ECONOMY
Pimco forecasts growth
Pacific Investment Management Co (Pimco) tapped former US Federal Reserve chairman Ben Bernanke to help formulate an outlook for next year that projects higher growth, a stronger dollar and muted inflation. The manager of the world’s largest bond mutual fund said global growth will accelerate next year in a “rising tide” as lower oil prices help most economies. Expansion will climb to about 2.75 percent from about 2.5 percent this year, Pimco said in a report posted on the company’s Web site on Thursday. Economists expect growth of 2.8 percent for next year, the average forecast in a Bloomberg survey.
ECONOMY
China’s GDP revised up
The government revised up the size of its economy for last year, but sees that having little effect on economic growth this year. GDP was up 3.4 percent to an estimated 58.8 trillion yuan (US$9.5 trillion) last year, the National Bureau of Statistics said yesterday, following a new economic census. That marks a rise of 1.9 trillion yuan in the size of the economy that year, slightly below the entire GDP of Malaysia during the same period, according to World Bank statistics. The upward revision of GDP reflected greater contribution from the services sector, which accounted for 46.9 percent of last year’s GDP, up from an initial estimate of 46.1 percent, while the secondary sector — which includes manufacturing and construction — accounted for 43.7 percent of GDP, down from 43.9 percent.
GERMANY
Consumer confidence grows
Consumer confidence saw a boost this month as shoppers hit the stores for Christmas and looked ahead to the new year with optimism, a poll found yesterday. After stabilizing last month following several months of decline, “consumer sentiment showed solid development in December,” market research company GfK said in a statement. “The consumer climate is continuing its upward trend.” Meanwhile, the widely watched Ifo business climate index showed solid gains this month after rising for the first time in seven months last month.
CONSUMER GOODS
Firms fined for price-fixing
Penalizing a dirty business involving cleaning products, French regulators fined 13 consumer-products makers about 950 million euros (US$1.2 billion) for price fixing on goods like shampoos, detergents and toothpaste. France’s competition authority on Thursday said that the companies sought to maintain “artificially high” prices in negotiations with supermarkets which filtered down to consumers — and ultimately impacted the economy. Among those implicated were household names like US-based Colgate-Palmolive, Procter & Gamble, and Sara Lee and Anglo-Dutch firm Unilever.
AUTOMAKERS
GM halts Russian sales
US carmaker General Motors Co (GM) on Thursday said it was halting sales to dealers in Russia due to the falling ruble, following in the footsteps of a number of companies seeking to limit their risk until the currency stabilizes. Company spokesman Sergei Lepnukhov said cars already purchased by customers would be delivered. The ruble has lost about 50 percent of its value since the beginning of this year as Western sanctions over Russia’s annexation of Crimea and support for an insurgency in Ukraine, along with falling oil prices, have hit the economy of the major energy exporter.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure