Wednesday, May 31, 2017
Canada leads growth among G7 nations; Lacklustre growth for India; UAE among top 10 competitive countries
1 Canada leads growth among G7 (Simon Goodley & Phillip Inman in The Guardian) The UK has slumped to the bottom of the league table of advanced economies after Canada registered stellar growth in the first three months of the year.
Canada was the final member of the G7 to report its growth figures, which confirmed the UK as officially the joint worst performing member so far this year. The announcement marked a significant decline for the UK economy, which a year ago was outshining Germany, the US and Japan. In February it was announced that Germany had pipped the UK as the fastest-growing G7 nation during 2016 by 10 basis points.
However, the latest figures for Canada, which showed that growth accelerated to 0.9% in the first quarter, putting it top of the G7 performers, has left Britain languishing alongside Italy at the bottom of the table. Germany is in second spot at 0.6%, followed by Japan with 0.5%, France 0.4% and the US at 0.3%. The UK and Italy are then level on growth of just 0.2%.
The sluggish expansion in the first quarter provides the latest evidence that the early resilience to the EU referendum result last June is now wearing off as higher inflation puts consumers under pressure. Prices have been increasing since the Brexit vote because the referendum result sent the pound sharply lower and has raised the cost of imports to the UK. That higher inflation has hit household budgets and dented the main driver of UK growth, consumer spending.
2 Lacklustre growth for India (Khaleej Times) India's growth slowed to 7.1 per cent last year, according to official data, weaker than analysts expected but still the fastest rate of growth of any major economy. GDP growth for the 12 months ended March 31 was well below a revised figure of eight per cent for the previous year, and follows the government's shock move last November to ban most of the currency in circulation.
However the country of 1.25 billion is still reporting faster growth than rival China, at 6.7 per cent in 2016. Prime Minister Narendra Modi has defended his move to remove all Rs 500 (around $7.50) and Rs 1,000 notes from circulation as a necessary strike against corruption. The government argues it will boost revenues by dissuading people from using cash, which makes it easier to avoid tax.
The move hit cash-dependent sectors like real estate, jewellery and agriculture, and triggered massive lines outside banks in the weeks afterwards as authorities struggled to print replacement notes fast enough.
In a report earlier this week the World Bank said the fundamentals of India's economy remained strong and predicted an uptick in the economy with a national goods and services tax due to be introduced on July 1. The move will likely "yield substantial growth dividends from higher efficiencies" and increase state revenues in the long term, according to the bank.
3 UAE among top 10 competitive countries (Babu Das Augustine in Gulf News) The UAE made it into the coveted list of the ten most competitive countries in the world in the 2017, according to the IMD World Competitiveness Yearbook.
This year, the country improved its ranking by five positions from its 2016 overall global competitiveness ranking of 15th, securing a place among the world’s top ten most competitive nations. This year 63 countries are ranked, with Cyprus and Saudi Arabia making their first appearance.
Hong Kong has taken the top spot for the second year running. Switzerland and Singapore came in second and third, with the US placed fourth, its lowest position in five years and down from third last year. The Netherlands completed the top five, jumping three places from eighth last year.
The UAE’s achievement looks more emphatic as it has surpassed some of the world’s developed countries such as Norway, Canada, Germany, Taiwan and Finland — in 11th to 15th positions respectively — on the overall global competitiveness index. The indicators that stood out among the most improved countries are related to government and business efficiency as well as productivity.
Globally, the bottom of the table in competitiveness is largely occupied by countries experiencing political and economic upheaval. Among these are Ukraine (60), Brazil (61) and Venezuela (63).