MADRID | By The Corner | The International Monetary Fund (IMF) revised downwards its growth forecasts for the US from 2.8% in April 2014 to 2%, and maintained 2015 outlook in 3%. Furthermore, the institution believes that the country will not achieve full employment before 2017.
LONDON | By Kieran Davies at Barclays | Australia’s largest mining boom on record is in its final stage, with mining investment starting to fall at a faster rate and mining exports start to lift rapidly as supply comes on stream. These trends have seen the current account deficit narrow to 1.4% of GDP, the smallest shortfall since 1980, although we expect the current account to remain in deficit as a massive increase in the supply of commodities over the next few years pushes export prices lower.
MADRID | By Donato Ndongo-Bidyogo | Its oil reserves – 15.6 billion barrels, 2.5 million exported daily – and gas (three million cubic meters) make Nigeria the leading African economy, outperforming South Africa. A notable industrial potential, petrochemicals and cinema industries stand out: Nollywood released more than 7,000 movies in the last decade, just surpassed by India (Bollywood) and ahead of the USA (Hollywood).
MADRID | The Corner | It’s not only about China or the US. Housing prices are well above their historical averages in many countries such as Poland, Turkey or Brazil. And that could mean big trouble for those economies, some of which need to assess their lack of capacity, like the UK. This time the EU’s peripherals are following the opposite trend, with home prices falling 7% in Greece, 6.6% in Italy and 5% in Spain in 2013. The graph shows home prices’ y-o-y evolution in 4Q13.
LONDON | By Kyohei Morita and Yuichiro Nagai at Barclays | The Abe administration is currently aiming to reach a Cabinet decision on its new growth strategy and “big bone” economic and fiscal reform plans around end-June. The discussions are far-reaching, but from the perspective of market participants, we believe there are four near-term focal points: 1) corporate taxes; 2) labor market reforms; 3) reforms to the pension system, including the Government Pension Investment Fund (GPIF); and 4) special national strategy zones. Here we focus on corporate taxes, likely the only subject of concrete discussion for the markets in June.
MADRID | The Corner | Head of Economics at the International Energy Agency remarked that “the investment in renewables in Europe has tripled the US’ investment in the entire shale gas production.” Prices are 20% below the right level to recover the cost of new investments due to the existence of overcapacity and subsidised prices in renewables.
Brazilians are unified in their frustration with the government before the World Cup.
What does Apple’s acquisition of Beats Electronics mean for the music streaming market? Apple’s $3 billion purchase of Beats Electronics was an uncharacteristic move for a company that has typically limited its acquisitions to small start-ups.
WASHINGTON | By Pablo Pardo | It has been one year since, out of the blue, Edward Snowden came out to tell everybody that the Internet is ‘supervised’ by the NSA. And it has been only four days since British giant Vodafone announced that at least six different governments tap its calls. We have lost our online virginity, in case there were still some who had it (apparently, there were). Now we know that the wandering around Internet is almost as private as yelling in the middle of the street.
BEIJING | By Andy Xie via Caixin | Stimulus proposals won’t transform the economy in China, but spending on industrial research, building megacities and globalizing the white collar labor force will.