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Prospects Daily: Euro Area slips into recession in third quarter

Global equities fell for a seventh day, with the benchmark MSCI world stock index sliding 2%, hurt by mounting concerns over the U.S. fiscal crisis and reports that the Euro-area economy entered its second recession since 2009. World stocks have lost more than 3% this month.

World Bank

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Financial Markets…Global equities fell for a seventh day, with the benchmark MSCI world stock index sliding 2%, hurt by mounting concerns over the U.S. fiscal crisis and reports that the Euro-area economy entered its second recession since 2009. World stocks have lost more than 3% this month.

The Japanese yen weakened 1.4% to 81.39 per dollar, after reaching a nearly 6-month low of 81.46, amid prospects of further aggressive monetary easing following a contraction in third quarter GDP. The yen also fell 1.7% to 103.92 per euro, the lowest in almost two weeks.

Oil prices rose on Thursday, with crude for December delivery rising as much as 51 cents to $86.83 a barrel in New York trading, as Israel’s attack on the Gaza Strip intensified concern that escalating Middle East unrest would disrupt oil supplies. Brent for December settlement also jumped to $111 a barrel in London trading.

Namibia issued a 850 million rand ($95 million) 10-year bond at an average yield of 105 basis points higher than comparable benchmark South African bonds. It was Namibia’s first bond issue denominated in the South African currency. The country announced plans to sell an additional 2.15 billion in rand bonds in the future.

High-income EconomiesEuro Area GDP contracted 0.1% (q/q) in the third quarter of 2012, following a 0.2% decline in the second quarter, as the currency union’s economic performance continues to suffer from the ongoing debt crisis and fiscal austerity. The two consecutive quarterly GDP declines imply a technical recession (the second one since 2009). On a year-on-year basis, Euro Area output fell at a slower pace of 0.4% (y/y) in Q3 compared to a 0.6% (y/y) drop in Q2.

Positive quarterly GDP increases in the third quarter in the two largest Eurozone economies, Germany (+0.2% q/q in Q3 vs. +0.3% in Q2) and France (+0.2% in Q3 vs. -0.1% in Q2), were partially offset by GDP declines in Spain (-0.3% in Q3 vs. -0.4% in Q2), Italy (-0.2% in Q3 vs. -0.7% in Q2), the Netherlands (-1.1% in Q3 vs. +0.1% in Q2), and Portugal (-0.8% vs. -1.1%); earlier data showed Greece’s output contracted at a faster pace of 7.2% (y/y) in Q3 compared to a 6.3% (y/y) decline in Q2.

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Investment

Thailand Q1 Investment Applications Soar 80% as FDI More Than Double says BOI

The top three source countries of FDI applications during the first quarter were South Korea, China, and Singapore, with similar levels of investment. Korean investment soared due to a large-scale joint venture in the medical sector, Ms Duangjai said.

Pr News and BOI

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The Thailand Board of Investment (BOI) said today that in the first quarter of 2021, investment applications rose 80% from the year earlier period to a total value of 123.4 billion baht (USD3.9 billion), led by projects in the medical and electric and electronics (E&E) sectors, as foreign direct investment (FDI) applications more than doubled.

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Economics

Finance Ministry Reduces 2021 Growth Forecast to 2.3%

Fiscal Policy Office (FPO) Director-General Kulaya Tantitemit said the ministry slashed its forecast for the number of foreign tourists to only 2 million this year from 5 million it had predicted three months ago.

National News Bureau of Thailand

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Export growth better-than-expected in December 2020. However, amid the second wave of COVID-19 infections, exports could fall below previously forecasted levels in 2021.

BANGKOK (NNT) – The Finance Ministry has reduced its 2021 economic growth forecast for a second time to 2.3% from 2.8% growth, after a third wave of coronavirus infections struck Thailand this month.

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Economics

Developing Asia growth set to rebound to 7.3% in 2021 (ADB)

Thailand slow vaccination progress coupled with a surge of infections has prompted Kasikorn Research Centre to lower its growth projection for the Thai economy this year from 2.6 percent to 1.8 percent. However, ADB’s forecast for Thailand growth in 2021 remains set at 3% (and 4.5% in 2022).

Olivier Languepin and Asian Development Bank

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MANILA, PHILIPPINES (28 April 2021) — Economic growth in developing Asia is set to rebound to 7.3% this year, supported by a healthy global recovery and early progress on coronavirus disease (COVID-19) vaccines, according to a new report from the Asian Development Bank (ADB).

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