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Posts Tagged ‘Economic Trends’

Washington DC: Other than promising to pump billions of dollars into the economy on key areas such as education, transportation and jobs, President Obama’s administration on Monday proposed 2.4 billion US dollars in economic aid to Pakistan for the financial year 2013.

USD 2.2 billion out of the 2.4 billion will be used to strengthen independent and public institutions that present a barricade against radicalism and support joint security and anti- terrorism initiatives, plus eight hundred million for the Pakistan Counter-insurgency Capability Fund, the State Department proclaimed a short time after the White House sent the budgetary proposal to Congress.

The state department continued by saying that the budget also proposes USD 197 million support to the US government’s civilian presence, as well as programs for engagement with civil society .

The budgetary proposals of President Barack Obama provides USD 8.2 billion in total for Overseas Contingency Operations to support the massive and momentary costs of public led programs and operations in Iraq, Afghanistan and Pakistan.

Before implementation, the budgetary proposals are for the financial year 2013 beginning on the first of October 2012 needs to be accepted by both chambers of the US Congress – the House of Representatives and the Senate.

In his proposal for this year’s budget, President Barack Obama also proposed 4.6 billion US dollars for Afghanistan. This comprises 2.5 billion US dollars in assistance for programs related to anti-terrorism-, economic expansion, over and above supporting progress in governance, health and education, agriculture and countering the narcotics trade.

President Barack Obama is working on how voters see his plan to, among other things, improve economic trends and whether or not they believe he deserves another four years in his current seat to pursue. The Republicans in the meantime are gearing up for a protracted battle.

As a result of the current economic trends Have you been toying with the idea of purchasing or renting a new SUV or changing over to a more fuel-efficient model, it’s imperative to know that you may not be comparing apples and apples. Just recently the Environmental Protection Agency or the EPA as we know it has a brand method of calculating the fuel economy of the new cars as well as pick-ups and SUVs.

The main reason that the words fuel and efficiency are on the tip of almost everyone’s tongue is simple; in fact it is the main cause for change in so many situations, its cash. As the global economy crashes and the amount of natural resources’ in the world dwindle the price of petrol rises.

A few years back, the EPA, together with automobile manufacturers, used a method of testing a vehicle’s fuel economy, that let’s just say, didn’t satisfactorily recreate real-world conditions. The vehicle was placed on a set of rollers called a ‘dynamometer’ that allowed the car to sit in place while turning the wheels of the vehicle. Although the drag on the rollers was adjusted to better simulate various driving conditions, the vehicles were never tested in an environment where wind resistance could manipulate the amount of fuel being burned, and the accessories were never running. Hence, the test created a level playing field for all vehicles of the same class to be compared, but the results never depicted the fuel economy you could expect in the real world. What’s more, the simulated speeds a few years ago were noticeably slower than what the normal driver actually drives today. It was something like only forty eight miles per hour for highway tests and twenty miles per hour for tests in the city. These conditions were not really effective when checking for fuel economy.

Beginning now, the Environmental Protection Agency has started using an adjusted system of testing requirements to account for all the things that affect fuel economy: faster acceleration, higher speeds in both the city and on the highway, colder external temperatures, and vehicles are now tested with accessories (such as heating or air-conditioning) turned on.

A lot of automobile manufacturers have upgraded their lines to be more fuel-efficient as a response to amplified gas prices over the past two years. However, on paper, the fuel economy of these vehicles seems to be much worse than its predecessors. Without an understanding of the new testing system, comparing one’s older model to a new 2008 could suggest you’re better off keeping the car or pick-up you have. Chances are, you’re not. Even the “non-green” models (models that still operate solely on petrol with no the support of an electrical power source) are becoming progressively more economical.

So what is the moral of the story? Comparing older models to previous years does not tell you a lot in terms of fuel economy, so stick with comparing between the new models to determine if the SUV or car you’ve got your eye on stands up to the other vehicles in its class.

The biggest challenge that Emerging Asia Pacific Economy are facing is the problem of inflation. Almost no Asian country is immune to inflation considering the rocketing rise in crude oil price. To counter the problem the every country has hiked the bank reserve ratio to slowdown the lending and credit growth. The other major problem faced by these economy is rise in food and labor cost which is making things bit more difficult for the emerging economy to sustain the economic growth rate.

Exports in these countries have so far fared well, even though there was uncertainty considering the slow recovery of US economy and debt-laden European countries

China reported export jump in the month of June which helped it in posting its largest trade surplus after many months. While India reported 50% increase in its exports. Other Asian export power house like South Korea and many other exporting Asian countries have seen decent exporting figures, thanks to rising global demand in shipping, steel & auto sector.

Here is a quick summary of some strong Emerging Asia Pacific Economies.

China: The major problem faced by Chinese economy is inflation, slowing consumer spending and slowing real estate and property sector. Chinese’s policy makers are focusing on the challenges faced by the economy in order to curb inflation and to revive and upgrade consumer spending to boost domestic consumption which will help the negatively growing property market to regain its foot.

China has been fighting inflation form last one and a half year after it exceeded the 3% inflation ceiling mark set by China’s National Development and Reform Commission. Rise in input cost have always troubled the Chinese economy to maintain the inflation rate below the ceiling limits. By late 2010 the inflation touched 4% and by May 2011 the inflation rate touched 5.2% mark.

Though China has taken various measures to moderate the rising inflation, since then it has hiked the lending rates four times since October 2010, and the bank reserve ratio have been revised 6^th time to 21.5%.

India: India too faces similar problem like China, with tremendous rise in inflation the economy is seeing pressure in its growth momentum.

To counter inflation the Reserve Bank of India tightened up monetary policy, it increased the cash reserve ratio with banks which made borrowing rates to go up. The raise in borrowing cost has ignited negative sentiments from the private sector. Hence many consumer durable companies have put their expansion plans on hold as they forecast slowdown in sales. Were as many capital intensive industries are giving up some projects due to lack of freely available capital. India’s industrial production also fell in the month of May to 6.3%.

South Korea: South Korea too is no different from the county mentioned above as pressure of inflation is also bothering this economy. South Korean  economy has been battling inflation from past 18 months which was contributed by rising exports, falling unemployment, and rising availability of consumer credit.

South Korean export-based industries have seen tremendous expansion due huge global demand for its consumer durable, auto and industrial input. Exports grew by 22.4% in the month of May.

The growth in export industries has also helped the labor market as unemployment rate was reduced to 3.3% in May. But in the month of May the inflation figures reached 4.1% exceeding the ceiling figure of 4% set by the central bank. The rise in consumer price inflation is also believed to be spreading to core inflation. In May, core inflation figures climbed to a two-year high of 3.5%.

It was surprising to see South Korea’s central bank and the Bank of Korea not raising the interest rates looking at the current trend of inflation in the country.

Taiwan: It was a good time for the Taiwan’s exports industry as exports grew at a pace of double digit for the past several months, until May when the figures dropped down to 9.5%. Taiwan’s economy is highly depended on exports as two third of the country’s total income comes from it.

The inflation figures too recorded an upside in the month of May which reached 1.66% from 1.32% in the month of April, even when export dropped in the country. The reason for inflation growth can be attributed to strong domestic consumption, robust investment and wage rise.

Considering the growth in inflation Taiwan’s Central Bank again decided to hike interest rate by 125 basis points. Since the beginning of 2011 the country is witnessing hike in interest rates for the fifth time.

During the past 12 months and despite the limited conditions of economic exchange, the property group JHI services has remained high occupancy rates in commercial properties under management, with vacancies below an average of four percent.

Johan Engelbrecht, Director, Management and JHI, Which manages more than 170 malls nationally, with an area of nearly two million square meters, said: “Trading the density of JHI run centers are strategically driven to ensure that tenants placed right in their favorite place, size, layout and design, and also taking into account consumer behavior and spending, we are able to proactively manage the employment potential of the time.

Although we have not seen an increase in Requests for information and commercial spaces that we are confident this trend will change over the next six months, “he says.

“There is no doubt that we have seen some recovery in retail sales for the year ended December 2010. Most of South Africa’s major retailers have reported on their December 2010 sales and the news has been predominantly positive, with percentage increases mainly in double figures. The November 2010 retail sales figures nationally were 6.1 percent up year-on-year (according to the SA Council of Shopping Centres Economic Overview dated January 2011).

Over the latter half of 2010 the increase in consumer spending, coupled with the increase in consumer confidence – mainly due to household borrowing gradually returning, with low interest rates and inflation – indicates that perhaps the worst is really over. In general, the major shopping centres under JHI management have achieved a positive growth year-on-year for the period ending December 2010.”

Engelbrecht says retail categories in essentials/durable goods and services still seem to outperform luxury items, although the gap is closing. Retailers ie hardware, paint and glass, specialising in supplying the building and construction sector remain under pressure and there has been an average performance from specialised food and beverages. Conversely, CFTA (clothing, textiles, footwear and accessories), pharmaceuticals, medical goods, toiletries and household goods have performed very well.

He adds: “Our outlook for the retail sector in 2011 remains positive. We will definitely see sustained growth in sales from retailers in established markets and nodes.  Factors impacting on the retail sector include changes in public transport systems, such as the introduction of the Gautrain and toll roads in Gauteng, which will have a significant effect on retail nodes in the future. Such factors have always had a substantial impact on retail nodes, as seen in previous years – with increased pedestrian and commuting nodes established by consumers residing in traditional townships.

Accessibility to major retail nodes will primarily be driven by the consumers’ choice of what will be the most affordable way to reach his/her shopping destination, and ultimately this could impact on the current profile of shoppers frequenting shopping centres.”

Engelbrecht notes that South Africa is following the trends abroad, such as that experienced in the UK where the biggest growth has been achieved in a store format, which is a key priority for food and food products.

“We recognized this shift in consumer behavior overall the time savings and convenience of a critic in today’s hectic lifestyle and have developed a strategy for growth around the cities adjacent to the market value of the community shopping center is to focus on the consumers of South Africa and the proposal to deal with Massmart and Wal-Mart could be an incentive for positive change in the dynamics of. Our retail market, “he says.