corporate profits and bank lending. This trend will continue in the first part of 2012, but is likely to slow in the following 12 months as bank lending becomes tighter and somewhat more expensive.

Russia's economic growth is likely to slow this year, to about 3.5% GDP on higher inflation and tighter bank lending. We expect GDP growth to average 4% in 2013.
This follows stronger growth last year on the back of strong industrial production, lower unemployment, and buoyant consumer demand.
Nevertheless, a recovery in investment spending last year was not enough to ease capacity constraints in the underdeveloped natural resources extraction sector, which makes up 25% of the economy.
Furthermore, capital outflows have accelerated on perceived investment restraints, and political uncertainties about structural reforms. We expect that these uncertainties will continue after the March 4 presidential election.

Russia's external sector will remain highly dependent on the outlook for commodity prices. In our baseline scenario for the world economy, we anticipate that growth in developed markets will bounce back in the second part of 2012 on the back of a recovery in emerging markets, in particular China and Brazil. This would be supportive of Brent oil prices staying above $115 per barrel (/bbl) through the beginning of 2013. We note, however, that the so-called breakeven point for Ural oil prices (the price associated with a balanced budget) has risen every year and currently stands above $120/bbl.

Overall we anticipate that real GDP growth will stabilize at about 3.5% this year before experiencing some acceleration on the back of a more dynamic world economy in 2013 (see chart 1).

Chart 1

Momentum From Last Year Carries The Economy Forward

Russia's economy is entering 2012 on a good footing, after 2011 turned out to be a reasonably strong year on balance, with GDP and industrial production up and unemployment down. GDP reached 4.3%, the same as in 2010, on the back of strong credit growth and a rebound in incomes. The industrial production index (IPI) gained 3.3% in manufacturing and 1.8% in mining and quarrying in December 2011 on the same month of the previous year. Both these IPIs had shown upbeat movement during 2010 and 2011, reflecting the recovery from the slump in 2009. Meanwhile, the unemployment rate declined to 6.1% in December, its lowest level since mid-2008. The federal budget recorded a surplus equal to 0.8% of GDP (after minus 4.0% a year earlier), with an average oil price of $109 per barrel.

Buoyant consumer demand also helped drive strong GDP growth. Retail sales accelerated to a record high for the year, rising 9.5% in the 12 months to December. Meanwhile, retail lending rose by 36% over the 12 months to December. Consumption was underpinned by lower inflation. The Consumer Price Index (CPI) dropped to a record low of 6.1% in the 12 months to December, near the floor of the 6%–7% target band set by the Central Bank of Russia (CBR). Between 2004 and 2010, Russia had the highest inflation rate among the so-called BRIC countries (Brazil, Russia, India, China), but this was no longer the case in 2011, as Russia's inflation ran slightly below that of Brazil. This decrease is due in part to the shift in the CBR's monetary policy to a more flexible exchange rate. This has allowed the CBR to reduce its interventions on foreign exchange markets, which used to be an important driver of money supply growth prior to 2008. Money supply growth declined to about 20% in 2011 (chart 2).

Chart 2

A partial recovery in investment and construction also supported the economy overall in 2011, but in our view will not be sufficient to ease the capacity constraints in Russia's important natural-resource extraction sector. Capital spending in December 2011 was 9% up on the previous December, while construction was up 6.7%. Natural resource extraction currently represents 25% of the entire economy. Exports of fuels and metals typically account for three-quarters of total Russian exports, and the gas and oil sector is responsible for as much as 60% of federal budget receipts. Oil and gas faces significant capacity constraints because of an extended period of insufficient investment following the post-soviet economic transition. Moreover, capacity needed to replace depleted older deposits is typically associated with more difficult geological, logistical, and climatic conditions and hence is far more capital intensive to develop and exploit. Capital expenditures remain heavily concentrated: The total capital expenditures of OAO Gazprom, Russian Railways (JSC), OAO AK Transneft, as well as electric utilities reached 4.1% of GDP in 2011. Investment by those very large companies is also heavily dependent on growth in tariffs set by the government. Year on year, these tariffs can increase at a more or less rapid rate depending on the overall economic and political context: Electricity prices rose 13% in 2011, gas prices 15%, but further hikes in 2012 have been postponed to the second half of the year.

Russia's external sector benefitted from the rise in commodity prices during 2011. Merchandise exports grew at 32.2% year on year to reach $380.1 billion. Of this amount, 65.5% were exports of oil and gas, up from 63.5% in the same period of 2010. While merchandise imports grew at an even faster pace of 34.8% to reach $232.3 billion, this was from a much lower base than exports, so that the merchandise trade surplus widened compared with a year earlier to $147.7 billion, an increase of $32.4 billion. At the same time, the physical volume of energy exports from Russia was apparently little changed from a year earlier. According to data published by RosStat for the first 10 months of 2011, the physical volume of crude oil exports was actually down 4.0%, refined product exports were 1.9% lower, and natural gas exports were up 7.4%. But the received price for crude oil in October was 36.7% higher than in the same month a year earlier, and the price of natural gas was up 25.2%

Capital Outflows Have Intensified On Investment Constraints And Political Uncertainty

In spite of these economic achievements, CBR estimates suggest that the best part of Russia's current account surplus of $101 billion (5.8% of GDP) in 2011 was absorbed by $84 billion of capital outflows. This is the second-largest outflow in the history of modern Russia (chart 3).

Chart 3

This sharp rise in capital outflows is the result of a combination of factors, in our view. First, the global financial crisis and the decrease in risk appetite by international investors has made the refinancing of foreign debt and new borrowings abroad more difficult, putting a cap on capital inflows. Additionally, the increased flexibility of the ruble exchange rate has made portfolio inflows based on carry trade less attractive. Second, outbound investments by Russian banks have been a key contributor to capital outflows since the middle of 2010. According to balance-of-payment data, on a cumulative basis by the end of the second quarter of 2011 foreign banking assets had reached $201 billion (12% of GDP). Of these, about $78 billion were parked in the EU: 34% in the U.K., 18% in Germany, 13% in Austria, and 13% in Cyprus. But interestingly, a good part of the increase in banks' foreign assets corresponds to loans made to Russian corporate borrowers. This is because many large Russian companies (and almost all of the publicly listed ones) have part of their holding structures registered in foreign jurisdictions for legal reasons.

According to VTB Capital, a Russian bank, offshore loans by Russian banks stood at $60 billion as of November 2011. Yet, this observation leads, in turn, to another: that large corporate entities borrow through their foreign entities but decline to repatriate those funds. If they did, it would offset the outflows in the capital account. More generally, this also shows that funds generated by Russian exports are not fully reinvested at home, which seems to reflect a perceived lack of investment opportunities in the domestic economy. Institutional limitations can be seen by investors as disincentives, as the central government continues to influence significantly infrastructure developments via the large state-owned companies. In addition, political uncertainties have increased in the past year as the presidential elections, due in March, were approaching, while more anti-government protests were taking place in Moscow.

Looking forward, it is difficult in our opinion to see what would slow this rise in capital outflows in 2012. The continued increase in net foreign assets could be compensated by higher external borrowing on the back of higher lending rates in the domestic economy. However, we only anticipate a very gradual return to financing conditions more favorable to borrowers on international capital markets. This is because we believe that the sovereign crisis in Europe and the associated hike in bond yields will take time to resolve. Meanwhile, political uncertainties at home will not necessarily disappear immediately after the presidential elections. There will still be many questions relative to the pace at which the new government will be ready to undertake structural reforms.

North Korea economy

2012-01-16T08:21:00.000-08:00

North Korea economy: The budget offers no hard numbers, yet again

May 25
– As usual, the main formal
business at the annual meeting on April 7th of the Supreme
People’s Assembly (SPA), North Korea’s rubber-stamp legislature,
was to hear economic and budget reports for 2010, and to approve
the budget for 2011. This was as opaque as ever, with a complete
absence of hard numbers. All that was given were a few
percentages, which–even if true–cannot be interpreted without a
baseline.

Until 2002 aggregate totals were published for public revenue and
expenditure, from which it was possible to calculate some
sectoral figures. However, this ceased from 2003, possibly
because it was difficult or embarrassing to deal with the
devaluation that had accompanied partial reform measures in July
2002. Even with such basic data withheld, North Korea will
neither attract serious foreign investment nor be eligible to
join the World Bank or the IMF. South Korean sources attempt to
fill in the blanks, apparently based on a single real figure
heard some years ago in a radio broadcast. The South’s Ministry
of Unification has put the North’s overall budget for 2011 at
Won567bn, which it equated to US$5.7bn–barely 2% of the South’s
budget of US$268bn for the year.

North Korea’s finance minister, Pak Su-gil, reported that in 2010
revenues were 7.7% higher than in 2009, and also 1.3% above their
planned level. Spending rose by 8.2% year on year and hit 99.9%
of the intended figure. By sector, light industry and agriculture
received allocations 10.9% and 9.4% larger, respectively, than in
2009. Science and technology increased by 8.1%, while
“implementation of the popular policies” (presumably social
services, perhaps including health and education, which were not
otherwise mentioned) received 6% more. Being less than the
average increase, this implies its share of total spending has
fallen.

In a particularly obscure phrase, Pak Su-gil added (as reported
by the KCNA) that spending on “the pilot domains of national
economy, basic industrial domains and capital construction last
year went up 8% and 12.9% respectively over [2009].” What look
like three terms here are presumably two: “the pilot domains of
national economy” are the same as “basic industrial domains”. In
North Korean parlance these sectors are the metal, power and coal
industries, and railway transport.

Confusingly, but in line with tradition, defence spending was
given on a different basis: as a proportion of total expenditure,
at 15.8%. This figure hardly varies from year to year–it is the
same for 2011, which would imply a 8.9% rise in defence spending.
Many observers suspect this is an understatement, with much
military spending hidden under other headings. In January South
Korea’s state-run Korea Institute of Defence Analyses (KIDA)
claimed that the North’s actual military spending in 2009 was
US$8.8bn, or 15 times the official figure of US$570m and
equivalent to one-third of its total gross national income. (The
KIDA figures are compiled on a different basis to that used by
the unification ministry.) Even this higher figure is less than
the South’s military expenditure.

The Northern finance minister’s projections for 2011 were also
obscure. Revenue is slated to increase by 7.5% year on year.
Again switching between different sorts of percentages, Pak
Su-gil said that 83.9% of the total will come from central
finances and 16.1% from local budgets. By sector, the bulk of
revenue–some 78.5%–will derive from transaction taxes and state
enterprise profits. Among lesser sources, “the profits of
co-operative organisations, the fixed-asset depreciation, the
income from real estate rent and social insurance are expected to
swell 3.8%, 1.4%, 0.7% and 0.4% respectively” compared with the
previous year.

The balance of planned spending by sector in 2011 differs
significantly from 2010, although again Pak Su-gil did not point
this out. Overall expenditure is set to rise by 8.9% year on
year. Light industry will get 12.9% more than in 2010 and “a huge
budgetary disbursement will be made for local industry, too”.
Agriculture will receive a 9% increase, and “funds needed for
farming will be provided on a priority basis”. Yet “pilot domains
and basic industries”, essentially comprising heavy industries,
are to get 13.5% more than in 2010. This is despite the fact
that, according to a prominent newspaper editorial earlier in the
year highlighting policy, light industry was supposed to be the
core priority this year.

As in 2010, the largest increase of all, of 15.1%, will be
provided to capital construction. Science and technology will get
10.1% more, to help reach the goals of a five-year plan for state
scientific and technological development, due to end in 2012. No
details of this plan are known; North Korea has announced none of
its economic plans publicly since the last seven-year plan ended
in 1993 with a rare admission that planned targets had not been
met.

In general, the finance minister urged “all domains and units of
the national economy to give full play to the mental power of the
producer masses, economise manpower, materials and funds and cut
down as much as possible non-productive expenditure and thus
carry out the monthly and quarterly plans for budgetary revenue
without fail”. The latter phrase hints at the existence of more
detailed figures, undisclosed publicly. The emphasis on
economising could also suggest tight fiscal constraints–as well
as an appeal to the Communist state’s philosophy of juche, or
self-reliance.

A speech to the legislature by the premier, Choe Yong-rim,
provided little extra background to the budget. Past premier
reports have sometimes given useful detail, if only
descriptively. This time the KCNA reported the premier in barely
100 words. His claims of “signal advances” and “big successes” in
2010 were greeted with scepticism by most external observers.

-0- May/25/2011

North Korea economy: The UN launches an emergency food programme
– On April 29th the UN
Children’s Fund (UNICEF) and the World Food Programme (WFP)
announced a one-year US$200m emergency plan. The scheme aims to
feed people affected by crop losses and a particularly bitter winter. It is unclear how this will be financed. UNICEF hadearlier reported that, having sought US$10m for its work in NorthKorea in 2010, it received only US$ 2m. Undaunted, it has launched a US$20m appeal to fund work in five provinces with the worst malnutrition rates, targeting 165,000 pregnant or breast-feeding women and 400,000 young children as the most vulnerable.The WFP seeks to provide 297,000 tonnes of grain plus 137,000 tonnes of fortified foods. This follows a month-long Rapid Food Security Assessment Mission conducted in February-March 2011 by the same agencies, together with the UN Food and Agriculture Organisation (FAO). The report, which was published in March, warned of the high risk of a food crisis. The state ration system, which provides barely more than one-half the average daily calorific requirement, is due to run out of food in May. In the lean season (May-July) over 6m people, or one-quarter of the population, may need food assistance.

The mission declared that in 2010/11 (November-October)
production of staple foods is likely to reach 4.3m tonnes–some
232,000 tonnes below the estimate made by an earlier mission in
late 2010, owing to the severity of the winter. It noted that the
amount of potato seed in winter storage that has been damaged is
higher than normal, and 2011 spring production will likely be 60%
of the planned level. Meanwhile, production of pickled vegetables
(kimchi) was affected by the heavy rains in August-September
2010. The mission concluded that North Korea would need to import
1.1m tonnes of cereal, but that officials plan to import only
200,000 tonnes at present.

Others are sceptical, for reasons that–despite official
denials–are hard to separate from the wider political stalemate
on the peninsula. The US is said to be mulling over assistance,
despite North Korea’s nuclear obstinacy. The main obstacle is
South Korea, whose hardline government summarily scrapped food
aid in 2008, even before the Northern attacks in 2010. The South
professes to doubt how bad the North’s situation really is,
claiming variously that it holds large grain stockpiles in case
of war, or wants to build up supplies so as to celebrate the
centenary of its founder Kim Il-sung next year with a show of
generosity by his son.

The FAO’s concerns are animal as well as human. On March 24th,
after a joint mission to North Korea with the World Organisation
for Animal Health (OIE), it said that vaccines and other
materials worth US$1m were urgently needed to help to combat
foot-and-mouth disease, which has struck eight out of 13
provinces. This is a modest sum compared with the disaster in
South Korea–a likely source of the North’s epidemic–where since
November 3.5m cattle and pigs have been culled, with losses of
US$2.6bn. Although the worst is now thought to be over, both
Koreas were still reporting fresh outbreaks in April.

The FAO added that North Korea’s veterinary services need
modernising, especially biosecurity measures and improving
laboratory infrastructure and capacity. It tallied the country’s
total livestock population at 577,000 cattle, 2.2m pigs and 3.5m
goats. The latter are an important source of dairy products,
while cattle, besides dairy use, are “a key source of draft
power”. The latter comment highlights how farming, once
mechanised, has regressed since access to cheap oil ended with
the collapse of the former Soviet Union. Meat is now a rarity in
North Koreans’ diets, reserved only for special occasions.

-0- May/25/2011

North Korea economy: Trade with China and South Korea rose in 2010

— The Korea International
Trade Association (KITA), a private-sector body based in the
South Korean capital, Seoul, in March published a comparison of
North Korea’s aggregate trade in 2010 with China and South Korea.
The North’s two main trading partners together make up at least
80% of the country’s total trade.

Unsurprisingly, given inter-Korean tensions in 2010, China pulled
ahead both in relative and absolute terms. Its trade with North
Korea in 2010 totalled US$3.5bn, representing a year-on-year
increase of 32%. Less expectedly, inter-Korean trade rose too,
albeit by a slower 14%, to a record US$1.9bn.

South Korea supposedly barred trade with the North in May 2010
after the Cheonan sinking, but it exempted the Kaesong Industrial
Complex (KIC), a zone in the North in which many Southern
companies operate. Exchanges involving the KIC (mainly raw
materials and equipment going in, and finished goods coming out)
soared by 53.4% from 2009, to US$1.4bn. Non-KIC inter-Korean
trade did, however, fall by 54%, to US$117.8m.

As an organization of South Korean exporters, KITA is concerned
about competition with China for the Northern market. The South
had previously been the North’s main export market, and in 2007
inter-Korean trade reached 91% of the Sion-North Korean total.
However, since 2008, when the conservative Lee Myung-bak became
South Korea’s president, the proportion has slipped, falling to
55% of Sion-North Korean trade in 2010.

KITA’s data are backed up by figures from World Trade Search
(WTS), a Japan-based firm which tracks North Korea’s trade.
According to its statistics, North Korea’s US$3.46bn total trade
with China in 2010 was, as ever, unbalanced. Imports from China
reached US$2.3bn, compared with exports to that country of just
US$1.2bn. However, exports accelerated from just US$341m in the
first half of the year to US$840m in the second. Imports showed a
similar but less marked trend, expanding from US$939m in
JanuaryJune to US$1.3bn in JulyDecember. This probably reflects a
sharp pick-up in commodity prices in 2010, which may have
affected the value of Northern imports of oil and its exports of
iron ore and coal. WTS figures show that North Korea exported
goods worth US$1bn to the South in 2010, against imports of
US$866m.

Chinese government data indicate that the North’s trade with
China continues to expand massively. China’s imports from North
Korea in the first quarter of 2011, at US$401.5m, were over three
times the level in the year-earlier period (US$126.2m). The rise
appears largely owing to soaring coal exports, although iron ore
exports were also substantially higher. China’s exports to the
North were also up by 59.3% year on year in the period, to
US$571.2m.

Switzerland Economy

2012-01-05T11:43:00.000-08:00

Sometimes I like to dream of Switzerland as being a little island of exceptionalism in the world, but alas, the morning alarm bell is unforgiving. Despite prospects of a gold currency or taking a leadership position in criticizing ridiculous US tax policies, we must remember that Swiss fiscal and financial culture is anything but “neutral” or independent, as their international politics are known to be. In fact, the educational qualifications of the Swiss financial and government elite, as well as their close relations with international counterparts, just about guarantees a similar tainting of economic thinking with Keynesianism.

Switzerland's economy over all going very good. From starting its GDP is going not well but now a days it is going very well. About 2009 it is going to downward. Q! and Q3 shows the negative slope of real GDP. But in 2010 and 2011 real GDP going upward 10Q1,10Q3 and 11Q1,11Q3 show the positive slope.

New Zealand GDP Growth Rate

2012-01-03T02:55:00.000-08:00

The Gross Domestic Product (GDP) in New Zealand expanded 0.80 percent in the third quarter of 2011 over the previous quarter. Historically, from 1987 until 2011, New Zealand's average quarterly GDP Growth was 0.56 percent reaching an historical high of 2.70 percent in September of 1999 and a record low of -2.60 percent in March of 1991. Over the past 20 years the government has transformed New Zealand from an agrarian economy dependent on concessionary British market access to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes - but left behind some at the bottom of the ladder - and broadened and deepened the technological capabilities of the industrial sector. This page includes: New Zealand GDP Growth Rate chart, historical data, forecasts and news. Data is also available for New Zealand GDP Annual Growth Rate, which measures growth over a full economic year.

New Zealand GDP Up 0.8% in Q3
New Zealand Gross domestic product was up 0.8 percent in the September 2011 quarter, following a 0.1 percent increase in the June 2011 quarter. The increase in the latest quarter is the fourth consecutive quarter of growth following a decline of 0.1 percent in the September 2010 quarter.

In the September 2011 quarter, the increase in economic activity was due to rises of 0.5 percent in the services industries, 0.8 percent in the goods-producing industries, and 0.5 percent in the primary industries.

The main movements by industry this quarter were: manufacturing (up 2.3 percent) – food, beverage, and tobacco manufacturing was the largest contributor; retail, accommodation, and restaurants (up 2.5 percent) – the largest quarterly increase since the March 2007 quarter; finance, insurance, and business services (up 0.6 percent) – the fourth consecutive quarter of growth; construction (down 2.2 percent) – now at its lowest quarterly level since the June 2002 quarter.

The expenditure measure of GDP rose 1.0 percent in the September 2011 quarter. The expenditure and production measures of GDP are conceptually the same. The production measure of GDP measures the volume of goods and services produced in the economy, while the expenditure measure shows how those goods and services were used.

Economic activity for the year ended September 2011 was up 1.3 percent when compared with the year ended September 2010. Expenditure on GDP for the year ended September 2011 was up 1.4 percent when compared with the previous year.

GDP Growth Definition

Economic growth is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.As economic growth is measured as the annual percent change of National Income it has all the advantages and drawbacks of that level variable. But people tend to attach a particular value to the annual percentage change, perhaps since it tells them what happens to their pay check.

The real GDP per capita of an economy is often used as an indicator of the average standard of living of individuals in that country, and economic growth is therefore often seen as indicating an increase in the average standard of living.However, there are some problems in using growth in GDP per capita to measure general well being.GDP per capita does not provide any information relevant to the distribution of income in a country. GDP per capita does not take into account negative externalities from pollution consequent to economic growth. Thus, the amount of growth may be overstated once we take pollution into account. GDP per capita does not take into account positive externalities that may result from services such as education and health. GDP per capita excludes the value of all the activities that take place outside of the market place (such as cost-free leisure activities like hiking).

Economists are well aware of these deficiencies in GDP, thus, it should always be viewed merely as an indicator and not an absolute scale. Economists have developed mathematical tools to measure inequality, such as the Gini Coefficient. There are also alternate ways of measurement that consider the negative externalities that may result from pollution and resource depletion (see Green Gross Domestic Product.)The flaws of GDP may be important when studying public policy, however, for the purposes of economic growth in the long run it tends to be a very good indicator. There is no other indicator in economics which is as universal or as widely accepted as the GDP.Economic growth is exponential, where the exponent is determined by the PPP annual GDP growth rate. Thus, the differences in the annual growth from country A to country B will multiply up over the years. For example, a growth rate of 5% seems similar to 3%, but over two decades, the first economy would have grown by 165%, the second only by 80%

Economic Outlook : Turkey

2012-01-02T03:19:00.000-08:00

The Turkish economy has shown remarkable performance with its steady growth over the last eight years. A sound macroeconomic strategy in combination with prudent fiscal policies and major structural reforms in effect since 2002, has integrated the Turkish economy into the globalized world, while transforming the country into one of the major recipients of FDI in its region.

The structural reforms, hastened by Turkey’s EU accession process, have paved the way for comprehensive changes in a number of areas. The main objectives of these efforts were to increase the role of the private sector in the Turkish economy, to enhance the efficiency and resiliency of the financial sector, and to place the social security system on a more solid foundation. As these reforms have strengthened the macroeconomic fundamentals of the country, inflation drastically decreased to 6.4 percent by the end of 2010, down from 30 percent in 2002, while the EU-defined general government nominal debt stock fell to 41.6 percent from 74 percent in a period of eight years between 2002 and 2010. Hence, Turkey has been meeting the “60 percent-EU Maastricht criteria” for the public debt stock since 2004.

As the GDP levels more than tripled to USD 736 billion in 2010, up from USD 231 billion in 2002, GDP per capita soared to USD 10,079, up from USD 3,500 in the given period.

The visible improvements in the Turkish economy have also boosted foreign trade, while exports reached USD 114 billion by the end of 2010, up from USD 36 billion in 2002. Similarly, tourism revenues, which were around USD 8.5 billion in 2002, exceeded USD 20 billion in 2010.

Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy, the 16th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures (at PPP) in 2010.

Prior to the recent global recession which hit all economies throughout the world, the Turkish economy sustained strong economic growth for 27 quarters consecutively, making it one of the fastest growing economies in Europe. However, the global financial crisis has considerably challenged the macroeconomic and financial stability of many economies by adversely affecting financing facilities and external demand, thus causing a significant slowdown in all global economic activities.

While the financial markets in Turkey proved resilient to the crisis, the decrease in external demand and slowing international capital flows have had a negative impact on the economy, thus causing an economic contraction in 2009. However, the perceived positive developments in the economy showed signs of a fast recovery beginning as early as the last quarter of 2009, with an impressive 5.9 percent economic growth rate, hence making Turkey one of the fastest recovering economies in the world. Its robust economic growth continued in 2010 as well, having reached 12 percent, 10.3 percent, 5.2 percent and 9.2 percent in the first, second, third and fourth quarters of 2010 respectively, thus achieving an overall growth rate of 8.9 percent throughout 2010. Turkey, with such a robust economic performance, stood out as the fastest growing economy in Europe and one of the fastest growing economies in the world.

2010 Real GDP Growth (%)

Source: IMF World Economic Outlook April 2011, Turkish Statistical Institute (TurkStat)

Moreover, according to the OECD, Turkey is expected to be the fastest growing economy of the OECD members during 2011-2017, with an annual average growth rate of 6.7 percent.

Annual Average Real GDP Growth (%) Forecast in

OECD Countries 2011-2017

Source: OECD Economic Outlook No: 86

Institutionalized economy fueled by USD 94 billion of FDI in the past eight years and ranked the 15th most attractive FDI destination for 2008-2010 (UNCTAD).
16th largest economy in the world and 6th largest economy compared with EU countries in 2010 (GDP at PPP, IMF-WEO).
Robust economic growth over the last seven years with an average annual real GDP growth of 4 percent.
GDP reached USD 736 billion in 2010, up from USD 231 billion in 2002.
Sound economic policies with tight fiscal discipline.
Strong financial structure resilient to the global financial crisis.
Rapid recovery from the global financial crisis.

economy and trade : Argentina

2012-01-02T02:38:00.000-08:00

Primary Industry
Argentina is rich in natural resources with a geological and climatic situation particularly suitable for developing forestry, agriculture, mining and fisheries. It also boasts of large petroleum, gas and uranium reserves.
Agriculture: Argentina is famous for its agricultural production. With over 54 million head of cattle, Argentina’s beef is renowned around the world. Annual production of cereals and oilseeds exceeds 70 million tonnes, which makes Argentina one of the main exporters of these products and their derivatives. One of the country's largest sheep grazing regions, which is also one of the largest regions for growing fruit and vegetables, is found in Patagonia, in the south. The typical farms associated with this production are surprisingly similar to those found in Australia.
Mendoza on the western border is the centre of wine production. Argentina is the worlds fifth-largest producer of wine. Most Argentineans drink wine with every meal, a traditional custom introduced by the European immigration. Exports are continually growing,
Mining: The Andean Mountains provide Argentina with rich mineral deposits. Some of the minerals which are being mined at present are, copper, tin, lead, zinc, gold, silver, and uranium. The main exploitation of copper and gold, Minera de la Alumbrera, in the Province of Catamarca, is an Australian venture.
Gas and Oil: are important resources being increasingly exported to the neighbouring countries and to the world market. Together with mining products they make out for 15% of total exports.
Manufacturing Sector
The industrial sector includes manufacturing and construction. Among Argentina’s manufactured goods are processed food, textiles, clothing, metallic and non-metallic mineral products, wood products, paper, pharmaceutical products, chemicals and petrochemical products, aluminium, steel, cars, electrical machinery and appliances, machine tools, turbines, cranes, agriculture machinery, and space and nuclear products.
Construction, engineering and consultancy activities have developed to an important stage, extending to the Latin-American market and other countries.
Transport
Land: Public transport includes buses, railways and subways. Most of Argentina's goods are transported by truck although railways are becoming increasingly important in the transportation of domestic cargo.
Air: The most widely-known national airline is Aerolineas Argentinas which has been operating for more than 60 years. It covers nearly all the domestic routes and has also an important continental and inter-continental network. There are also other private airlines that have been growing in recent years. Aerolineas Argentinas offers three direct flights a week between Sydney and Buenos Aires, with a short stopover in Auckland, New Zealand.
Water: There are numerous coastal and international ocean and river companies that offer freight or passenger transport. Several Ocean Lines serve the route between Australian and Argentinean ports.
Communications
Postal and telecommunications services are run by private enterprises which have been operating in free competition since the beginning of 2000. The first post office opened in 1814. Satellite tracking stations and digital technology provide domestic and international telephone communications linked to every country in the world. There are about 40 television stations and 200 radio stations in Argentina.
Export
Argentina's exports, which reached 30 billion $US in 2003, are composed of 24% primary agricultural commodities, 13% fuels and minerals, 36% processed agricultural products and foodstuffs, and 27% industrial products.

Global financial crisis

2011-09-29T23:48:00.000-07:00

A trader at the New York stock exchange. The last four years have seen five key stages of the global financial crisis, with more likely to come.

9 August 2007. 15 September 2008. 2 April 2009. 9 May 2010. 5 August 2011. From sub-prime to downgrade, the five stages of the most serious crisis to hit the global economy since the Great Depression can be found in those dates.

Phase one on 9 August 2007 began with the seizure in the banking system precipitated by BNP Paribas announcing that it was ceasing activity in three hedge funds that specialized in US mortgage debt. This was the moment it became clear that there were tens of trillions of dollars worth of dodgy derivatives swilling round which were worth a lot less than the bankers had previously imagined.

Nobody knew how big the losses were or how great the exposure of individual banks actually was, so trust evaporated overnight and banks stopped doing business with each other.

It took a year for the financial crisis to come to a head but it did so on 15 September 2008 when the US government allowed the investment bank Lehman Brothers to go bankrupt. Up to that point, it had been assumed that governments would always step in to bail out any bank that got into serious trouble: the US had done so by finding a buyer for Bear Stearn while the UK had nationalized Northern Rock.

When Lehman Brothers went down, the notion that all banks were "too big to fail" no longer held true, with the result that every bank was deemed to be risky. Within a month, the threat of a domino effect through the global financial system forced western governments to inject vast sums of capital into their banks to prevent them collapsing. The banks were rescued in the nick of time, but it was too late to prevent the global economy from going into free fall. Credit flows to the private sector were choked off at the same time as consumer and business confidence collapsed. All this came after a period when high oil prices had persuaded central banks that the priority was to keep interest rates high as a bulwark against inflation rather than to cut them in anticipation of the financial crisis spreading to the real economy.

The winter of 2008-09 saw co-ordinates action by the newly formed G20group of developed and developing nations in an attempt to prevent recession turning into a slump. Interest rates were cut to the bone, fiscal stimulus packages of varying sizes announced, and electronic money created through quantitative easing. At the London G20 summit on 2 April 2009, world leaders committed themselves to a $5tn (£3tn) fiscal expansion, an extra $1.1tn of resources to help the International Monetary Fund and other global institutions boost jobs and growth, and to reform of the banks. From this point, when the global economy was on the turn, international co-operation started to disintegrate as individual countries pursued their own agendas.

9 May 2010 marked the point at which the focus of concern switched from the private sector to the public sector. By the time the IMF and theEuropean Union announced they would provide financial help to Greece, the issue was no longer the solvency of banks but the solvency of governments. Budget deficits had ballooned during the recession, mainly as a result of lower tax receipts and higher non-discretionary welfare spending, but also because of the fiscal packages announced in the winter of 2008-09. Greece had unique problems as it covered up the dire state of its public finances and had difficulties in collecting taxes, but other countries started to become nervous about the size of their budget deficits. Austerity became the new watchword, affecting policy decisions in the UK, the eurozone and, most recently in the US, the country that stuck with expansionary fiscal policy the longest.

Last Friday, the morphing of a private debt crisis into a sovereign debt crisis was complete when the rating agency, S&P, waited for Wall Street to shut up shop for the weekend before announcing that America's debt would no longer be classed as top-notch triple A. This could hardly have come at a worse time, and not just because last week saw the biggest sell-off in stock markets since late 2008. Policymakers are confronted with a slowing global economy and a systemic crisis in one of its component parts, Europe. To the extent that they are united, they are united in stupidity, wedded to blanket austerity that will make matters worse not better. And they have yet to tackle the issue that lay behind the 2007 crisis in the first place, the imbalances between the big creditor nations such as China and Germany, and big debtors like the US.

In the circumstances, it is hard to be wildly optimistic about how events will play out. Markets are bound to remain highly jittery, although it seems unlikely that American bond yields will rocket as a result of the S&P downgrade. Japan lost its triple A rating long ago and has national debt well in excess of 200% of GDP but its bond yields remain extremely low. The reason for that is simple: Japan's growth prospects are poor.

So are America's, which is why bond yields will remain low in what is still, for the time being, the world's biggest economy. The dressing down given to Washington by Beijing following the S&P announcement was, however, telling. Growth rates of close to 10% mean that the moment China overtakes the US is getting closer all the time, and the communists in the east now feel bold enough to tell the capitalists in the west how to run their economies. Whatever it means for financial markets this week, 5 August 2011 will be remembered as the day when US hegemony was lost.

All this is terrible news for Barack Obama. He has not delivered economic recovery. The US is drowning in negative equity and foreclosed homes. No president since Roosevelt has won an election with unemployment as high as it is today. Fiscal policy will be tightened over the coming months as tax breaks expire and public spending is cut. The Federal Reserve only has the blunt instrument of QE with which to stimulate the economy, and will only be able to deploy it after a softening up process for the markets that will take several months. On top of that, Obama will now be branded as the president who presided over the national humiliation of a debt downgrade. He looks more like Jimmy Carter than FDR.

Not that the Europeans should get too smug about this, because what we are witnessing is not just the decline of the US but the decline of the west. One response to last week's meltdown was the announcement of talks between the G7 – the US, the UK, Germany, Italy, France, Canada and Japan – but while this would have been appropriate 20 years ago it is not going to calm markets today. Holding a G7 meeting without China today is like expecting the League of Nations without the US to tackle totalitarianism in the 1930s.

There is no happy ending to this story. At best there will be a long period of weak growth and high unemployment as individuals and banks pay down the excessive levels of debt accumulated in the bubble years. At worst, the global economy will be plunged back into recession next year as the US goes backwards and the euro comes apart at the seams. The second, gloomier scenario, looks a lot more likely now than it did a week ago.

Why? Because there is no international co-operation. There are plans for austerity but no plans for growth. Even countries that could borrow money for fiscal stimulus packages reluctant to do so. Europe lacks the political will to force the pace of integration necessary to avoid disintegration of the single currency.

Commodity prices are coming down, but that is the only good news. We are less than halfway through the crisis that began on 9 August 2007. That crisis has just entered a dangerous new phase.

Russian Federation economic review

2011-09-27T06:45:00.000-07:00

The Russian economy underwent tremendous stress in the 1990s as it moved from a centrally planned economy to a free market system. Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short-term borrowing to finance budget deficits led to a serious financial crisis in 1998. Lower prices for Russia's major export earners (oil and minerals) and a loss of investor confidence due to the Asian financial crisis exacerbated financial problems. The result was a rapid and steep decline (60%) in the value of the ruble, flight of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions through the banking system, and the threat of runaway inflation.

The Russian economy bounced back quickly from the 1998 crisis and enjoyed over 9 years of sustained growth averaging about 7% due to a devalued ruble, implementation of key economic reforms (tax, banking, labor and land codes), tight fiscal policy, and favorable commodities prices. Household consumption and fixed capital investments both grew by about 10% per year during this period and replaced net exports as the main drivers of demand. Inflation and exchange rates stabilized due to a prudent fiscal policy (Russia ran a budget surplus from 2001-2008). Foreign exchange reserves grew to almost $600 billion by mid-2008, the third-largest in the world, of which more than $200 billion were classified as stabilization funds designed to shelter the budget from commodity price shocks. The balance of payments experienced twin surpluses until mid-2008 in the current and capital accounts, which accounted for the phenomenal growth of reserves. As of July 1, 2006, the ruble became convertible for both current and capital transactions. Russia repaid its entire Soviet-era Paris Club debt of $22 billion in late 2006, but by October 2008 foreign external debt totaled $540 billion, of which $500 billion was owed by banks and corporations, including state-owned enterprises.

The global economic crisis hit Russia hard, starting with heavy capital flight in September 2008, which caused a crisis in its stock market. Several high-profile business disputes earlier in 2008, such as TNK-BP and Mechel, as well as the Georgian war helped drive capital out of Russia. By mid-September, Russia’s stock market had collapsed, as businesses sold shares to raise collateral for margin calls required by international lending institutions. As the global financial crisis gathered steam in the fall of 2008, the accompanying steep fall in global demand, commodity prices, and tightening of credit served to almost bring Russia’s economic growth to a halt in the fourth quarter of 2008, to 1.1% down from 9.5% during the same period in 2007. The Central Bank of Russia responded by pumping liquidity into Russian banks, which helped avert a banking crisis. At the same time, the government attempted a managed devaluation, which successfully avoided a run on the ruble and bank deposits but at the cost of a steep decline in foreign exchange reserves to $387 billion by mid-February 2009. This in turn prompted the S&P and Fitch rating agencies to downgrade Russia’s sovereign debt to the lowest investment grade. By 2010, however, the Russian economy had begun a modest recovery, bolstered by government anti-crisis policies, the global rebound, and a rise in oil prices. Russia’s leaders put renewed emphasis on promoting innovation as key to economic modernization as well as on the need to diversify the economy away from oil and gas.

Gross Domestic Product
Tighter credit, collapsing global demand, global uncertainty, and rising unemployment hurt investment and consumption, and led Russia to have -7.9% GDP growth in 2009--a sharp contrast to the pre-crisis performance of 8.1% in 2007. However, 2010 saw Russia’s economy return to growth with a 3.8% increase in GDP. Russia’s Economic Development Ministry predicts that the nation’s GDP will grow 4.2% in 2011.

Monetary Policy
For most of the past decade, Russia experienced persistent inflation, gradually declining from 85% in late 1998 to 9% by end-2006. However, a combination of surging international food and energy prices and looser monetary and fiscal policy pushed the Consumer Price Index (CPI) to 11.9% by the end of 2007, and up to 15% in early 2008. The Central Bank of Russia (CBR) monetary policy tended to be limited to managing the ruble’s exchange rate against a bi-currency basket of dollars and euros. The CBR intervened to keep the ruble stable during times of volatile international commodity prices and to manage inflation. In years of record high oil prices, the Central Bank typically purchased dollars to prevent real appreciation of the ruble. These interventions initially had limited effect on inflation, as they were mostly sterilized by budget surpluses and demand for rubles grew in a robust era of economic growth. By 2007, fiscal policy and the balance of payments were the actual drivers of monetary policy, particularly as large capital inflows due to increased borrowing by Russian banks and corporations caused the money supply to swell and added to inflationary pressures. Inflationary pressures eased in late 2008 as energy and commodity prices collapsed and international credit flows virtually stopped, causing money supply growth to halt. Inflation decelerated in 2009 to about 8.9% compared with 13.3% the previous year, owing to residual effects of the economic downturn, and continued to fall to 6.7% in 2010. Some forecasters predict this inflation rate will remain throughout 2011, though others believe the accelerated inflation Russia experienced in the first 2 months of the year could persist, leading to inflation in the 9%-10% range during the first half of 2011.

Government Spending/Taxation
The Russian federal budget ran growing surpluses from 2001-2007, as the government taxed and saved much of the rapidly increasing oil revenues. The government overhauled its tax system for both corporations and individuals in 2000-2001, introducing a 13% flat tax for individuals and a unified tax for corporations, which improved overall collection. Responding to demands from the oil sector, the government reduced the tax burden on oil production and exports, but only marginally. Tax enforcement of disputes continues to be uneven and unpredictable. In 2007 the federal budget surplus was 5.5% of GDP, and in 2008 the government ended the year with a surplus of 4.1% of GDP. Although the government revised its budget projections during 2009 to reflect lower oil prices and the effects of the economic crisis, it ended the year with a budget deficit amounting to 7.9% of GDP, which it financed from the Reserve Fund, one of the government’s two stabilization funds. The government’s anti-crisis package in 2008 and 2009 amounted to about 6.7% of GDP, according to World Bank estimates. The package provided support to the financial sector and enterprises--through liquidity injections to banks and tax cuts/fiscal support to enterprises--as well as modest support for households and small and medium enterprises (SMEs) and increased unemployment benefits. By the end of 2010, due to improving economic conditions, Russia had lowered its budget deficit to 3.9% of GDP. The government hoped to lower it to 3.6% in 2011 and admitted that deficits may be in place through 2015 and beyond.

Population
Russia's population was 139.39 million as of July 2010, a decrease from the previous year according to the government statistics service and the Ministry of Public Health. The birth rate in 2010 was 11.11 live births for every 1,000 people, a statistic which ranked Russia 176th out of 224 countries. Life expectancy remains low compared to developed countries, averaging 59.54 years for men and 73.17 years for women in 2010. Cardiovascular diseases, cancer, traffic accidents, and violence continue to be major causes of death among working age men. Many premature deaths are attributed to excessive alcohol consumption and smoking. A truly healthy Russia will require serious improvements in the health sector and some major changes in current cultural norms. To combat the looming demographic crisis, in October 2007 then-President Putin approved the concept of demographic policy for the years 2008-2025. The program aims to increase life expectancy, reduce mortality, increase the birth rate, improve the population's health, and develop a sound migration policy. The government instituted the National Priority Health Project and "mother's capital" in order to slow the population decline. These programs had short-term success; Russia's population declined by 0.25% in 2008, compared to 0.4% in 2007. It is unknown if such programs offer a long-term solution. Russian statistics show a slight increase in the population in 2009; inward migration is the primary cause. In April 2008, the government approved joining the World Health Organization's Framework Convention on Tobacco Control, which is expected eventually to reduce extremely high smoking rates, and the government put significant amounts of money into prevention of smoking and alcohol abuse in the 2009-2011 budget.

HIV/AIDS
As of the end of October 2009, there were 516,167 HIV cases officially registered in Russia, though some experts believe the actual number may be as many as 1 million HIV cases. According to UNAIDS, 60,000 new HIV cases were documented in Russia in 2009, an 8% increase from 2008. The prevalence of HIV cases was 300 per 100,000 people in 2008, higher than the 2007 indicator of 270.1 per 100,000. The chief form of transmission continues to be intravenous drug use, which accounted for over 60% of new HIV cases in 2009; among HIV-positive injecting drug users, about 85%-90% are Hepatitis C positive. More than 44% of new HIV cases are identified in females, and transmission through heterosexual sex has grown rapidly. The Government of Russia implements HIV treatment and prevention programs through its National Priority Health Project, Federal Targeted Program, and Global Fund Grants. The government currently spends over $250 million per year on HIV/AIDS treatment programs and allocated over $42 million for the period of 2007-2010 to support HIV/AIDS vaccine research. Approximately 68,000 patients are receiving antiretroviral therapy, and the government hopes that number will exceed 100,000 patients by 2012. Russia and the United States cooperate closely to fight HIV/AIDS, including in third countries. For instance, American and Russian experts have collaborated to develop and introduce in Russian medical schools a new curriculum on HIV infection. The materials, which are based on national and international experience, standards and best practices, will be used to train the estimated 25,000 foreign students that attend Russian medical schools each year.

Commercial Law
Russia has a body of conflicting, overlapping and rapidly changing laws, decrees and regulations, which has resulted in an ad hoc and unpredictable approach to doing business. In this environment, negotiations and contracts from commercial transactions are complex and protracted. Uneven implementation of laws creates further complications. Regional and local courts are often subject to political pressure, and corruption is widespread. However, more and more small and medium businesses in recent years have reported fewer difficulties in this regard, especially in the Moscow region. In addition, Russian businesses are increasingly turning to the courts to resolve disputes. Russia's World Trade Organization (WTO) accession process is also helping to bring the country's legal and regulatory regime in line with internationally accepted practices.

Natural Resources
The mineral-rich Ural Mountains and the vast oil, gas, coal, and timber reserves of Siberia and the Russian Far East make Russia rich in natural resources. However, most resources are located in remote and climatically unfavorable areas that are difficult to develop and far from Russian ports. Nevertheless, Russia is a leading producer and exporter of minerals, gold, and all major fuels. Natural resources, especially energy, dominate Russian exports. Over two-thirds of Russian exports to the United States are fuels, mineral oil, or metals.

Industry
Russia is one of the most industrialized of the former Soviet republics. However, years of very low investment have left much of Russian industry antiquated and highly inefficient. Besides its resource-based industries, it has developed large manufacturing capacities, notably in metals, food products, and transport equipment. Russia is now the world's third-largest exporter of steel and primary aluminum. Russia inherited most of the defense industrial base of the Soviet Union, so armaments remain an important export category for Russia. Efforts have been made with varying success over the past few years to convert defense industries to civilian use, and the Russian Government is engaged in an ongoing process to privatize many of the state-owned enterprises.

Agriculture
Russia has relatively little area for agriculture, but given its massive expanses, the country still accounts for about 9% of the world's arable land. Grain production for export is concentrated in the south of European Russia, with additional grain for domestic consumption grown throughout the rest of non-Arctic Russia west of the Urals as well as western Siberia. Livestock production was in decline from 1990 to 2006, when new government support policies were instituted to stimulate cattle and hog raising. Poultry production has rebounded and is rising at 17% per year. Small plots averaging one acre in size, urban and suburban gardens, and gardening cooperatives produce over half of Russia's food output. Former state and collective farms have been largely privatized, but management quality is uneven and profitability is highly dependent on proximity to major urban markets. Foreigners are not allowed to own farmland, although long-term leases are permitted.

Investment/Banking
Foreign direct investment (FDI) in 2009 fell to less than $40 billion after reaching an all-time high of $75 billion in 2008. Much of the FDI in recent years was Russian capital “returning home,” from havens like Cyprus and Gibraltar, and these flows reversed during the economic downturn. Moreover, although the annual flow of FDI into Russia was in line with those of China, India, and Brazil, Russia's per capita cumulative FDI lagged far behind such countries as Hungary, Poland, and the Czech Republic. Most foreign mergers and acquisitions in 2009 were in the politically sensitive energy sector, largely because of the huge capital requirements required relative to other sectors. By the end of 2010, analysts predicted that the total FDI for the year would again top $40 billion, but not reach the levels seen in 2008.

Although still small by international standards, the Russian banking sector before the crisis was growing fast and becoming a larger source of investment funds. To meet a growing demand for loans, which they were unable to cover with domestic deposits, Russian banks borrowed heavily abroad in 2007-2008, accounting for 57% of the private-sector capital inflows in 2007. Ruble lending has increased since the October 1998 financial crisis, and in 2007 loans were 66% of total bank assets, with consumer loans posting the fastest growth at 57% that same year. In 2004, Russia enacted a deposit insurance law to protect deposits up to 100,000 rubles (about $3,700) per depositor. Amendments to the law in the fall of 2008 increased the Deposit Insurance Agency's 100%-coverage for deposits up to 700,000 rubles. The vast majority of Russians keep their money in the banking sector. The combination of liberalized capital controls and ruble appreciation against the dollar in 2005-2008 persuaded many Russians to keep their money in ruble- or other currency-denominated bank deposits. In 2007, total retail deposits grew by 35%, with foreign currency deposits accounting for 13% of the total. Despite the onset of the crisis, deposits rose by 14% in 2008 and 27% in 2009.

Even with the banking sector’s recent growth, financial intermediation in the overall economy remains underdeveloped. Contradictory regulations across the banking and securities markets have hindered efforts to transfer resources from capital-rich sectors, such as energy, to capital-poor sectors, such as agriculture and manufacturing. The sector is dominated by large state banks, and concentrated geographically in Moscow and the Moscow region. Thus financial service providers face little competition for resources and charge relatively high interest rates for favored, large corporate borrowers.

This state of affairs makes it difficult for entrepreneurs to raise capital, and banks generally perceive small and medium commercial lending as risky. Most of the country’s financial institutions are inexperienced with assessing credit risk, though the situation is improving. The low level of trust, both between the general public and banks as well as among banks, makes the system highly susceptible to crises. After an uncertain year in 2009, by spring 2010 Russian officials announced an end to anti-crisis bank support, and a World Bank report said that “a systemic banking crisis had been averted, the liquidity crunch eased and depositor confidence reestablished.” The report cautioned, however, that systemic weaknesses exposed during the crisis--especially excessive dependence on foreign borrowing and non-performing loans--still needed to be addressed.

Trade
After hitting lows in 2009, trade between the U.S. and Russia grew to $31.7 billion in 2010, an increase of 35% from 2009. U.S. imports from Russia grew 41% year over year to $25.7 billion while exports to Russia increased just 13% to $6.0 billion. The rapid increase in U.S. imports from Russia from 2009 to 2010 can be attributed to the low base year and nascent economic recovery in the United States, but also to the rising price of oil and other commodities. Oil and oil products represent over two-thirds of the value of all U.S. imports from Russia. Russia is currently the 32nd-largest export market for U.S. goods. Russian exports to the U.S. were fuel oil, inorganic chemicals, aluminum, and precious stones. U.S. exports to Russia were machinery, vehicles, meat (mostly poultry), aircraft, electrical equipment, and high-tech products.

Russia's overall trade surplus in 2009 was approximately $100 billion--compared with $180 billion in 2008 and $129 billion in 2007--a reflection of the slower growth in exports and severe contraction of imports. World prices continue to have a major effect on export performance, since commodities--particularly oil, natural gas, metals, and timber--comprise nearly 90% of Russian exports. Russian GDP growth and the surplus/deficit in the Russian Federation state budget are closely linked to world oil prices.

Russia is in the process of negotiating terms of accession to the World Trade Organization (WTO). The U.S. and Russia concluded a bilateral WTO accession agreement in late 2006, and negotiations continue on meeting WTO requirements for accession. Both Prime Minister Vladimir Putin and the General Director of the WTO, Pascal Lamy, stated in early 2011 that they felt Russia would join within the year.

According to the 2010 U.S. Trade Representative's National Trade Estimate, Russia continues to maintain a number of barriers with respect to imports, including tariffs and tariff-rate quotas; discriminatory and prohibitive charges and fees; and discriminatory licensing, registration, and certification regimes. Discussions continue within the context of Russia's WTO accession to eliminate these measures or modify them to be consistent with internationally accepted trade policy practices. Non-tariff barriers are frequently used to restrict foreign access to the market and are also a significant topic in Russia's WTO negotiations. In addition, Russia’s lax enforcement of intellectual property rights had led to large losses for U.S. audiovisual and other companies and is an ongoing irritant in U.S.-Russia trade relations. Russia continues to work to bring its technical regulations, including those related to product and food safety, into conformity with international standards.
.

GDP (2010): $1.477 trillion.
Growth rate (2010): 3.8%.
Natural resources: Petroleum, natural gas, timber, furs, precious and nonferrous metals.
Agriculture: Products--Grain, sugar beets, sunflower seeds, meat, dairy products.
Industry: Types--Complete range of manufactures: automobiles, trucks, trains, agricultural equipment, advanced aircraft, aerospace, machine and equipment products; mining and extractive industry; medical and scientific instruments; construction equipment.
Trade (2010): Exports--$376.7 billion: petroleum and petroleum products, natural gas, woods and wood products, metals, chemicals. Major markets--EU, CIS, China, Japan. Imports--$191.8 billion: machinery and equipment, chemicals, consumer goods, medicines, meat, sugar, semi-finished metal products. Major partners--EU, CIS, Japan, China, U.S. U.S. exports--$6.0 billion. Principal U.S. exports (2010)--oil/gas equipment, meat, motor vehicles and parts, aircraft, electrical machinery, automatic data processing machines and parts, medical equipment, plastics, cosmetics, and chemicals. U.S. imports--$25.7 billion. Principal U.S. imports (2010)--oil, chemicals (including fertilizer), radioactive materials, iron/steel, precious stones, nickel, aluminum, fish and crustaceans, alcoholic beverages, and base metals.

Ukraine economy overview

2011-09-25T23:04:00.000-07:00

Ukraine economy can be classified as developed economy, given its overall level of industrial and agricultural output. However, the economy of Ukraine suffered because of various weaknesses deriving from overcentralized command economy during Soviet period.

Ukraine economy past

Large and inefficient state-owned factories, enterprises and collective farms wasted resources and emphasized quantity over quality. Prices were arbitrarily set, and consumer goods were often in short supply. Excessive spending on the military hurt the civilian economy, while technological development lagged in the civilian sphere.

Ukraine market economy

For the last years Ukraine is moving to market economy, where the forces of supply and demand and private ownership guide the allocation of resources. The transition to market economy is politically and socially difficult because the populace must endure rising inflation, unemployment, and economic uncertainty before it experiences the long-term benefits of market economy.
In addition, Ukraine redefines its economic relations with Russia and other former Soviet republics. As a way of safeguarding its political independence and limiting its economic vulnerability, Ukraine has its own national currency, called the hryvnia, from 1992. The economic reforms also cut military production and convert military factories and technologies to benefit the civilian economy and the populace.

Ukraine economy real GDP dynamics 1998-2006

Ukraine economy consumer prices dynamics 1994-2006

Ukraine economy: Agriculture

Historically, Ukraine is well known for its agricultural production. Among its main agricultural products are sugar beets, wheat, meat, and dairy products. Other crops include barley, corn, rye, and tobacco.
Most Ukraine farms are very large state-owned farms of more than 8,000 acres (3,000 ha). Smaller private plots have historically been the most productive throughout the former Soviet Union, and their importance should grow in the future.

Ukraine economy: Resources

Ukraine mineral resources have played an important role in supporting Ukraine industrial development and in providing for its energy needs. During the 1980s nuclear power also became a significant source of electrical power, accounting for about 25% of Ukraine’s electricity.
The accident at Chernobyl power station in 1986, however, created strong opposition to nuclear power in Ukraine, and efforts are now being made to phase out reliance on nuclear energy.

Ukraine economy: Industries

Ukrainian major industries are metalworks, machine building, construction, chemicals, food, and light industry. Ukraine is a major producer of steel and iron. Ukraine accounted for 33% of Soviet steel and iron production. About one-third of its industrial manufacturing comes from machine-building sector, which produces tractors, machine tools, and mining equipment.
Transportation vehicles manufactured by Ukraine economy include cars, trucks, buses, railway cars, diesel locomotives, airplanes, and ships.
The chief output of Ukrainian chemical industry is fertilizer, while Ukrainian food industry is involved with sugar refining, meat packaging, food canning, and wine production. Among consumer goods produced are television sets, refrigerators, washing machines, and clothes.

Ukraine economy: Transportation system

Overall, Ukraine has a well-developed and diverse transportation system. Ukrainian railroad network is extensive and links major cities with industrial enterprises. Waterways such as Dnepr River and Black Sea and Azov sea, and their port cities, play an important role in shipping.
Ukrainian highway system comprises about 147,000 kilometers (91,000 miles) of paved roads. Ukrainian subway systems exist in Kiev and Kharkov. There are major airports near Kiev (at Boryspil), Kharkov and Odessa cities.

Ukraine economy: Export and Import

Ukrainian major exports include grain, sugar beets, coal, construction equipment, and select manufactured goods.
The primary Ukrainian import items are oil, natural gas, wood products, rubber, and consumer goods. Some of Ukraine major trading partners are Russia, Poland, USA, Hungary, Germany, France, and Iran. Ukraine is seeking to reduce its economic ties with Russia.

Ukraine economy export and import 1996-2006

Chile's Economy Profile

2011-09-25T00:48:00.000-07:00

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports account for more than one-fourth of GDP, with commodities making up some three-quarters of total exports. Copper alone provides one-third of government revenue. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the situation in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. In the years since then, growth has averaged 4% per year. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercuric, China, India, South Korea, and Mexico. Over the past seven years, foreign direct investment inflows have quadrupled to some $15 billion in 2010, but FDI had dropped to about $7 billion in 2009 in the face of diminished investment throughout the world. The Chilean government conducts a rule-based counter cyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and allowing deficit spending only during periods of low copper prices and growth. As of September 2008, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20 billion. Chile used $4 billion from this fund to finance a fiscal stimulus package to fend off recession. In December 2009, the OECD invited Chile to become a full member, after a two year period of compliance with organization mandates. The economy started to show signs of a rebound in the fourth quarter, 2009, and GDP grew more than 5% in 2010. The magnitude 8.8 earthquake that struck Chile in February 2010 was one of the top ten strongest earthquakes on record. It caused considerable damage near the epicenter, located about 70 miles from Concepcion - and about 200 miles southwest of Santiago.

GDP (purchasing power parity):

$260 billion (2010 est.)

country comparison to the world: 46

$246.9 billion (2009 est.)

$250.6 billion (2008 est.)

note: data are in 2010 US dollars

[see also: GDP (purchasing power parity) country ranks ]GDP (official exchange rate):

$199.2 billion (2009 est.)

[see also: GDP (official exchange rate) country ranks ]

GDP - real growth rate:

5.3% (2010 est.)

country comparison to the world: 47

-1.5% (2009 est.)

3.7% (2008 est.)

[see also: GDP - real growth rate country ranks ]GDP - per capita:

$15,500 (2010 est.)

country comparison to the world: 73

$14,900 (2009 est.)

$15,200 (2008 est.)

note: data are in 2010 US dollars

[see also: GDP - per capita country ranks ]GDP - composition by sector:

agriculture: 5.6%

[see also: GDP - composition by sector - agriculture country ranks ]

industry: 40.5%

[see also: GDP - composition by sector - industry country ranks ]

services: 53.9% (2008 est.)

[see also: GDP - composition by sector - services country ranks ]

Labor force:

7.58 million (2009 est.)

country comparison to the world: 61

[see also: Labor force country ranks ]

Labor force - by occupation:

agriculture: 13.2%

[see also: Labor force - by occupation - agriculture country ranks ]

industry: 23%

[see also: Labor force - by occupation - industry country ranks ]

services: 63.9% (2005)

[see also: Labor force - by occupation - services country ranks ]

Unemployment rate:

8.7% (2010 est.)

country comparison to the world: 100

9.6% (2009 est.)

[see also: Unemployment rate country ranks ]Population below poverty line:

18.2% (2005)

[see also: Population below poverty line country ranks ]

Household income or consumption by percentage share:

lowest 10%: 1.6%

[see also: Household income or consumption by percentage share - lowest 10% country ranks ]

highest 10%: 41.7% (2006)

[see also: Household income or consumption by percentage share - highest 10% country ranks ]

Distribution of family income - Gini index:

54.9 (2003)

country comparison to the world: 14

57.1 (2000)

[see also: Distribution of family income - Gini index country ranks ]Investment (gross fixed):

23.5% of GDP (2009 est.)

country comparison to the world: 52

[see also: Investment (gross fixed) country ranks ]

Budget:

revenues: $40.97 billion

[see also: Budget - revenues country ranks ]

expenditures: $45.07 billion (2009 est.)

[see also: Budget - expenditures country ranks ]

Public debt:

6.2% of GDP (2010 est.)

country comparison to the world: 126

6.1% of GDP (2009 est.)

[see also: Public debt country ranks ]Inflation rate (consumer prices):

1.7% (2010 est.)

country comparison to the world: 45

1.5% (2009 est.)

[see also: Inflation rate (consumer prices) country ranks ]Central bank discount rate:

0.5% (31 December 2009)

country comparison to the world: 52

8.25% (31 December 2008)

[see also: Central bank discount rate country ranks ]Commercial bank prime lending rate:

7.25% (31 December 2009 est.)

country comparison to the world: 60

13.26% (31 December 2008 est.)

[see also: Commercial bank prime lending rate country ranks ]Stock of narrow money:

$29.81 billion (31 December 2010 est)

$23.68 billion (31 December 2009 est)

[see also: Stock of narrow money country ranks ]Stock of broad money:

$160.3 billion (31 December 2009)

$127.5 billion (31 December 2008)

[see also: Stock of broad money country ranks ]Stock of domestic credit:

$153.6 billion (31 December 2010 est.)

country comparison to the world: 41

$133.7 billion (31 December 2009 est.)

[see also: Stock of domestic credit country ranks ]Market value of publicly traded shares:

$209.5 billion (31 December 2009)

country comparison to the world: 30

$132.4 billion (31 December 2008)

$212.9 billion (31 December 2007)

[see also: Market value of publicly traded shares country ranks ]Agriculture - products:

grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans; beef, poultry, wool; fish; timber

Industries:

copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles

Industrial production growth rate:

3.2% (2009 est.)

country comparison to the world: 97

[see also: Industrial production growth rate country ranks ]

Electricity - production:

60.6 billion kWh (2007 est.)

country comparison to the world: 41

[see also: Electricity - production country ranks ]

Electricity - consumption:

57.29 billion kWh (2007 est.)

country comparison to the world: 43

[see also: Electricity - consumption country ranks ]

Electricity - exports:

0 kWh (2008 est.)

[see also: Electricity - exports country ranks ]

Electricity - imports:

1.628 billion kWh (2007 est.)

[see also: Electricity - imports country ranks ]

Oil - production:

10,850 bbl/day (2009 est.)

country comparison to the world: 84

[see also: Oil - production country ranks ]

Oil - consumption:

277,000 bbl/day (2009 est.)

country comparison to the world: 47

[see also: Oil - consumption country ranks ]

Oil - exports:

49,250 bbl/day (2007 est.)

country comparison to the world: 80

[see also: Oil - exports country ranks ]

Oil - imports:

311,200 bbl/day (2007 est.)

country comparison to the world: 36

[see also: Oil - imports country ranks ]

Oil - proved reserves:

150 million bbl (1 January 2010 est.)

country comparison to the world: 63

[see also: Oil - proved reserves country ranks ]

Natural gas - production:

1.65 billion cu m (2008 est.)

country comparison to the world: 60

[see also: Natural gas - production country ranks ]

Natural gas - consumption:

2.34 billion cu m (2008 est.)

country comparison to the world: 79

[see also: Natural gas - consumption country ranks ]

Natural gas - exports:

0 cu m (2008 est.)

country comparison to the world: 189

[see also: Natural gas - exports country ranks ]

Natural gas - imports:

690 million cu m (2008 est.)

country comparison to the world: 58

[see also: Natural gas - imports country ranks ]

Natural gas - proved reserves:

97.97 billion cu m (1 January 2010 est.)

country comparison to the world: 53

[see also: Natural gas - proved reserves country ranks ]

Current account balance:

$1.033 billion (2010 est.)

country comparison to the world: 45

$4.217 billion (2009 est.)

[see also: Current account balance country ranks ]Exports:

$64.28 billion (2010 est.)

country comparison to the world: 45

$53.74 billion (2009 est.)

[see also: Exports country ranks ]Exports - commodities:

copper, fruit, fish products, paper and pulp, chemicals, wine

Exports - partners:

China 16.46%, US 11.31%, Japan 9.06%, South Korea 6.49%, Brazil 4.64%, Mexico 4.09% (2009)

Imports:

$54.23 billion (2010 est.)

country comparison to the world: 46

$39.75 billion (2009 est.)

[see also: Imports country ranks ]Imports - commodities:

petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas

Imports - partners:

US 21.77%, China 12.76%, Argentina 9.55%, Brazil 6.46%, South Korea 5.35% (2009)

Reserves of foreign exchange and gold:

$26.08 billion (31 December 2010 est.)

country comparison to the world: 37

$25.29 billion (31 December 2009 est.)

[see also: Reserves of foreign exchange and gold country ranks ]Debt - external:

$84.51 billion (31 December 2010 est.)

country comparison to the world: 40

$72.76 billion (31 December 2009 est.)

[see also: Debt - external country ranks ]Stock of direct foreign investment - at home:

$136.3 billion (31 December 2010 est.)

country comparison to the world: 26

$121.6 billion (31 December 2009 est.)

[see also: Stock of direct foreign investment - at home country ranks ]Stock of direct foreign investment - abroad:

$51.15 billion (31 December 2010 est.)

country comparison to the world: 33

$41.2 billion (31 December 2009 est.)

[see also: Stock of direct foreign investment - abroad country ranks ]Exchange rates:

Chilean pesos (CLP) per US dollar - 525.34 (2010), 560.86 (2009), 509.02 (2008), 526.25 (2007), 530.29 (2006)

Economy Of Ireland

2011-09-23T00:52:00.001-07:00

Ireland is a small, modern, trade-dependent economy. Ireland was among the initial group of 12 EU nations that began circulating the euro on 1 January 2002. GDP growth averaged 6% in 1995-2007, but economic activity has dropped sharply since the onset of the world financial crisis, with GDP falling by over 3% in 2008, nearly 8% in 2009, and 1% in 2010. Ireland entered into a recession in 2008 for the first time in more than a decade, with the subsequent collapse of its domestic property and construction markets. Property prices rose more rapidly in Ireland in the decade up to 2007 than in any other developed economy. Since their 2007 peak, average house prices have fallen 50%. In the wake of the collapse of the construction sector and the downturn in consumer spending and business investment, the export sector, dominated by foreign multinationals, has become a key component of Ireland's economy. Agriculture, once the most important sector, is now dwarfed by industry and services. In 2008 the COWEN government moved to guarantee all bank deposits, recapitalize the banking system, and establish partly-public venture capital funds in response to the country's economic downturn. In 2009, in continued efforts to stabilize the banking sector, the Irish Government established the National Asset Management Agency (NAMA) to acquire problem commercial property and development loans from Irish banks. Faced with sharply reduced revenues and a burgeoning budget deficit, the Irish Government introduced the first in a series of draconian budgets in 2009. In addition to across-the-board cuts in spending, the 2009 budget included wage reductions for all public servants. These measures were not sufficient. In 2010, the budget deficit reached 32.4% of GDP - the world's largest deficit, as a percentage of GDP - because of additional government support for the banking sector. In late 2010, the COWEN Government agreed to a $112 billion loan package from the EU and IMF to help Dublin further increase the capitalization of its banking sector and avoid defaulting on its sovereign debt. The government also initiated a four-year austerity plan to cut an additional $20 billion from its budget. A return to modest growth is expected in 2011.

GDP (purchasing power parity)

$172.3 billion (2010 est.)
$174.2 billion (2009 est.)
$188.4 billion (2008 est.)
note: data are in 2010 US dollars

GDP (official exchange rate)

$204.3 billion (2010 est.)

GDP - real growth rate

-1% (2010 est.)
-7.6% (2009 est.)
-3.5% (2008 est.)

GDP - per capita (PPP)

$37,300 (2010 est.)
$38,000 (2009 est.)
$41,700 (2008 est.)
note: data are in 2010 US dollars

GDP - composition by sector

agriculture: 2%
industry: 29%
services: 70% (2009 est.)

Population below poverty line

5.5% (2009 est.)

Labor force

2.14 million (2010 est.)

Labor force - by occupation

agriculture: 5%
industry: 20%
services: 76% (2010 est.)

Unemployment rate

13.6% (2010 est.)
12.4% (2009)

Household income or consumption by percentage share

lowest 10%: 2.9%
highest 10%: 27.2% (2000)

Distribution of family income - Gini index

29.3 (2009)
35.9 (1987)

Investment (gross fixed)

11.3% of GDP (2010 est.)

Budget

revenues: $70.66 billion
expenditures: $136.8 billion (2010 est.)

Taxes and other revenues

34.6% of GDP (2010 est.)

Budget surplus (+) or deficit (-)

-32.4% of GDP (2010 est.)

Public debt

96.7% of GDP (2010 est.)
65.6% of GDP (2009 est.)

Inflation rate (consumer prices)

-0.9% (2010 est.)
-4.5% (2009 est.)

Central bank discount rate

1.75% (31 December 2010)
1.75% (31 December 2009)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate

2.1% (31 December 2010 est.)
2.5% (31 December 2009 est.)

Stock of money

Stock of narrow money

$133.8 billion (31 December 2010 est.)
$145 billion (31 December 2009 est.)
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money

$248.6 billion (31 December 2010 est.)
$283.7 billion (31 December 2009 est.)

Stock of quasi money

$NA

Stock of domestic credit

$745.7 billion (31 December 2009 est.)
$738.5 billion (31 December 2008 est.)

Market value of publicly traded shares

$63.1 billion (31 December 2010)
$61.7 billion (31 December 2009)
$49.4 billion (31 December 2008)

Agriculture - products

beef, dairy products, barley, potatoes, wheat

Industries

pharmaceuticals, chemicals, computer hardware and software, food products, beverages and brewing; medical devices

Industrial production growth rate

7.5% (2010 est.)

Electricity - production

27.28 billion kWh (2010 est.)

Electricity - production by source

fossil fuel: 95.9%
hydro: 2.3%
nuclear: 0%
other: 1.7% (2001)

Electricity - consumption

26.99 billion kWh (2010 est.)

Electricity - exports

290 million kWh (2010 est.)

Electricity - imports

756 million kWh (2010 est.)

Oil - production

0 bbl/day (2009 est.)

Oil - consumption

160,900 bbl/day (2009 est.)

Oil - exports

19,270 bbl/day (2009 est.)

Oil - imports

181,600 bbl/day (2009 est.)

Oil - proved reserves

0 bbl (1 January 2010)

Natural gas - production

392 million cu m (2009)

Natural gas - consumption

4.999 billion cu m (2009)

Natural gas - exports

0 cu m (2009)

Natural gas - imports

4.628 billion cu m (2009)

Natural gas - proved reserves

9.911 billion cu m (1 January 2010 est.)

Current Account Balance

-$1.477 billion (2010 est.)
-$6.762 billion (2009 est.)

Exports

$111.3 billion (2010 est.)
$107.3 billion (2009 est.)

Exports - commodities

machinery and equipment, computers, chemicals, pharmaceuticals; live animals, animal products

Exports - partners

US 21%, Belgium 17%, UK 16.1%, Germany 7%, France 5.4% (2009)

Imports

$61.98 billion (2010 est.)
$62.22 billion (2009 est.)

Imports - commodities

data processing equipment, other machinery and equipment, chemicals, petroleum and petroleum products, textiles, clothing

Imports - partners

UK 35.4%, US 16.8%, Germany 6.8%, Netherlands 5.9%, France 4.8% (2009)

Reserves of foreign exchange and gold

$2.115 billion (31 December 2010 est.)
$2.154 billion (31 December 2009 est.)

Debt - external

$2.253 trillion (30 September 2010)
$2.087 trillion (31 December 2009)

Stock of direct foreign investment - at home

$228 billion (31 September 2010 est.)
$236.2 billion (31 December 2009)

Stock of direct foreign investment - abroad

$286.2 billion (31 September 2010)
$264.6 billion (31 December 2009)

Exchange rates

euros (EUR) per US dollar -
0.755 (2010)
0.7198 (2009)
0.6827 (2008)
0.7345 (2007)
0.7964 (2006)

Denmark Economy

2011-09-23T00:41:00.000-07:00

Denmark's industrialized market economy depends on imported raw materials and foreign trade. Within the European Union, Denmark advocates a liberal trade policy. Its standard of living is among the highest in the world. In 2011, Denmark is expected to devote about 0.84% of gross national income (GNI) to foreign aid to less developed countries, including for peace and stability purposes, refugee pre-asylum costs, and environmental purposes in central and eastern Europe and developing countries, making Denmark one of the few countries that are contributing more than the UN goal of 0.7 % of GNI to aid.

Denmark is a net exporter of food and energy. Its principal exports are machinery, instruments, and food products. The United States is Denmark's largest non-European trading partner, accounting for 5.0% of total Danish goods trade in 2010. Aircraft, computers, machinery, and instruments are among the major U.S. exports to Denmark. Among major Danish exports to the United States are industrial machinery, chemical products, furniture, pharmaceuticals, canned ham and pork, windmills, and plastic toy blocks (Lego). In addition, Denmark has a significant services trade with the U.S., a major share of it stemming from Danish-controlled ships engaged in container traffic to and from the United States (notably by Maersk-Line). There were 436 U.S.-owned companies operating in Denmark in 2008, not including financial service companies.

Like the rest of the world, Denmark was affected by the 2008-2009 global economic crisis. Most local observers agree that Denmark is on the path to a slow recovery, with economic growth from the third quarter of 2009 onward. Gross unemployment averaged 6.0% in 2010, up from 2.7% in 2008; the average length of the unemployment period has increased. Unemployment is not anticipated to decrease before the end of 2011. Private consumption has contracted significantly and is still below pre-crisis levels. The same goes for industrial production, which has been pushed to the lowest level in over a decade. Exports fell dramatically--about 20%--also due to the devaluation of trading partners’ currencies, especially those of Sweden, Norway, and the U.K. In 2010 exports regained some of the loss with 10% growth. The gross domestic product contracted by 4.9% in 2009, but is estimated to have grown by 2% in 2010 after beginning to rebound in the third quarter of 2009. The government estimates GDP growth of 1.7% in 2011 and 1.5% in 2012. In 2008, the budget surplus was $11.58 billion (3.4% of GDP), which changed to a deficit of $8.5 billion in 2009 (2.7% of GDP). The deficit was estimated at $11.11 billion in 2010 and is forecast to be $14.93 billion in 2011 (3.6% and 4.7% of GDP, respectively), exceeding the 3% limit set by the Economic and Monetary Union of the EU (EMU). The government has proposed plans for fiscal consolidation to bring the deficit below 3% of GDP by 2013; as of January 2011, the EU Commission said that Denmark’s responses to remedy the excessive deficits had been adequate. Public debt reached 41.4% of GDP in 2009 but remains well within the 60% limit set by the EMU. It was estimated to increase to 43.3% in 2010 and is forecast to be 43.8% in 2011.

In addition to the global crisis, Denmark has an underlying growth problem, and is projected to have one of the lowest productivity growth rates among Organization for Economic Cooperation and Development (OECD) countries in the decade to come; it dropped from sixth to twelfth place among the richest OECD nations from 1997 to 2007. Denmark is facing demographic challenges that could lead to labor supply shortages as early as 2012 according to some estimates. Denmark has maintained a stable currency policy since the early 1980s, with the krone formerly linked to the Deutschmark and since January 1, 1999, to the euro. The Greek financial crisis has affected Denmark to some extent--as the euro falls in value, the krone also falls, making Danish exports more competitive. Denmark’s contribution to the EU financial support package to Greece was 1.2 billion euro. As of 2010, Denmark no longer meets the economic convergence criteria for participating in the EMU due to its public deficit rising above the allowed 3% of GDP. Prior to the Greek financial crisis, opinion polls showed a majority in favor of the EMU, though polling at the end of 2010 showed strong support for a "no" vote in the event of a referendum on joining the eurozone. No referendum on the EMU/euro is expected before a general election that must be held in 2011, nor until polling shows a significant majority for a "yes" vote.

Danes are generally proud of their welfare safety net, which ensures that all Danes receive basic health care and need not fear real poverty. However, there is a growing political debate about how government policy should be reformed in order to preserve and strengthen the system. The portion of working-age Danes (16 to 66-year-olds) living mostly on government transfer payments amounts to 22.6% (2009). The heavy load of government transfer payments burdens other parts of the system. Health care, other than for acute problems, and care for the elderly and children have suffered, while taxes remain among the highest in the world. About one-third of the labor force is employed in the public sector.

Greenland
On June 21, 2009, Greenland assumed increased autonomy under a Self Rule Act, transitioning away from “home rule”, which had been in effect since 1979. Under self rule, the Greenlandic government (Naalakkersuisut) and the Danish Government are recognized as equal partners and Kalaallisut, the Inuit dialect, becomes the official language. Greenland will gradually take responsibility for additional government functions, such as prisons, criminal justice, courts of law, family law, passports, and mineral resources. The Danish Government freezes its annual block grant at the 2007 level of 3.2 billion kroner ($570 million, 2010 exchange rate). That grant will be adjusted for Danish inflation, though not the often higher Greenlandic inflation, meaning the value in real terms is expected to shrink in coming years. However, Greenland gains rights to its mineral, oil, and natural gas resources: the first 75 million kroner ($13.3 million) from mineral/oil/gas revenues would go to Greenland, with further revenues split equally between the two governments, and with Denmark’s share being subtracted from the annual block grant. Once the block grant is eliminated, any additional revenue would be subject to renegotiation between the Danish and Greenlandic governments.

The public sector in Greenland, including publicly owned enterprises and the municipalities, plays the dominant role in the economy and employs roughly 50% of the workforce. A large part of government revenues still comes from the Danish Government block grant, 46% in 2009. The block grant remains an important supplement to GDP. About one-third of government revenue came from taxes in 2009.

According to the World Bank, Greenland’s GDP was $1.8 billion in 2008, and GNI per capita was $32,960. The global economic slowdown affected Greenland as well; a contraction of 2% of GDP was expected for 2009, although statistics for that period have not yet been released. The surpluses in the public budget turned to a deficit of $30 million in 2009, and unemployment is on the rise after an extended period from 2003 onward with lower unemployment. The average unemployment rate for 2008 was 5.5%, 7.1% in 2009, and averaged 8.3% for the first three quarters of 2010. Structural reforms are still needed in order to create a broader business base and economic growth through more efficient use of existing resources in both the public and the private sectors.

Due to its continued dependence on exports of fish (mainly shrimp), which make up 85% of goods exports, Greenland’s economy remains very sensitive to foreign developments. Greenland has registered a foreign trade deficit since the closure of the last remaining lead and zinc mine in 1989. The trade deficit reached $325 million, or 18% of GDP, in 2009. International interest in Greenland’s mineral wealth is increasing. International consortia are increasingly active in exploring for hydrocarbon resources off Greenland’s western coast; in November 2010, seven exclusive licenses for exploration and exploitation of oil and gas were awarded. There are international studies indicating the potential of oil and gas fields in northern and northeastern Greenland. The U.S. Geological Survey estimates that up to 17 billion barrels of oil and gas are present in the area between Canada and Northwest Greenland. Cairn Energy carried out three exploration drillings in Greenland in 2010, the first exploration drilling in Greenland in 10 years, and discovered gas and oil-bearing sands in one of the drillings. The U.S. aluminum producer Alcoa in May 2007 concluded a memorandum of understanding with the Greenland Home Rule Government to build an aluminum smelter and associated power generation facility in Greenland to take advantage of abundant hydropower potential, although progress on that project has been delayed. It is estimated that, upon completion, the Alcoa investment would be worth approximately $2.5 billion. Tourism also offers another avenue of economic growth for Greenland, with increasing numbers of cruise lines now operating in Greenland’s western and southern waters during the peak summer tourism season.

Faroe Islands In early 2008 signs of an impending slowdown in the Faroese economy became apparent. The main difficulty lay with the fishing industry coming under pressure from smaller catches combined with historically high oil prices. Reduced catches, especially of cod and haddock, strained the Faroese economy in 2008-2009. GDP grew 24% (in current prices) between 2004 and 2008 but then contracted by 0.8% in 2008 and by 4.2% in 2009. According to the Governmental Bank of the Faroes (Landsbanki Foroya), indications were that in 2010 the Faroese economy was about to change from a downturn to growth, and nominal GDP was projected to grow by 2.9%. The bank predicts that there are prospects for nominal economic growth in 2011 (about 5%) and some years ahead. The main drivers of growth are considerably higher output levels in the fisheries sector in 2010 and expectations for increased private spending. The public sector is expected to reduce its deficit in 2011, and the Governmental Bank expects that the public budget will be brought into balance over the course of 5 years.

The temporary slowdown in the Faroese economy followed a strong performance since the mid-1990s, with annual growth rates averaging close to 6%, mostly as a result of increased fish landings and salmon farming and high and stable export prices. Positive economic development had helped the Faroese Home Rule Government produce increasing budget surpluses that in turn helped to reduce the large public debt, most of it to Denmark. Most of the Faroese who emigrated in the early 1990s (some 10% of the population) due to an economic recession have returned. Unemployment had been low since 2003 and practically non-existent at its lowest level of 1.2% in April 2008 but has since increased sharply, with average unemployment of 5.7% in 2010 and rising. The Faroese economy is very vulnerable, due to its dependence on fishing and salmon farming and fluctuating energy prices.

The currency of the Faroe Islands is the Foroyska kronan. However, it is not an independent currency. Faroese bank notes are Danish bank notes that feature Faroese motifs. There are no Faroese coins.

Initial discoveries of oil in the Faroese area give hope for eventual oil production, which may lay the basis for a more diversified economy and thus less dependence on Denmark and Danish economic assistance. Aided by an annual subsidy from Denmark corresponding to about 6% of Faroese GDP, the Faroese have a standard of living comparable to that of the Danes and other Scandinavians.

Politically, the present Faroese Home Rule Government has initiated a process toward greater independence from Denmark, if not complete secession from the realm. In that respect, agreement on how to phase out the Danish subsidy plays a crucial role.

GDP (2009): $297.8 billion (current prices and exchange rates; source: Government of Denmark).

Annual growth rate (real terms, 2009): -4.9%.
Per capita GDP (2009): $53,822 (current prices and exchange rates).

Agriculture and fisheries (2.3% of GDP, 2009): Products--meat, milk, grains, seeds, hides, fur skin, fish and shellfish.

Industry (19.3% of GDP, 2009): Types--industrial and construction equipment, food processing, electronics, chemicals, pharmaceuticals, furniture, textiles, windmills, and ships.

Natural resources: North Sea--oil and gas, fish. Greenland--fish and shrimp, potential for hydrocarbons and minerals, including zinc, lead, molybdenum, uranium, gold, platinum. The Faroe Islands--fish, potential for hydrocarbons.

Trade (2010, goods): Exports--$96.281 billion: industrial production/manufactured goods 73.3% (of which machinery and instruments were 21.4%, and fuels, chemicals, etc. 26%); agricultural products and others for consumption 18.7% (in 2009 meat and meat products were 5.5% of total export; fish and fish products 2.9%). Imports--$83.967 billion: raw materials and semi-manufactures 37.4%; consumer goods 17.9%; capital equipment 21.7%; transport equipment 9.7%; fuels 8.0%. Major trade partners, exports--Germany 16.8%, Sweden 13.3%, U.K. 7.8%, U.S. 6.6%, Norway 6.3%, Holland 4.4%. Major trade partners, imports--Germany 20.8%, Sweden 13.3%, Holland 7.1%, U.K. 6.0%, China 7.6%, Norway 3.9%, U.S. 3.2%.

Official exchange rate (2010 average): 5.62567 kroner=U.S. $1.

Resetting Egypt’s economy

2011-09-21T01:00:00.000-07:00

By Mohamed A. El-Erian
El-Erian is the CEO of PIMCO. He spent part of his childhood in Egypt where his father was a professor of international law at Cairo University and then served as an Egyptian diplomat and was elected to the International Court of Justice in 1978. The opinions expressed are his own.
While Egyptians are yet to specify the final destination for their revolution — and only they can, and should do so — there is little doubt in my mind that the country is now on a new, bold and uncertain road toward greater democracy and individual freedoms. The next few days and weeks will be critical in determining the journey for a country that is central to the stability of the Middle East.
Undoubtedly, domestic political developments hold the key to what will happen. Egyptians need to converge on a common understanding and vision of “managed change”. And this vision must satisfy the millions of Egyptians — from all ages, religions and walks of life — that unite in Tahrir (Liberation) Square and elsewhere to better influence and improve their destiny.
Yes, street and state politics are the undeniable drivers today. This will involve both upheavals and compromises. Yet economics and finance will also play a crucial role, especially when it comes to the urgent recovery of an economy that has experienced one of the most dramatic “sudden stops” in recent history. In the process, this will also define how Egypt’s friends and allies can come off the sidelines and help the country’s unprecedented transformation.
For two weeks, economic activity was at a virtual standstill. Supplies dwindled. Banks and many shops closed. ATMs ran out of cash. Schools and offices were shut. Domestic and international trade was disrupted. Tourism evaporated.
Egypt’s economy will need to restart and reset. Three factors stand out in a process that is critical for the longer-term well-being of the country, including the millions of Egyptians that are protesting for greater freedoms.
First, Egypt’s banking system must resume normal operations in an orderly fashion. A very good start was made on Sunday to bring part of the system back on line, and important challenges remain.
The central bank has no choice but to flood the financial system with both domestic and dollar liquidity. And both the central bank and the commercial banks must continue to avoid the temptation to overly curtail deposit withdrawals lest that, in itself, fuel a deposit run.

Second, the Finance Ministry must deal properly with the unanticipated collapse in tax revenues. It must make sure that this temporary interruption in government receipts does not lead to even more destabilizing spending disruptions. Salaries must be paid promptly, and all supplier bills must be met.
Third, particular emphasis must be placed on targeted social spending, particularly when it comes to health, food subsidies, and shelter. Remember, Egypt’s poor are extremely vulnerable to the current economic and financial dislocations.
The challenge of such an orderly reset is an enormous one. It cannot be met easily by Egyptians alone. They will need help; and their courage and determination warrant international support.
Assuming a satisfactory political resolution, Egypt’s friends and allies will have a chance to support the country’s economic recovery. In particular, they should stand ready to provide central bank swap lines, as well as to significantly accelerate and redirect aid in the pipeline. And they should actively facilitate the involvement of institutions that already have effective links and extensive networks among the most vulnerable segments of Egyptian society.
A historic grass root movement has made massive sacrifices by taking to the street to bring greater democracy to the most populous country in the Middle East and North Africa. The movement has endured tremendous pain and taken enormous risks. Let their brave historic efforts be reinforced by properly resetting an economy that has been subjected to a dramatic sudden stop.
Photo, Top: An anti-government protestor shouts anti-Mubarak slogans after Friday prayers at Tahrir Square in Cairo February 4, 2011. REUTERS/Mohamed Abd El-Ghany
Bottom: Anti-government protesters carry a big Egyptian flag after Friday prayers at Tahrir Square in Cairo February 4, 2011. Tens of thousands of Egyptians prayed in Cairo’s Tahrir (Liberation) Square on Friday for an immediate end to President Hosni Mubarak’s 30-year rule, hoping a million more would join them in what they called the “Day of Departure” . REUTERS/Amr Abdallah Dalsh

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Icelandic Economy Bounces Back From Brink

Central African Republic Economy

Bermuda Economy and Industries

Regeneration of Bermuda’s economy

Belgium is world’s fourth most open economy

Albania showing critical signs of economic crisis

The Netherlands economic overview

Finland Economy

Economy - overview

GDP (purchasing power parity)

GDP (official exchange rate)

GDP - real growth rate

GDP - per capita (PPP)

GDP - composition by sector

Population below poverty line

Labor force

Labor force - by occupation

Unemployment rate

Unemployment, youth ages 15-24

Household income or consumption by percentage share

Distribution of family income - Gini index

Investment (gross fixed)

Budget

Taxes and other revenues

Budget surplus (+) or deficit (-)

Public debt

Inflation rate (consumer prices)

Central bank discount rate

Commercial bank prime lending rate

Stock of money

Stock of narrow money

Stock of broad money

Stock of quasi money

Stock of domestic credit

Market value of publicly traded shares

Agriculture - products

Industries

Industrial production growth rate

Electricity - production

Electricity - production by source

Electricity - consumption

Electricity - exports

Electricity - imports

Oil - production

Oil - consumption

Oil - exports

Oil - imports

Oil - proved reserves

Natural gas - production

Natural gas - consumption

Natural gas - exports

Natural gas - imports

Natural gas - proved reserves

Current Account Balance

Exports

Exports - commodities

Exports - partners

Imports

Imports - commodities

Imports - partners

Reserves of foreign exchange and gold

Debt - external

Stock of direct foreign investment - at home

Stock of direct foreign investment - abroad

Exchange rates

Venezuela Economy

Venezuela - GROWTH AND STRUCTURE OF THE ECONOMY

Venezuela - ECONOMIC POLICY

Fiscal Policy

Monetary and Exchange Rate Policies

France Economy

GDP

Employment Situation

Industrial Production

Trade balance

Taiwan economy 2012

Russia's Economy Enters 2012

Chart 1