South Korea has been contending with an outbreak of Middle East Respiratory Syndrome (MERS) for several months. Economists fear the disease could harm the South Korean economy just as it has shown strong signs of recovery from the Global Recession of 2008.
Few know much about Sri Lanka beyond its prominent location on the map off the southeast coast of India. However, it may be time for more investors to take notice of this small, developing nation. In the first quarter of 2015, the Sri Lankan economy grew by 6.4 percent. This matches Q4 2014. Sector by sector, the economy has a few notable standouts, as well, with manufacturing up 6.5 percent and services up by 7.5 percent.
China’s economy has always played a very unique role in challenging the global markets. China’s approach to establish two of its own banks, namely BRICS led National Development Bank and Asian Infrastructure Investment Bank (better known as AIIB) has made it evident that it wanted to rely less on the western world and wanted other Asian economies to join in. With the establishment of BRICS, China aimed to reverse the power play game of developed nations like US and Japan.
Zimbabwe dollars will be decommissioned at a rate of 35 quadrillion per US dollar (that is Z$35,000,000,000,000,000 for US$1). Any remaining Zimbabwe dollars in circulation after September 30 2015 will be officially, as opposed to practically, worthless. This is ditching a currency.
Critics of the Greek government repeatedly claim that its radicalism prevents a resolution to the crisis. Yet the EC has indicated that the difference between the creditors’ proposal and Syriza’s plans amounts to 2 bln euro a year in government revenue. This does not seem so radical.
Consider Ukraine’s threat of a unilateral moratorium on its debt servicing unless its creditors accept a 40% haircut. The Ukrainian position enjoys support from the IMF, though Greece does not.
In a familiar refrain, EM starts this week on a soft note. Most EM currencies are softer against the dollar. MSCI EM is having trouble gaining traction, and appears headed for the March lows. EM bond yields are rising in tandem with DM bond yields even though we have only seen an increase in expectations for tightening in Brazil.
When the dollar starts to gain ground, it comes as a double-edged sword for economies in the emerging markets. Generally a strong dollar means more expensive imports for the emerging markets especially from the US. On the other hand, this means that exports from the emerging markets become cheaper in the US and other countries which prefer making their payments in USD.
But as it is always in the dynamic economic environment, there are numerous factors that always come into play and complicate the whole smooth picture.
Once you start picking away at something, it can be hard to stop. Australia’s foreign investment regime is a case in point: successive free trade negotiations have seen welcome liberalisation, but only for selected countries. And without a clear guiding strategy, this piecemeal approach threatens to turn the regulatory regime into a mess that is difficult to navigate and discourages foreign investment.
The US dollar began the new week bid in Asia, but surrendered most of those initial gains before the start of the European session. The lack of fresh news has seen the greenback drift higher in Europe, perhaps waiting for fresh direction from North America.
With the huge structural adjustment that the Australian economy has to effect as the commodities’ boom fades into the distant past, the ability of Australia to attract high levels of foreign investment has never been more critically important to driving employment, productivity growth, and innovation.
