Crisis to affect performance
Europe’s sovereign debt crisis will dampen the German economy’s performance this year, the Ifo economic research institute said. While economic growth in Europe’s largest economy may accelerate to 1.3 percent next year, heightened uncertainty about the debt crisis will weigh on growth in the middle part of this year, Munich-based Ifo said yesterday. Ifo forecast expansion of 0.7 percent for this year.
Current account improves
South Korea’s current account surplus hit a six-month high last month as dividend payments to foreign investors declined and the service sector improved, figures showed yesterday. The surplus, the broadest measure of overseas trade, was US$3.61 billion last month compared with a revised US$1.73 billion in April and US$2.18 billion in May last year, the Bank of Korea said. It was the largest figure since a US$4.56 billion surplus in November last year.
Stimulus package planned
The government announced a new US$4 billion economic stimulus package to combat stagnant growth. The program announced on Wednesday by President Dilma Rousseff focuses on a wide array of government purchases, from backhoes to motorcycles to military equipment. The economy grew just 0.2 percent in the first quarter of this year. The government maintains a target of 4 percent growth this year, but market forecasts put expansion at 2.2 percent.
Town heads for bankruptcy
The town of Stockton, California, was headed for the nation’s largest ever municipal bankruptcy on Wednesday after it failed to find a way to close a US$26 million budget shortfall. A victim of the collapse of real-estate prices, which wiped out its tax base, the Stockton city council decided late on Tuesday to implement a “pendency plan,” for managing curtailed spending ahead of a court filing for protection. “The city will file sometime before Friday, close of business,” city spokeswoman Connie Cochran said.
Gazprom debt declines
OAO Gazprom, Russia’s biggest company by market value, plans to reduce its total debt about 4.7 percent this year, while earnings may decline 10 percent. Debt is forecast to decline to 1.47 trillion rubles (US$44 billion) this year from 1.54 trillion rubles last year, the Moscow-based natural-gas producer and exporter said yesterday in a presentation. Earnings before interest, taxes, depreciation and amortization may decline 10 percent this year, chief financial officer Andrey Kruglov said in Moscow.
Barclays pays to settle
Barclays PLC and its subsidiaries will pay more than US$450 million to settle charges that they tried to manipulate interest rates that can affect how much people pay for loans to attend college or buy a house. The incidents occurred between 2005 and 2009 and sometimes took place daily, the US Commodity Futures Trading Commission (CFTC) said on Wednesday in announcing the settlement. A US$200 million civil penalty levied against Barclays is the largest in the CFTC’s history. Barclays also agreed to pay US$160 million as part of an agreement with the Justice Department’s criminal division on a related matter. It will also pay nearly US$93 million to British regulators.