ECONOMY
Rousseff budgets for deficit
Brazilian President Dilma Rousseff is to send Congress a 2016 budget with a primary deficit after she abandoned plans to reinstate an unpopular tax to raise revenues next year, Brazilian media reported on Sunday. Rousseff’s economic team decided it was best to present realistic budget numbers to avoid losing further credibility in the market, the O Globo, Folha de S.Paulo and Estado de S.Paulo newspapers reported, citing presidential aides. Without additional revenues, government officials warned last week it would be impossible to meet a fiscal savings target of 0.7 percent of GDP next year as originally planned in the budget, which was to be sent to Congress by yesterday. The absence of a primary fiscal surplus — the budget balance before interest payments — is likely to increase the risk of Brazil losing its prized investment-grade credit rating next year.
ECONOMY
Denmark GDP growth slows
Denmark’s economic expansion slowed as both exports and household demand declined. GDP grew 0.2 percent in the second quarter from 0.5 percent in the first, the statistics office in Copenhagen said yesterday, citing preliminary data. “This isn’t a strong number in any way,” Nordea chief economist Helge Pedersen said. Exports plunged 2.2 percent after growing 1.8 percent in the first three months of 2015. Household spending fell 0.5 percent after rising 0.6 percent. The GDP report comes a week after the government cut its forecast for economic expansion to 1.5 percent this year and 1.9 percent in 2016, citing a slow recovery in domestic demand.
ELECTRICITY
Renewable energy cost falls
The cost of producing electricity from renewable sources like solar and wind has dropped significantly during the past five years, while rising for power generated from natural gas, coal and nuclear, according to the International Energy Agency. “The cost of renewable technologies — in particular solar photovoltaic — have declined significantly over the past five years,” the Paris-based IEA said in a report called Projected Costs of Generating Electricity. “These technologies are no longer cost outliers,” the report said. The median cost of producing so-called baseload power that is available all the time from gas, coal and nuclear reactors was about US$100 per megawatt hour for this year compared with about US$200 per megawatt hour for solar, which has dropped from US$500 per megawatt hour in 2010. The findings come as more than 190 nations intend to broker a new climate agreement in Paris in December to limit future fossil-fuel emissions.
MANUFACTURING
UK factories worried
Just under half of UK manufacturers are worried by the possibility of a sharp slowdown in China’s economy and one in 10 are reviewing their business plans, a survey from an industry group showed on Sunday. The UK Engineering Employers’ Federation (EEF) said 47 percent of manufacturers were concerned by signs of a slowdown in China, which have rocked financial markets over the past week. Big manufacturing firms were most likely to be worried and also more likely to be looking at their business plans to take into account different scenarios, the survey showed. “Overall, UK factories send only a small proportion of their goods to Chinese customers, but a sharper slowdown would also see a halt to growth in export sales through supply chains in Europe,” EEF chief economist Lee Hopley said.
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