Vice Premier Zhang Gaoli said his country’s economy is stabilizing, with gains in such areas as the service sector and employment. Economic growth expects to retract from 7.4 percent last year to 7 percent in 2015, a 25-year low.
In 2014, for the first time in recorded history, more humans lived in cities than anywhere else – around 54% of the global population to be exact.
Most economists agree that cities are the engines of economic growth. And, mass urbanization may prove to be one of the most important changes of the early 21st century according to Jamal Saghir, director of sustainable development at the World Bank. If models hold true, predictions show that by mid-century, fully 2/3 of the world’s population will dwell in cities.
EM FX ended last week on a firm note. We believe that the broad-based dollar rally remains intact, but we could see a period of consolidation until the interest rate backdrop becomes more positive for the dollar. The week after next holds the greatest potential, when the first prints for March start emerging and of course capped off with the Good Friday release of nonfarm payrolls. Weekly claims data for the March survey week came in firm, suggesting another strong jobs report for the month.
The US dollar opened broadly lower in Asia but trended higher through the first half of the European morning. The euro peaked just above $1.0880 and fell a little more than a cent (~$1.0770) before finding a reasonable bid. Sterling approached $1.50, could not sustain the upward momentum, and by late morning in London slipped below $1.4850. The dollar is on the sidelines against the yen, trading in a 20-tick range on either side of JPY120. Choppy consolidative activity may continue.
The Chinese economy grew by 7.4% in 2014 and expects to grow by 7.0% this year. These are impressive growth rates for any country but lower than past years’ achievements. For three solid decades, since the beginning of market reforms in the late 1970s, the economy expanded by an annual average of almost 10%.
Unemployment claims rose and productivity weakened in the United States while the Federal Reserve announced falling growth expectations were encouraging it to maintain a loose monetary policy.
The Reserve Bank of India made an unexpected move by lowering lending rates by a quarter percent to help the government foster economic stability. This marks the second interest rate cut since January of this year.
Chancellor George Osborne has unveiled his fifth budget. Fifty days before the general election, it was a more optimistic set of announcements than the UK public has become used to, and Osborne made strong claims about the economic recovery, claiming a Tory government would take Britain “from austerity to prosperity”.
Here our panelists give their take on what this budget means for the economy, business, healthcare, education and the environment.
Economy
Tony Yates, Reader in Economics, University of Bristol
Challenging the dangerous imbalances in the UK economy, where the banking sector contributes 450% of nominal GDP, is imperative. But weeks ahead of a general election, no one wants to redefine the rules of the game.
Japan should seriously consider joining the new China-led Asia Infrastructure Investment Bank (AIIB), regardless of the scheme’s detractors within the country.
Chinese President Xi Jinping first proposed the AIIB in 2013. Beijing signed up 21 founding member nations in October 2014. Expect more, detailed negotiations over the governance structure when the bank officially launches by the end of 2015.
