Showing posts from October, 2018

$6B In Saudi Aid To Pakistan

Imran Khan - the newly elected PM of Pakistan - grabs $6B in aid money from MBS led Saudi Arabia. In the Kingdoms current quagmire MBS is no doubt happy to lend a hand to the Pakistan premier. The relationship goes back to the first days of Pakistan in 1947 and is often described as a special relationship. Perhaps this will allow the Saudis to finally insert Pakistani troops into Yemen. 
The foreign misdirect issued an official statement: 
At the invitation of the Custodian of the Two Holy Mosques, His Majesty, King Salman bin Abdulaziz, the Prime Minister of the Islamic Republic of Pakistan, Mr. Imran Khan visited Saudi Arabia to participate in the Future Investment Initiative (FII) Conference on 22-23 October 2018. During the visit, the Prime Minister had detailed bilateral discussions with His Majesty, King Salman bin Abdul Aziz, and His Royal Highness, Crown Prince Muhammad bin Salman. The Crown Prince agreed to the Prime Minister’s suggestion to reduce visa fee for Pakistani worker…

Economic Snapshot For Turkey: In Deterioration

The outlook in Turkey has worsened.

Recent indicators suggest the economy slowed sharply in the third quarter. Consumer and business confidence continued to plummet in September and are now both firmly in negative territory, while in the same month the manufacturing PMI sank lower on stronger contractions in output and new orders. Moreover, annual retail sales growth reached an over one-year low in July. Retail sales likely softened further in the remainder of Q3, on higher inflation and weaker sentiment. On the plus side, the gaping current account deficit has begun to narrow thanks to the weaker currency and softer domestic demand. This comes after recent figures show that growth held up well in the second quarter, buoyed by a stronger external sector, a pre-election government spending boost and robust private consumption. On the political front, in late September Treasury and Finance Minister Berat Albayrak, presented the much-anticipated New Economic Plan, which sets o…

China 2019 Growth Pegged At 6.3%

Looking ahead, economic growth is expected to decelerate. This reflects China’s more mature economic cycle and the impact of previous economic reforms, as well as the tit-for-tat trade war with the United States and the cooling housing market. However, a looser fiscal stance and a more accommodative monetary policy should cushion the slowdown. FocusEconomics panelists see the economy growing 6.3% in 2019, which is unchanged from last month’s forecast. In 2020 the economy is seen expanding 6.1%.

The People’s Bank of China (PBOC) uses a complex system to implement monetary policy, including the use of key benchmark rates, open market operations and reserve requirement ratios. On 6 October, the Bank announced a cut of 100 basis points to the reserve requirement ratio for most banks, which will release around CNY 750 billion. The move is intended to spur credit growth amid softening economic conditions. Panelists expect that the one-year deposit and lending rates to close 2019 at 1.52% a…

China Trade War To Escalate

Geopolitical tensions are at a boiling point, and despite the slight reprise for the upcoming elections there is no end in sight. - CH
“The world should brace for an escalation in the trade war between China and the US following the American mid-term elections, that could see Donald Trump test the strength of Chinese resolution with steeper tariffs”...More @ GlobalMarkets
Photo from Port Cities London

A Look Inside China's Healthcare System

Does China has universal health care? In a way yes, but it is a combination of a few programs in theory. These programs range from the UK, US and German models. China runs a mixed system with additives, much like the US VA program. In fact, you can even buy a ticket for around $10.00 and access mega-hospitals in the city centers of China and have consultations with the countries supreme specialists at will. What could be be the draw back? You may wait for hours. 
"How to provide health care for millions of people is a question that has vexed countries and governments around the world. It’s a modern notion, but nowadays we take for granted the idea that people have the right to access health services, regardless of their wealth or social standing. We also demand that the government play some role in keeping people healthy. Americans have been arguing about whether medical insurance should be mandatory. In the UK, people are more worried that their free-for-all health care, the Na…

Will Italy Default? Italian Budget Concerning Investors

At the time of writing, the Italian government budget deficit target is 2.4% in 2019, 2.1% in 2020 and 1.8% in 2021. This misses the ECB target of 1.6% each consecutive year. Politicians are hoping to stimulate the country’s lacklustre economy and fulfil pre-election pledges including: the introduction of a guaranteed basic income; the adoption of a flat rate of income tax and the repeal of the previous government’s pension reforms. For the Five Star Movement, the agreement to enlarge the budget deficit and implement their flagship policies is an important step forward, as polls suggest that the party has been losing ground to its coalition partner. However, Italy’s fiscal space is already limited and, despite running a primary surplus, the government’s debt repayments equate to roughly 4% of GDP. According to Fathom calculations, the coalition’s current spending plans would see government debt hit 134% of GDP in 2020. Markets have taken a dim view of the proposed fiscal expansion an…

Greece: Outlook Is Stable

October 2018: Greece is now in a stable status. 

The economy lost pace in the second quarter as domestic demand waned. Sustained austerity measures and sky-high unemployment dented private consumption growth, despite signs of a moderate improvement in the labor market. In addition, public spending dipped in the quarter as the government remained committed to its fiscal consolidation plans. On a brighter note, booming inbound tourism propped up the external sector in the quarter. Available economic indicators appear more upbeat for the third quarter: economic sentiment shot up to an over four-year high in August, and a solid outturn by the manufacturing sector buoyed otherwise lackluster industrial output growth in July. On the heels of exiting its third government bailout, on 28 August, Prime Minister Alexis Tsipras reshuffled his cabinet. The reshuffle involved few key posts and was likely aimed at shoring up government support before next year’s election.
Hard-earned momentum shoul…

Italy: Outlook Moderates, October 2018

Italy’s economic recovery moderated further in the second quarter, weighed on by a weak external sector and anemic consumer spending. This was despite the significant rebound in fixed investment, on the back of robust growth in transport equipment and rising housing investment. Monthly data for the third quarter, meanwhile, suggests the economy has shifted into a lower gear. In July industrial production contracted significantly, as was seen more broadly across the Eurozone, while in August economic sentiment cooled and the manufacturing sector neared stagnation. As for household spending, retail sales dropped in July and consumer sentiment dipped in August. Nevertheless, sentiment remains positive and, although the level of employment dropped, the unemployment rate fell to its lowest levels in over six years in July. This, coupled with the formation of a government in June, could have supported spending in Q3. However, ongoing 2019 budget negotiations within the government continue …