Germany’s manufacturing economy turned out 1.3 percent less value in June than in May, bringing its three-month slide to production levels 6.8 percent smaller than in February 2020, the country’s statistics agency reported. Materials shortages and kinks in supply chains caused the drop, the agency said. Short of computer chips, Germany’s vehicle makers shrank output...
Category: TRENDS ON THE GLOBAL ECONOMIC FRONT
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TOURISTS’ ABSENCE CRIPPLES EMERGING MARKET ECONOMIES
For the second consecutive summer, emerging nations are facing an absence of the tourists that have been the lifeblood of their economies, which already are burdened by debt and drained by the cost of fighting the COVID War, the Financial Times reported. In January through May, international arrivals were 85 percent fewer than 2019’s 540...
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OIL MAJORS WITHHOLD INVESTMENT IN NEW PRODUCTION
Despite returning to healthy profits in the second quarter, major oil companies have scaled back spending to increase production. ExxonMobil reported second-quarter profits of $4.7 billion after losing $1.1 billion during the same period in 2020; Chevron profited by $3.1 billion against a loss of $8.3 billion a year earlier. French oil giant TotalEnergies [sic]...
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EUROPE’S ECONOMY GREW FAST: WILL IT SLOW DOWN?
The Eurozone’s economy grew at 2 percent in this year’s second quarter after contracting in the first, outpacing both China and the U.S. and passing the 1.5 percent forecast by economists Reuters had polled. The U.S. GDP edged up 1.6 percent for the period, China’s 1.3 percent, the countries reported earlier. Lockdowns were lifted, vaccination...
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THE GLOBAL ECONOMY IS ALL ABOUT INFLATION NOW
Central banks around the world insist that today’s galloping inflation will slow to a walk as suppliers and transportation fleets smooth out disruptions created by the economic crisis. However, those “transitory” price hikes are reshaping the global economy right now. Germany’s July inflation rate of 3.1 percent was the highest since 2006, the Federal Statistics...
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WORLD’S ECONOMY RETURNED TO PRE-CRISIS LEVELS: NOT FOR LONG
China’s economy righted itself to pre-crisis levels last year, the U.S.’s in this year’s second quarter, and with Europe’s 8.3 percent second-quarter expansion, the world’s economy as a whole has likely returned to pre-crisis levels of productivity, economists at Capital Economics and Oxford Economics told The Wall Street Journal. Successful vaccination campaigns and massive government...
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CHINA’S DIGITAL YUAN COULD CHALLENGE DOLLAR’S LEADERSHIP
China’s development of a digital yuan could threaten the dollar’s position as the world’s leading currency. (See “Dollar Under Assault as World’s Reserve Currency,” Trends Journal, 1 June 2021.) Although 80 countries are developing digital versions of their national currencies, China already has tested its version with a million Chinese consumers and is ready to...
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RUSSIA BOOSTS INTEREST RATE TO 6.5 PERCENT
To head off further inflation, Russia’s central bank has raised its benchmark interest by a full point, its largest single rate increase in six years, and the fourth in recent months. (See “Russia Raises Interest Rate to Tamp Down Inflation,” Trends Journal, 15 June 2021.) The Bank of Russia has raised its rate by 2.25...
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WILDFIRES WORSEN LUMBER SHORTAGES
Starting Monday this week, Canfor Corp., one of the continent’s largest lumber producers, has been forced to cut back production at its British Columbia mills because hundreds of wildfires across western North America have cut the supply of timber, the company said. The company’s 10 mills will reduce output by about 115 million board feet...
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FROSTS ENDANGER BRAZIL’S COFFEE CROP; PRICES SPIKE
Futures prices for Brazil’s 2022 arabica coffee harvest rose past $2 a pound last week, a level not seen since October 2014, as freezing temperatures frosted crops in the country’s three largest growing regions and sparked fears of a poor yield. Frosts were worse than predicted; temperatures fell as low as -5°C, or 23°F. Even...