Tuesday, May 31, 2016

For fourth year, world tourism rises faster than trade; India stays fastest-growing economy; Profit for Volkswagen despite scandal

1 For fourth year, world tourism rises faster than trade (BBC) The UN World Tourism Organisation says tourism spending has outpaced global trade for the fourth year in a row. The US followed by China are the world's most popular destinations, followed by France and Spain.

According to the UNWTO's figures, released earlier this month, international tourism grew by 4% in 2015 generating $1.4trn. In comparison, global trade increased by just 2.8% in 2015 according to the World Trade Organisation.

In 2015, tourism accounted for 7% of the world's total exports up from 6% in the previous year. Tourism spending, which includes accommodation, food, entertainment, and services, has helped to offset drops in exports that have occurred as commodity prices have fallen.

Falling commodity prices have lowered the overall value of imports for many countries. According to the CPB Netherlands Bureau of Economic Policy Analysis, 2015 was the worst year for world trade since 2009.

The increase in international tourism came even as attacks at transportation hubs and on airlines raised concerns about travellers' safety. The US and China, along with the UK were the leading sources for outbound travellers. The number of outbound tourist from China has risen every year since 2004 with their spending increasing by 25% last year.

2 India stays fastest-growing economy (The Times of India) India gathered momentum from January to March to extend its lead as the world's fastest growing large economy, helping Prime Minister Narendra Modi craft an impressive sales pitch for meetings with investors in the US next week.

Having swept to power two years ago promising to revitalise Asia's third-largest economy, Modi has boosted spending on defence and infrastructure, while consumer demand has risen thanks to lower interest rates. Those pro-growth policies helped gross domestic product grow a faster-than-expected 7.9% year-on-year in the March quarter, faster than the December quarter's 7.2%.

India's growth has overtaken that of fellow Asian giant China, which grew 6.7% in the March quarter - the slowest in the world's second largest economy in seven years. The figures from India's Statistics office also showed GDP grew 7.6% in the 2015/16 fiscal year that ended in March, faster than a 7.2 percent growth in the previous year.

Modi has tried to stimulate corporate capital spending through debt-fuelled higher public spending. Still, capital investment fell an annual 1.9 percent compared with a 1.2 percent growth in the December quarter.

Growth in the March quarter was driven by a rebound in farm output, an improvement in mining and a sharp pickup in electricity production. The farm sector grew by 2.3% from a year ago compared with a 1.0% contraction in the December quarter.

3 Profit for Volkswagen despite scandal (San Francisco Chronicle) German automaker Volkswagen saw its net profit fall 19 percent in the first three months of the year — but showed it can still make money even as it grapples with a costly scandal over cars rigged to cheat on diesel emissions tests.

The company called it a "respectable" result considering the tough conditions and said it had the financial resources to weather the scandal. The flagship Volkswagen brand, the one most associated with the scandal and with the most rigged cars, barely broke even. The company made most of its profits at its luxury brands Audi and Porsche and the financial services branch.

Profits in the January-March period fell to 2.37 billion euros ($2.63 billion) from 2.93 billion euros a year earlier, the company said Tuesday. The figure fell short of the 2.44 billion euros expected by analysts surveyed by financial information provider FactSet. Revenue fell 3.4 percent to 50.96 billion euros due in part to shifts in currency exchange rates.

Still, the company reported it had bulked up on its cash reserves and said it was well-funded to deal with the effects of the scandal, which include costs for recalls, fines and lawsuits. The automotive division was sitting on 26 billion euros in net liquidity, up 5 billion from a year ago. Tuesday's earnings release contained no new estimate of the overall cost of the scandal; the company set aside 16.2 billion euros from earnings last year, when it lost 1.4 billion euros.

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