Borrowing hits new high
Americans borrowed more in April to attend college and buy cars and were a little less cautious with their credit cards than the previous month. The US Federal Reserve said on Friday that consumer borrowing rose US$11.1 billion in April from March to a seasonally adjusted US$2.82 trillion. That was the 20th straight monthly gain and another record level. Nearly all of the gain came from a category that includes auto and student loans, which increased by US$10.4 billion. A measure of credit card use rose US$682 million. While that was only a modest gain, it follows a decline of US$906 million for the category in March. Greater borrowing could help boost consumer spending, which accounts for 70 percent of economic activity.
Harper to promote EU trade
Montreal on Friday poured cold water on widespread speculation that a Canada-EU free-trade deal would be announced when the prime minister travels to Europe next week. “We’re actually trying to sign the most comprehensive trade agreement that Canada has ever signed ... and we’re not there,” Prime Minister Stephen Harper’s communications director, Andrew MacDougall, told a media briefing. Harper is scheduled to visit London, Paris and Dublin between Tuesday and June 17 to promote trade and investment, and underscore the importance of concluding a deal between Canada and the 27-nation EU. Negotiations started in 2009 with the expectation they would be concluded by late last year, but they became deadlocked over a few holdout issues, mainly in agriculture.
G20 speaks out on stimulus
The G20 is intensifying its debate on how to withdraw the fiscal and monetary stimulus measures that developed nations have used to counter economic recession, Russia said on Friday. So-called “spillover effects” from expansive policies have also risen to the top of the agenda, Russian Minister of Finance Sergei Storchak said on Friday, after G20 finance talks held against a backdrop of sharply increased global market volatility. “The theme of exit strategies has returned,” Storchak told reporters after deputy finance ministers and central bankers met in St Petersburg, Russia. “This theme was raised in the context that countries’ policies should be in line with the expectations of market participants,” Storchak said. Russia’s turn at the helm of the Group of 20 has coincided with an attempt by Japanese Prime Minister, Shinzo Abe to shake the world’s third-largest economy out of a two-decade-old deflationary slump with expansive fiscal and monetary policies.
IMF allows US$1.74bn loan
The IMF on Friday approved a two-year, US$1.74 billion standby loan to support the government as it implements economic reforms. The funds are to be used to shore up the country’s defenses against external and internal shocks while it pushes ahead to strengthen the banking system, fix government finances and boost jobs and incomes, the IMF said. “Tunisia has embarked on a moderate economic recovery while facing a challenging international economic environment and pursuing a political transition,” IMF deputy managing director Nemat Shafik said in a statement.