For the second consecutive year, the Russian government have agreed upon a decision to freeze the amount of pension contributions that are allowed for investment. A response given by the ministry of social protection and labor suggested that the funds would be utilized to finance current pension payments instead. Contributions for last year, (2013) equaled approximately 550 billion rubles, which equates to about $15.2 billion.
The European Central Bank lowered interest rates as the Bank of England kept its record low rate steady on low inflation and falling wages in Britain. The ECB decision comes soon after France and Germany showed disappointing GDP growth and the possibility of a recession. Italy also fell into its third recession in as many years.
Dovish monetary policy was expected from the ECB despite German resistance, as German politicians pressed for further austerity in peripheral nations. Germany has seen a growing current account surplus in recent years.
A sudden cease-fire in the Ukrainian conflict has caused European and U.S. stocks to rally in early morning trading as fears of geopolitical instability ease.
Russian President Vladimir Putin met with Ukraine President Petro Poroshenko to agree on a cease-fire that may become permanent. Russian spokesman Dmitry Peskov said that a “cease-fire regime” had been agreed upon after a conversation between the two. Peskov also said a mutual understanding between Ukrainian and Russian sides had been reached about the future of the Crimean region.
Recent research has suggested that the Philippine economy may be set to experience long-term growth, expanding even further than the 7.2% estimated in the absence of common election-related costs. The department of finance are positive about the projected future for economic growth, and undersecretary of finance, Gil Beltran, suggested that the Philippines may even begin to pick up a greater amount of speed throughout the medium term, as a result of its strong macroeconomic fundamentals.
The ISM Manufacturing index rose by 2 points to 59, above estimates of 57, according to the Institute for Supply Management. Any number above 50 indicates expansion. With an expanded rate of manufacturing, the U.S. is seeing manufacturing expand at the fastest rate in three years. The index also saw a high for new orders that indicate demand has reached its strongest level since 2004.
Currently, tax evasion is estimated to be one of the biggest issues that has begun to break down the heart of Romania’s economy, holding back the country and ensuring it remains steadily in place as one of the poorest places in the European Union. The estimated costs of the undeclared economy are considered to be huge, and approximately a quarter of the people working in Romania are currently believed to be out of reach of most tax inspectors. At this point, if all activity within Romania was properly taxed, it is believed that national revenues could double.
Recent speculation that the ECB will begin an asset-purchasing program has come into doubt after German Finance Minister publicly said monetary policy has “come to the end of its instruments”.
The socialist president of France, Francois Hollande, has recently announced his intentions to stick to a fiscal program that he released in January, even after returning from his vacation to find that the country’s economy has remained stagnant, and fewer French citizens than ever before believe his policies will be able to fix the situation.
It is too bad they ever voted for him according to many people who understand business.
During Hollande’s short break:
Economic experts expected the unemployment rates to stay at 6% or below this July, but instead they increase to 6.25%, allowing the United States to shine brighter for the first time since 2006. Though many business leaders in America believe its unemployment rate to be a sham because the federal agency does not count people who stopped looking for work and those that are underemployed.
Some may have heard various reports throughout the world of the Ebola virus beginning to spread. While there have been a few suspected cases in various areas, countries in Africa are now beginning to close their borders to prevent any more of an outbreak. In fact, South Africa is refusing to admit any person from the infected areas of West Africa.
