Thu, Jan 16, 2020 - Page 10 News List

World Business Quick Take

Agencies

GERMANY

Economic growth slows

The economy expanded at the slowest pace in six years last year, when manufacturing took a battering and the country was dragged to the brink of a recession. Expansion was just 0.6 percent amid trade tensions and a broader slowdown in demand that added to fundamental structural challenges the country is battling. Automakers including Volkswagen AG are facing a critical period as they push sales of electric vehicles, while manufacturers such as Siemens AG are under pressure to adapt to climate change. Geopolitical uncertainty in the Middle East and continued risk of a disruptive Brexit are also weighing on sentiment and momentum. That means while last year was a year Germany will want to forget, the outlook for this year is barely any better. Economists see growth accelerating to only 0.7 percent this year.

CHINA

Holiday cash infusion

The nation added liquidity to the financial system yesterday, helping to offset a cash squeeze ahead of the Lunar New Year holiday. It kept interest rates on the loans unchanged. The People’s Bank of China added 300 billion yuan (US$43.56 billion) through the medium-term lending facility at 3.25 percent, according to a statement from the central bank. It also injected 100 billion yuan through open market operations after a 15-day hiatus, selling 14-day reverse repurchase agreements at 2.65 percent. Some 257.5 billion yuan of targeted medium-term loans are to mature on Thursday next week. “The liquidity injection from the previous RRR [required rate of return] cut wasn’t enough to fill the gap in January because of the earlier Chinese New Year holiday season, heavy bond issuance and tax payment,” Oversea-Chinese Banking Corp economist Tommy Xie (謝東明) said. “The offering is not a surprise.”

SOUTH KOREA

Employment at record high

The employment rate hit a record high last year, offering President Moon Jae-in evidence that he is delivering on his pledge to provide more jobs, ahead of a parliamentary election. The employment rate climbed to 60.9 percent last year, matching a previous high set in 1997, statistics office data showed yesterday. At first glance, the rate, boosted by an increase in part-time work, appears to contradict the view among Moon’s opponents and some economists that his policies, including a higher minimum wage strategy, have priced people out of work. Still, the jobs growth relied heavily on part-time and elderly workers, a fact which casts doubt on the real strength of the recovery in the labor market and its effectiveness in boosting consumption.

BRAZIL

OECD membership coming

The government on Tuesday welcomed the US’ change of stance to support its bid to join the Organisation for Economic Co-operation and Development (OECD) ahead of Argentina. The US plans are a win for President Jair Bolsonaro, who has sought closer ties with Washington since taking office last year. Backing Brazil’s path to joining the OECD had been seen by many as a tangible benefit of the ideological similarities between Bolsonaro and US President Donald Trump, who have sought to cast aside years of trade spats and political distrust between their two nations, and build a tighter relationship. OECD membership is seen as a stamp of approval that would boost investor confidence in the government and economy.

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