Finance ministers meet
EU finance ministers are in Luxembourg to take stock of the debt crisis before a summit of EU leaders later this month. The 17 eurozone ministers yesterday were scheduled to look at Greece’s budget proposals. They were to hear from the troika — the European Commission, the European Central Bank and the IMF — about its negotiations with the Greek government. No final troika report will be submitted, so no decision on a new payout of aid will be made.
Exports rise by 2.4 percent
Official data show that exports from Germany, Europe’s biggest economy, were up 2.4 percent in August compared with the previous month — the second consecutive increase. The Federal Statistical Office said yesterday that Germany exported goods and services worth 95 billion euros (US$124 billion) in August in calendar-adjusted terms; the gain followed a 0.4 percent increase in July. German imports were up 0.3 percent at 76.7 billion euros, following an identical gain in July, so that the seasonally-adjusted trade surplus grew to 18.3 billion euros in August from 16.3 billion euros in July.
Economy to contract: BOF
The Bank of France (BOF) said yesterday that the economy likely contracted by 0.1 percent in the third quarter of this year in its final estimation. If the estimate is confirmed by France’s official statistical agency INSEE, it would be the first quarterly contraction since the country exited recession in the spring of 2009. INSEE’s chief forecaster said last week that the agency believes France will continue to escape recession, but stagnate with zero growth in the third and fourth quarters, as opposed to its previous forecasts in June of 0.1 percent and 0.2 percent growth respectively.
Jobless rate holds steady
Swiss unemployment held steady last month, suggesting companies are holding onto their employees even as the economy cools. The jobless rate, adjusted for seasonal swings, remained at 2.9 percent, the State Secretariat for Economic Affairs in Bern said in an e-mailed statement yesterday. That is below the median forecast of 3 percent by 11 economists in a Bloomberg News survey. Unadjusted unemployment was also unchanged from August at 2.8 percent.
India to reduce deficit
Finance Minister P. Chidambaram said yesterday the government was working on “a credible and feasible” plan to reduce its yawning budget deficit, which has alarmed investors and ratings agencies. The government’s annual budget in March, which saw a deficit target of 5.1 percent of GDP for this year, has been hit by a slump in tax revenues. Chidambaram also said he expects economic growth to increase from the 5.5 percent registered in the first fiscal quarter.
Analysts report on China
China needs to expand the access local governments have to private capital for funding about 19 trillion yuan (US$3 trillion) of investment projects they have announced since May, JPMorgan Chase & Co analysts wrote. Slowing economic growth and central government limits on lending to local authorities and the property sector have created “headwinds” for local governments’ “traditional” funding sources that include fiscal revenue, land sales and bank borrowings, according to the JPMorgan report dated on Friday.