According to government data, the economy grew 4.0 percent in 2015, the fastest pace since 2014, surpassing analyst expectations, according to AFP. The good news may prompt the central bank to raise rates unless Russian sanctions hamper economic progress. Prime Minister Ahmet Davutoglu promises such measures as pension reform, increasing the minimum wage and fostering a suitable business climate.
China’s state monopolies survive alongside a cutthroat private sector.
The second World Internet Conference (WIC), also known as the Wuzhen Summit, will take place Dec 16 -18, in Wuzhen, Zhejiang. Chinese President Xi Jinping will attend the conference and address the opening ceremony. It takes place amid dramatic expansion of Chinese e-commerce, thanks to great market potential and government’s supportive policies.
The Federal Reserve Bank in Cleveland measured the median Consumer Price Index at a 2.1 percent annualized rate in November, above the Federal Reserve’s 2 percent inflation target. Meanwhile, the median CPI has risen 2.5 percent over the last 12 months and the CPI excluding food and energy, volatility components that often receive steep discounts, rose 2 percent.
Since the summer, only September saw a decline in CPI, which fell 0.2 percent. However, the trimmed-mean CPI, median CPI, and CPI less food and energy all posted sharp increases.
All eyes are on the US Federal Reserve, which is expected to raise interest rates for the first time in nearly a decade. Since the financial crisis in 2008, the US, along with the Eurozone, UK and Japan have held their interest rates close to zero and used quantitative easing to flood financial institutions with capital.
We all know by now that Britain has a productivity problem. The average British worker simply doesn’t make as much stuff as those from other major countries and for all the agreement that something must be done, there is little consensus.
Debates about solutions tend to focus on big ticket national infrastructure policy designed to grandly sweep away obstacles and enable improvement. But the risk is that we obscure practical steps needed at the very heart of the problem.
There is still optimism that the Japanese economy will prevail. Projections are that the economy is rebounding and Japan will achieve reasonably good growth for the next several years. Some progress has been achieved in the three years of Abenomics, but it has been a bumpy path.
The most immediate goal (the first arrow) of Abenomics has been to end the small but persistent deflation that arose some 15 years ago, and to achieve an annual 2 percent increase in the Consumer Price Index (CPI).
As 2015 draws to a close, the Indonesian government is trying to convince the jury on two counts — first, that it has turned the corner towards more constructive economic policy, and second, that it has the political leadership and capacity to implement this new policy.
EM starts the FOMC week off on a soft footing. Besides the prospects of Fed liftoff Wednesday, oil prices are making new cycle lows. Uncertainty about China’s FX policy is also making markets nervous, though we think this concern is misplaced. Overall, the global backdrop for EM remains very negative and we do not see much chance for a rebound after Fed lift-off. In recent days, USD has made new all-time highs against COP, MXN, and ZAR. Others are likely to follow suit in the coming weeks.
The year in Indonesian politics began with a novice president in Joko Widodo (Jokowi) who, while struggling with day-to-day politics, still inspired hope that he would pursue the unfinished business of democratisation. After putting some early blunders behind him, Jokowi spent much of the year pursuing a workable compromise between appeasing the establishment and satisfying voters’ expectations for less corruption and more public goods. As the year draws to a close the president is on firmer political ground but hopes for serious reform have almost entirely evaporated.
