The United Kingdom (UK) joins the United States in losing its AAA credit rating from S&P.
The credit agency announced its downgrade of the UK on Monday, shortly after Moody’s cut the outlook on Britain’s economy. “In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the U.K.,” the ratings agency said in a press release.
South Korean officials contend that the Brexit vote will have a slight impact on the economy, according to The Hankyoreh. The government is also concerned about the U.S. Federal Reserve’s potential interest rate hike and troubles within the shipbuilding industry. The South Korean economy is also plagued by low exports, a weak job market/ and corruption.
A number of economic indicators released recently point to a weakening American economy. Americans are buying fewer services, manufacturing activity is down, and America’s trade deficit—along with the rest of the world—is growing.
In June, services demand fell, according to a new study by Markit Economics. The Markit flash services Purchasing Managers Index (PMI) saw a slight increase to 51.3, which Markit calls a “subdued” increase from the prior month’s 51.2 reading.
The surprise announcement last week that Raghuram Rajan, Governor of the Reserve Bank of India, was stepping down sent shockwaves around the world. Rajan, a brilliant academic who came from the University of Chicago to take up the appointment under the Singh government, was credited with stabilising the economy and turning inflation around. He is an outspoken champion of both economic and social reform. When push came to shove, he chose to go.
After two years of the Modi government, the Indian economy presents a mixed picture. Despite claims that it is the fastest growing large economy in the world, doubts linger about its actual health.
These doubts stem from confusion about GDP estimates since the new series was announced in January 2015. Many seasoned observers continue to suggest that the growth in gross value added (GVA) recorded in these estimates overstates India’s actual economic performance. The macro estimates seem to strongly differ from micro phenomenon.
Japan registered a travel surplus of about US$10.6 billion in 2015, suggesting its growing competitiveness as an exporter of tourism. According to the Japan National Tourism Organisation (JNTO), the number of inbound tourists increased by 47.1 percent to 19.7 million in 2015, outnumbering outbound tourists for the first time in 45 years. Foreign tourists also spent a record US$32.6 billion, up roughly 70 percent from 2014. So what explains Japan’s booming tourist industry?
The Brexit vote is a game-changer for EM. While the direct impact on EM is limited, the damage to market sentiment is undeniable. In addition, to make matters worse, there will be a protracted period of uncertainty as the UK and the EU negotiate the divorce proceedings.
We do not think individual country stories will matter much in this new investment climate, where risk assets are likely to remain under broad-based selling pressures. We believe that Asia will outperform, while Latam and EMEA are likely to underperform.
This week’s long-speculated departure of Indian central bank Governor Raghuram Rajan reflected the Indian government’s view that he was no longer welcome at the helm. However, it also reflects the challenges all central bankers face in driving an economy.
Post the news, there has been a lot of unnecessary hype about his exit and the likely impact on financial and forex markets, and in the longer-term, the stability of the Indian economy.
The result of the U.K. referendum on European Union membership has been a surprise and massive shock to so-called “expert” opinion.
In addition, not just to academic opinion: The betting markets, which are supposed to be inhabited by experts at setting odds, were assigning just a one-in-seven probability to a majority for “leave” on the eve of the vote.
The United Kingdom has voted by a close margin to leave the European Union. Here, experts from around the world react to the news which has sent shockwaves around the world and what it means for their country. This article will update.
France
Frédérique Berrod, professor of public law, Sciences Po Strasbourg and Antoine Ullestad, PhD candidate in European law, University of Strasbourg
