Friday, January 20, 2017

Trump vows to end 'American carnage'; China growth slowest in 26 years; Gulf nations brace for budget cuts

1 Trump vows to end ‘American carnage’ (BBC) President Donald Trump has painted a bleak picture of a broken country after being sworn in as US president. He spoke of abandoned factories, 
rampant crime and a failed education system, pledging that his presidency would bring about change.

"This American carnage stops right here and stops right now," President Trump said on the steps of the Capitol. The moment marks the end of an improbable journey for the property tycoon after a campaign marked by controversy.

Shortly after the ceremony Mr Trump was seen signing his first official actions as the 45th president. He sent his Cabinet nominations to the Senate as well as a signed a proclamation for a national day of patriotism, according to Press Secretary Sean Spicer.

He also signed his first executive order as president, ordering federal agencies to ease the regulatory burdens associated with Barack Obama's health care laws, known as Obamacare, as the US Congress determines how to repeal and replace them.

He also signed into law a waiver allowing retired Marine General James Mattis, his pick for defence secretary, to serve in the post. The Senate has voted overwhelmingly to approve retired Marine general John Kelly as Mr Trump's secretary of Homeland Security.

The change of hands was reflected on the White House website, which was scrubbed of Mr Obama's policies and replaced with Mr Trump's new agenda. The Trump administration has only listed six issues on the website: energy, foreign policy, jobs and growth, military, law enforcement and trade deals. Critics pointed out the revamped site made no mention of civil rights, LGBT rights, healthcare or climate change.

2 China growth slowest in 26 years (Katie Allen in The Guardian) China’s economy slowed further last year to expand at its weakest pace for quarter of a century, with warnings that it risks losing further momentum in 2017 as Donald Trump’s presidency creates new challenges for the trading superpower.

The world’s second-largest economy grew 6.7% last year, according to China’s statistics office, meeting Beijing’s target range of 6.5-7% but the slowest growth since 1990. Figures for the final quarter of 2016 alone pointed to a small pick-up in pace at the close of the year.

But news that the fourth-quarter performance was bolstered by higher government spending and record bank lending fanned fears about China’s rising debt levels. Economists fear that debt could rise further this year if the government continues to inject stimulus into the economy to meet its growth targets regardless of a changing global economy.

Forecasters see the outlook for global growth as particularly uncertain, with a change of administration in the US, key elections in the eurozone, the UK embarking on Brexit negotiations and US interest rate rises all having repercussions for indebted emerging market economies. With China still struggling to rebalance its economy away from a reliance on manufacturing and exports, any slowdown in global trade will be keenly felt in the country.

3 Gulf nations brace for budget cuts (Issac John in Khaleej Times) Despite significant deficit-reduction efforts under way since 2015 in the backdrop of plunging oil revenues, all GCC countries are projected to record fiscal deficits in 2017 while making substantial budgetary cuts.

Analysts expect most GCC states to press ahead with substantial budgetary cuts from 30 per cent upwards in order to maintain balanced budgets regardless of signs of a gradual recovery in oil prices following the recent agreement among oil exporters to cut output.

Across the GCC, government financial assets have been drawn down as part of the deficit financing programmed over the past two years. After a significant withdrawal of financial assets in 2015, a larger portion of the 2016 fiscal deficits that amounted to about $193 billion was covered by issuing debt, analysts pointed out.

Bahrain, Oman, Qatar, Saudi Arabia, and the UAE have issued bonds and obtained syndicated loans in international markets this year. In a market overview, Value Partners analysts point out that while oil price drop has largely impacted GCC public finances and has hampered foreign direct investment, only the UAE has been capable to retrieve FDI to pre-crisis level with an increase of 117 per cent in 2015 compared to 2008.

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