1 Recession-hit Venezuela seeks help (BBC) Venezuelan
President Nicolas Maduro is beginning an international tour to try to stem the
impact of falling oil prices and a deepening recession. Mr Maduro goes first to
China - a major source of loans for Venezuela - for talks with the Chinese
President, Xi Jinping. He will then travel to various Opec member countries to
press for cuts in oil output that would boost prices.
Venezuelan oil prices have dropped by half since
June. The country gets most of its foreign currency from oil exports and is
estimated to have the largest oil reserves in the world. Before he left
Venezuela Mr Maduro announced a number of new mechanisms aimed at addressing
the country's economic crisis.
He said he would create a strategic reserve, appoint
a new board to run the organisation that manages currency exchange controls,
and create new agencies to manage the distribution of commodities. The
Venezuelan opposition blames the country's economic crisis and shortages of
many staples, such as corn oil and milk, on the socialist policies of Mr Maduro
and his late predecessor, Hugo Chavez.
2 Record FDI pledges for South Korea (Straits Times)
South Korea received a record high $19 billion in pledges of foreign direct
investment during 2014, government data showed on Monday, as interest from
Europe and China surged.
The total is 30.6 percent higher than in 2013, when
there were pledges of about $14.6 billion, according to data from the Ministry
of Trade, Industry and Energy. Pledged inflows from the European Union, the
largest foreign investor in South Korea, grew 35 per cent to $6.5 billion while
those from China rose 147 per cent to $1.2 billion.
During 2014, there was a broad agreement on a free
trade deal between China and South Korea with a promise to officially sign the
deal in the coming months. That was a catalyst for a surge in investments from
China, the ministry said in a statement.
3 Borrowing boom a ticking time bomb for UK plc (Phillip
Inman in The Guardian) The latest borrowing figures has set alarm bells
ringing. Consumer credit figures from the Bank of England revealed Britons
ended the year slapping their credit cards on shop counters as if the financial
crisis was a distant memory.
Borrowing on credit cards and unsecured loans grew
in November at its strongest pace since 2008. We knew that retail sales had
surged that month and now we knew why. Mortgage borrowing added to the credit
boom, piling another £2.1bn on the debt mountain in November.
At the same time the central bank was publishing its
credit figures, a survey of factory managers could only be described as
depressing. Yet again, just as the sector appeared to be finally recovering
from the great crash, the momentum has tailed off.
It may seem uninteresting to economists who just
watch the debt total decline that a large minority of poorer and younger households
are ramping up their debt-to-income ratio, but it is the key for the economy’s
survival in the next crisis. As countless studies have shown, the stability of
the country is not based on the large number of people and businesses who
either own assets outright or have low borrowings, but on people who borrow up
to the hilt and go bust at the merest hint of impending crisis, hitting
consumer spending and dragging down house prices.
Worse could be to come should consumer borrowing
continue to spur growth in 2015. As James Knightley, UK economist at ING
Financial Markets, said: “With the economy looking set to expand by 3% this
year and debt levels creeping higher once again we suspect that the BoE will be
looking to tighten monetary policy from the third quarter of 2015 onwards.
No comments:
Post a Comment