green green green

yellow

this is mustafa

In North Africa, high international food prices have incited inflation. Yet, countries are witnessing record growth rates; Egypt’s growth rate is forecast at 7% in 2008, despite inflation being at a 16-year high.
After the stellar 9%-plus growth in 2006-07, India’s 2008 growth forecast has been lowered to below 8%. In spite of being labeled a domestic-demand driven economy resilient to global slowdown, the recent investment boom and above-potential growth were buoyed by benign global liquidity conditions. The oil price shock has exposed India’s vulnerability with the trade deficit, expected to exceed 10% of GDP while global financial turmoil and weakening growth prospects have led to capital outflows and downward pressure on the currency. Corporate earnings and capex plans are also at risk amid rising production costs and lending rates, accentuated by the global credit crunch and stock market volatility. Inflation, at a 16-year high, is partly driven by food, commodities, and fuel price hikes, but it has been exacerbated by strong domestic demand, pre-election fiscal spending, and credit growth. The subsidy burden may raise the fiscal deficit to over 10% of GDP. Furthermore, interest rate hikes will severely impact consumer spending and private investment so any easing of global commodity prices would be a major boon.


South Korea, often noted as the bellwether of the global economy, is slowing - don't let those strong export growth figures fool you. Though export growth accelerated to 37.1% y.y in July, the strength comes from price not volume growth. Moreover, import prices again outpaced export prices, worsening the terms of trade. Business and consumer confidence are at multi-year lows and materializing as a slowdown in both domestic demand and manufacturing and non-manufacturing output. What's to blame? Tighter credit conditions and lackluster global demand. Both the public and private sectors have lowered forecasts for Korea's annual nominal GDP growth to 4.7%.


Chinese growth has decelerated for the last four quarters, reaching 10.1% in Q2. While its size may allow it to avoid an Olympics bust, global weakness, and persistent inflation, the time of double-digit growth may be over for now. Private consumption is now contributing more to growth and retail sales are rising in real terms, but inventory pileups could indicate overcapacity in some sectors. Exports to the EU, which marked double-digit growth in 2007 and offset a decline in trade with the U.S., are now slowing. With a focus on growth, and with headline inflation declining, the Chinese government is selectively stepping away from its tight monetary policy, loosening loan curbs and limiting RMB appreciation – and might instead rely on a stimulus package. Slowing growth, contagion from global markets, a shortage of credit, and waning corporate profits have contributed to declines in Chinese equity and property markets. And check out RGE Analyst Rachel Ziemba’s analysis of the post-Olympics Chinese economy: Is China Suffering an Olympic Shock?