1 The emerging economy gloom (Andrew Walker on BBC)
Emerging economies are slowing down. China is by far the biggest of them, and they
are as a group experiencing weaker growth than in the recent past.
In its latest World Economic Outlook report, the IMF
forecasts that, as a group, the emerging and developing economies will register
slowing growth in 2015 for the fifth consecutive year. That forecast is 4%, the
lowest since the financial crisis in 2008. In 2010 the figure was 7.5%. So what
is going on?
China accounts for 30% of the combined economic
activity of the emerging and developing economies. But China matters for
another reason. It's one of the key reasons why so many others have seen their
growth rates decline. China is a leading buyer of the commodities that many
other countries in this group produce - industrial raw materials such as oil,
copper and iron ore, and food commodities as well.
The slowdown is not just about China and
commodities, however. In many countries ageing populations are a factor. And
the recovery of rich countries from the financial crisis has been persistently
lacklustre. They have not provided the "pull" in the shape of demand
for emerging economies' goods that a return to pre-crisis growth would have.
That doesn't mean a financial crisis is imminent,
but emerging economies are an increasing cause for concern. There has been a
credit boom. Private sector debt has risen especially strongly compared with
past trends in China, Thailand and Turkey among others. There is also an issue
in some countries about foreign currency borrowing. It's particularly high in
Hungary, Indonesia, Mexico and Chile.
Some of the countries concerned have their own
internal problems. Political issues, domestic and international have infected
economic performance. In the case of Russia, the conflict with Ukraine and the
western sanctions that followed have hit the economy. In Brazil, there is the
corruption scandal over contracts awarded by the majority state-owned oil
company Petrobras. The affair has done further damage to an economy that was
already vulnerable.
For next year, the IMF is predicting that they will
manage to put an end to the pattern of slowing growth and expand somewhat more
rapidly. That said, it is the emerging economies that are displacing the
developed nations as the most troubling cloud on the economic horizon.
2 IMF sees world stuck in ‘new mediocre’ gear
(Sydney Morning Herald) Central banks
have little room for error in a low-growth world in which over-stretched and
commodity-dependent emerging economies and a slowing China are major risks, top
international financiers told the International Monetary Fund's meeting.
The world is stuck in a "new mediocre"
growth pattern, IMF chief Christine Lagarde said, and that despite the $7
trillion in quantitative easing measures from banks in industrial nations since
the global financial crisis. In a bid to shore up finances and punish companies
that exploit differences in tax regimes, governments pushed ahead with plans to
improve tax collection.
The IMF meeting comes as the Bank of Japan looks
poised to extend its money printing program, known as quantitative easing, as
it stares down the barrel of a fifth year of recession. The European Central
Bank is also expected to extend quantitative easing, while the two major
central banks closest to raising rates, the US Federal Reserve and the Bank of
England, are holding their fire.
The IMF has urged the Fed and the Japanese and
European central banks to wait for more signs of recovery before tightening.
Lagarde on Thursday repeated her plea to Yellen to stay her hand. While the
world's central banks' money-printing programs have staunched losses in the
financial sector, they have failed to reach their goal of boosting global
credit.
With widening current account balances and excessive
lending to local companies, the IMF estimates that emerging market companies
have over-borrowed by the equivalent of 15 per cent of their economic output,
raising the risk of a sudden collapse in credit and of banking crises.
The IMF cut its estimate for growth in emerging
economies for a fifth successive year this week, citing the collapse of the
"commodities supercycle" in which buoyant demand for raw materials
had boosted prices.
3 China’s smoking epidemic (The Guardian) Smoking
will kill about two million Chinese in 2030, double the 2010 toll, according to
researchers who warned of a “growing epidemic of premature death” in the
world’s most populous nation.
On current trends, one in three young Chinese men
will be killed by tobacco, the team wrote in The Lancet medical journal. Among
women, though, there were fewer smokers and fewer deaths. “About two-thirds of
young Chinese men become cigarette smokers, and most start before they are 20.
Unless they stop, about half of them will eventually be killed by their habit,”
said the article’s co-author Zhengming Chen from Oxford University.
China consumes over a third of the world’s
cigarettes, and has a sixth of the global smoking death toll. “The annual
number of deaths in China that are caused by tobacco will rise from about one
million in 2010 to two million in 2030 and three million in 2050, unless there
is widespread cessation,” the researchers wrote.
The 2010 death toll was made up of some 840,000 men
and 130,000 women in China, which has a population of about 1.4 billion. Smokers
have about twice the mortality rate of people who never smoked, with a higher
risk of lung cancer, stroke and heart attack.
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