The International Monetary Fund (IMF) has lowered their forecast for world growth in 2012 amidst threats to world growth over the Eurozone crisis. The lowered forecasts were a direct result of the deteriorated growth in the Euro area and prospects of a mild recession in the zone.
The IMF noted that financial conditions have deteriorated, growth prospects have dimmed and downside risks have escalated. The IMF believe the global recovery is threatened by intensifying strains in the Euro area and fragilities elsewhere.
The IMF cut world growth forecast to 3.3% from 4%, however state that growth could be 3.9% if markets avoid panic over the Eurozone.
Europe’s largest economies continue to grow albeit at a slower pace. IMF forecast Britain to grow at 0.6%, followed by Germany at 0.2% and France at 0.3%.
The world’s largest economy, the USA is projected to grow at 1.8%.
Significantly for Australia, China, the world’s second largest economy, is forecast to grow at 8.8% for 2012 and 8.2% for 2013.
Australia’s seasonally adjusted unemployment rate was 5.2 per cent in December, the Australian Bureau of Statistics (ABS) said today.
The ABS reported the number of people employed decreased by 29,300 to 11,421,300 in December. The decrease in employment was driven by a drop in part-time employment, down 53,700 people to 3,370,300, and was offset by an increase in full-time employment, up 24,500 people to 8,051,000.The decrease in seasonally adjusted part-time employment was driven by weaker than usual growth during the December period, which was particularly noticeable for women aged 15 to 24.
The number of people unemployed decreased by 3,800 people to 629,900 in December, the ABS reported.
ABS Building Approvals show that the number of dwellings approved rose 8.4% in November 2011, in seasonally adjusted terms, following a fall of 10.0% in October.
Dwelling approvals increased for the month of November in Victoria (39.9%), Queensland (6.6%) and New South Wales (2.0%) but fell in Western Australia (-16.9%), Tasmania (-7.9%) and South Australia (-1.9%) in seasonally adjusted terms.
In seasonally adjusted terms, approvals for private sector houses rose 4.8% in November with rises in Victoria (13.0%), Queensland (10.8%), South Australia (2.3%) and New South Wales (0.3%), while Western Australia fell (4.9%).
The value of total building approved decreased 2.6% in November in seasonally adjusted terms, following a decrease of 2.0% in October. The value of residential building fell 2.7% while non-residential building fell 2.5%.
Widespread flooding, and other natural disasters, in the eastern states during late 2010 and early 2011 have not adversely affected participation by providers in the Building Approvals collection or the quality of estimates in this release. However, these events may have had an impact on the number of approved dwellings and the value of approved work.
Further information is available in Building Approvals, Australia (cat no. 8731.0) on the ABS website at www.abs.gov.au
Australia’s trade surplus narrowed in October, the Australian Bureau of Statistics (ABS) said.
The balance on goods and services was a surplus of $1.595 billion in October, seasonally adjusted, compared with a downwardly revised surplus of $2.249 billion in September.
Economists’ forecasts had centred on a surplus of $2.0 billion in October.
During October, exports were flat in adjusted terms and imports rose 2.0 per cent, the ABS said on Monday.
The Reserve Bank of Australia (RBA) has cut the cash rate to 4.25 per cent from 4.5 per cent at its December board meeting.
It was the second consecutive month that the RBA has cut the rate.
Economists were divided on what the central bank would do at the December meeting, with seven of the 14 economists surveyed by AAP saying there would be a cut.
RBA governor Glenn Stevens said the eurozone financial and banking problems were likely to weigh on economic activity over the period ahead. Continue reading
Australia’s big four banks have had their credit ratings downgraded by Standard & Poor’s as the agency changes its criteria for assessing banks.
Westpac Banking Corporation, Commonwealth Bank of Australia, ANZ Banking Group and National Australia Bank all had their issuer credit ratings downgraded by one notch from AA to AA minus.
Macquarie Group had its long-term rating downgraded from A minus to BBB.
The move by S&P follows downgrades to its ratings of 37 of the largest banks around the world earlier this week. Continue reading
Facebook might finally be laying down the groundwork for a highly anticipated initial public offering, long expected to take place sometime after April 2012.
The Wall Street Journal is reporting that the world’s largest online social network is looking into raising as much as $US10 billion in its IPO.
US rules require companies with at least $US10 million in assets and more than 500 shareholders to disclose its quarterly financial results and other details. Facebook has tried to put off an IPO to focus on building its product. But the financial reporting requirement will kick in in April.
The Palo Alto, California company has employees and investors waiting to cash in on their stock.
An email seeking comment from Facebook was not immediately returned.
Source: AAP
The World Trade Organisation (WTO) said Monday in its annual report that the worsening outlook for the global economy has led to slower growth in exports.
“The outlook for the global economy has worsened considerably in recent months,” said the report, with WTO chief Pascal Lamy calling for renewed efforts to break down trade barriers.
“Global activity is slowing down. … World trade has grown more slowly than expected in recent months,” the report said.
The report confirmed a downward revision of its forecast for world export growth in 2011 to 5.8 per cent from an earlier estimate of 6.5 per cent.
Developed economies’ exports are now expected to rise by 3.7 per cent rather than 4.5 per cent, and those from developing countries by 8.5 per cent instead of 9.5 per cent.
“In a context of greater economic uncertainty and rising global risks, it is all the more important that the process of global trade opening continues,” Lamy said.
Continue reading
When the going gets tough, the tough get buying.
At least, that seems to be the path taken by the world’s most successful investor, billionaire Warren Buffett.
Buffett has an enviable track record – since 1965, he’s compounded the per-share book value of his company, Berkshire Hathaway (VTP 2000 Code: BRKb.N) at an annual rate in excess of 20%. If that sounds impressive, it should – the US Standard & Poors 500 index grew at an average rate of 9.4% per year over the same time period.
Excellence, compounded
Berkshire’s growth equates to a cumulative gain of 490,000%. No, that’s not a misprint, and I haven’t misplaced a decimal point.
Now I have your attention, and have given you ample evidence of why Buffett’s example should be heeded, I want to turn to more recent times. Continue reading