Global
economy under threat
World economic recovery faces imminent
risk and policy makers have limited room for manoeuvre, UN analysts
warned.
Despite the 2001-02 shakeout in
equities and tech investment, impediments to a decisive return
to strong world economic growth in 2003 and beyond remain, in
the form of overcapacity, overvalued asset prices, shaky investor
confidence and macroeconomic imbalances, reports United Nations.
According to information supplied
by United Nations Information Centre (UNIC), following a slow
start, the world economy is expected to pick up steam in the
second half of 2003. After an expansion of only 1.7 percent
in 2002, the world economy is projected to grow by 2.75 percent
this year.
But in developed countries falling
equity values and weak business spending are constraining economic
recovery, with weak and volatile equity prices contributing
to the erosion of consumer and business confidence, said UNIC
based in Kathmandu.
Job
ads in Australia fall by 13.7%
The number of employment advertisements
in major Australian newspapers fell by 13.7 percent from November
to December, signalling a likely slowing of job growth for the
first months of 2003, analysts said on recently.
The seasonally adjusted figures
compiled by the ANZ bank showed a weekly average of 19,032 job
ads in December, down by 2.4 percent from a year earlier.
In November job advertisements
were down by 2.6 percent from October but up by 14.7 percent
year-on-year. Four non newspaper Internet sites carried a seasonally
adjusted average of 66,883 job advertisements per week in December,
down by 2.8 percent from November but up by 14.4 percent year-on-year,
ANZ said.
The total number of job advertisements
in newspapers and on the Internet in December was down a seasonally
adjusted by 5.4 percent from November to 85,915 but rose by
10.2 percent year-on-year.
ANZ chief economist Saul Eslake
said that taken at face value, the fall in December job advertisements
pointed to a significant slowing in employment growth during
the first few months of 2003.
US
economy grew by 4%
The US economy grew at a healthy
4 percent rate from July through September, the government has
said, but analysts remained concerned that rising unemployment
and weak consumer spending will trim growth to just half that
amount in the current quarter.
The Commerce Department's final
estimate of activity in the July-September showed no change
in the overall figure from the figure released although individual
components of growth shifted slightly.
Consumer spending rose at an even
faster 4.2 percent rate with purchases of big-ticket items stich
as cars surging ahead at a 22.8 percent, reflecting cut rate
financing offers. But economists are worried that sales during
the all important Christmas season have dropped off considerably,
in part because of consumer anxiety about rising unemployment,
which returned to an eight-year high of 6 percent in November,
and worries about the economic impact of a possible war with
Iraq. Many economists believe growth in the current October-December
will slip to around 2 percent with the most pessimistic saying
it could come in under 1 percent. The concern is that with growth
slowing so much, any type of jolt could push the country back
into a full-blown recession. "If we asume a pretty quick and
decisive war, then the economy should do well," said Sung Won
Sohn, chief economist at Wells Fargo in Minneapolis. "But if
we have a messy and costly war with a big rise in oil prices,
then we could have another recession."
US
companies ready to boost investment in Russia
US energy companies are ready to
pour billions of dollars into developing the vast untapped oil
and gas fields in northern Russia, but the country's shady investment
climate continues to scare off many potential investors, the
US ambassador to Moscow said recently.
"American business are afraid to
do business on the Russian market because of the weak legal
protection offered to foreign investors," Alexander Vershbow
was quoted by ITAR TASS in Russian as saying.
Vershbow told the news agency US
companies were "ready to invest billions of dollars in projects"
on Russia's Sakhalin island and in the far north.
"The energy sector is the most
promising area for the development of Russian-American economic
relations," Vershbow said. He also said economic reforms carried
out in the past two years had improved Russia's investment climate,
and reiterated US support for Russia's membership in the World
Trade Organization.
British
trade deficit hits new record high
The British trade deficit was driven
up to a new record high in November by dwindling exports, particularly
crude oil shipments to the United official figures showed recently.
The global trade in goods deficit
widened to 3.98 billion pounds (6.1 billion euros, 6.4 billion
dollars) in November from a revised shortfall of 3.63 billion
the previous month, the National Statistics office said.
The deficit, the highest since
records began in 1697, was fueled by a 6.5 percent fall in exports
to non-European Union countries, notably crude shipments to
the United States, the office said. The size of the shortfall
surprised economists. Consensus forecasts had been looking for
a figure of 3.1 billion pounds.
The trade deficit with non EU countries
increased to 3.07 billion pounds in November from a revised
shortfall of 2.38 billion in October.
With its economy motoring along
at a brisker pace than many of its trading partners, the value
of Britain's imports of goods have overshot that of its exports,
which have been crimped by a strong pound and weak global economy.
Manufacturing
activity index falls in France
French manufacturing activity declined
in France last in December in the face of weakening demand a
purchasing managers index revealed recently.
The index, compiled by CDAF group
of purchasing and supply managers, fell to 48.7 in December
from 49.6 in November and 49 in October.
The new decline reflects lower
readings in sub-indices covering production, new orders, employment,
supplier deliveries and inventories.
The CDAF said that demand and overall
manufacturing output fell back in December "after both had shown
signs of a potential recovery."
It added that many companies had
reduced output in order to cut costs.
"These costs cuts, which are necessary
in an unfavorable economic climate, were implemented by drawing
on existing stocks in order to meet sales requirements," the
CADF said.
