Saturday, July 23, 2016

IMF wants more govt spending as rate cuts lose impact; Climate change as dangerous as terrorism; North Korea economy shrinks most in 8 years

1 IMF wants more govt spending as rate cuts lose impact (The Guardian) The International Monetary Fund has called on G20 nations to boost government spending as the impact of ultra-low interest rates begins to reach its limits in developed countries.

“Global growth remains weak, and downside risks have become more salient,” the IMF said in a report released ahead of the G20 meeting. “Growth could be even lower if the current increases in economic and political uncertainty in the wake of the ‘Brexit’ vote continue.”

In an update to its April forecast, the IMF lowered its forecasts for global growth this year and next by 0.1%, to 3.1% and 3.5% respectively. The British chancellor, Philip Hammond, is among those attending to deliver a message that his country is still “open for business”.

But the IMF wants advanced economies like Germany and the US to channel more public spending into infrastructure investment to help boost global growth, an issue that has sparked divisions among G20 members. At an earlier G20 meeting in February, finance ministers vowed to use “all policy tools” – monetary, fiscal and structural – to support economic growth.

Other challenges besides Brexit included what one official attending referred to as the “Three Ts” – terrorism, Turkey and Trump.


2 Climate change as dangerous as terrorism (San Francisco Chronicle) US Secretary of State John Kerry has said that climate change is as dangerous as, if not more, than the threats posed by the Islamic State and other extremist groups.

Kerry said the issue might not get as much public attention as terrorism but that the meeting is as important as a gathering he hosted last week in Washington on combatting the Islamic State.

"What you are doing here right now is of equal importance, because it has the ability literally to save life on this planet," Kerry told the conference of parties to the 1987 Montreal Protocol, a global treaty to end the use of many chlorofluorocarbons from aerosols and refrigerants that deplete the ozone layer.

Treaty members have claimed some success — including a healing of an ozone hole over Antarctica. They are now trying to adopt an amendment that would phase out substances that replaced chlorofluorocarbons, called hydrofluorocarbons. They trap more heat than carbon dioxide but are less plentiful.


3 North Korea economy shrinks most in 8 years (BBC) North Korea's economy shrank at its sharpest pace in eight years after a fall global commodity prices hit the value of its coal and iron ore exports.

Gross domestic product fell by 1.1% last year compared to a 1% gain in 2014, according to an estimate from South Korea's central bank. The Bank of Korea has released the data annually since 1991 using information supplied from sources such as the Ministry of Unification.

North Korea does not publish any data. The worsening economic picture may put pressure on North Korean leader Kim Jong Un. Pyongyang is facing heavy international sanctions because of its continued provocations such as missile launches and nuclear threats.

North Korea's exports fell by 14.8% last year in annual terms, mostly due to a slump in mineral product shipments. Imports slid by 20%, versus an increase of 7.8% in 2014. However, construction and services are believed to have gained last year.


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