Francesco Saraceno | I share with Donald Trump the belief that Germany is harming the world economy. (Ok, ok, it is not bad Germany, it is bad German trade. ). Yet, I think it is worth pointing out something trivial that is not emphasized enough. Trump is right about Germany, but for the wrong reasons. The problem is not the number of German cars circulating in the US, but the number of American cars not circulating in Germany.
Caixin |Moody’s Investors Service on Wednesday downgraded China’s sovereign credit rating for the first time since 1989, warning that the government’s focus on maintaining growth will increase the country’s debt burden and erode its financial strength.
Francisco Vidal | The emphasis put on the Federal Reserve’s actions and the US’ economy’s favourable performance over the last few years led to the debate over the possibility of the euro and the dollar reaching parity, which gained momentum at end-2016 and at the start of 2017. But the euro’s fundamentals are currently better than expected and, in the future, can count on the support of the ECB.
Barry Eichengreen via Caixin | The trade deal announced recently by U.S. and China is not easy to evaluate, involving as it did everything from beef and poultry to liquefied natural gas. Washington and Beijing hailed it as an important breakthrough, but skeptical commentators dismissed it as little more than a repackaging of existing commitments.
Benjamin Cole | Japan has put together a string of five straight quarters of real growth, along with declining unemployment and minute amounts of inflation. Some have recently termed Abenomics “a big success.”
Brazil has written a new page of corruption. President Michel Temer was allegedly caught on tape authorizing businessmen to bribe former House Speaker Eduardo Cunha. This new political instability could have the potential to derail ensuing recovery.
Gavin E.L. Hall | After the WannaCry cyber-incident of May 12, comments focused on whether the attack was preventable and if it presents increased vulnerability for public sector organizations. Such analysis does, however, gloss over an essential question: What do we want the role of the government to be?
Should we be worried by the fact that the Fed is reducing its balance sheet? David Buckle from Fidelity is one of those who think not; moreover, he believes that it won’t have any impact on the financial markets.
Hu Shuli via Caixin | U.S. President Donald Trump’s ambitious proposal to cut corporate and individual taxes is adding to the external uncertainties affecting China’s economy. It follows projections of a faster-than-expected pace of interest rate hikes by the U.S. Federal Reserve.
The IMF’s last report on Mexican Economy praises the quality of the general framework of its economic policy and its execution, encourages maintaining the principles of fiscal consolidation with the aim of keeping debt under control – the federal budget normally closes in the red – and reiterates the importance of transforming PEMEX into a profitable organisation.