Brazil’s economy receded 0.2 percent in the first few months of 2015, and analysts expect the lack of growth to continue. Analysts believe Brazil’s GDP will shrink by 1.2 percent for 2015, which will be the nation’s largest decline in 25 years. Brazil’s annual inflation rate stands at 8.17 percent, exceeding the government’s threshold of 4.5 percent.
A new study by the International Monetary Fund (IMF) investigates the dangers of financial systems that have grown too big too fast. The excessive growth of the American financial system causes an enormous drag on the US economy, reducing GDP by 2 percent every year. That equates to some $320 billion lost each year.
How Did This Happen?
The Chinese yuan is fairly valued, according to the IMF, while South Korea sees an improved economy and Singapore stuns analysts with growth nearly three times better than expected.
In China, the once controversial value of the yuan has become more reasonable, according to the International Monetary Fund. The group says that the Chinese currency is “no longer undervalued” as “real effective appreciation over the past year has brought the exchange rate to a level” that is fair for all parties, the IMF said in a statement.
Singapore’s economy grew 2.6 percent in Q1, a boost from 2.1 percent from the last quarter. GDP also rose to an annual 3.2 percent in the first few months, exceeding a previous government forecast of 1.1 percent in April. The increased growth is attributed to stronger exports and increasing U.S. demand.
After decades of Cold War era embargoes and secrecy, Cuba has allowed the veil over its economy to lift just a bit in recent years. In an effort to join the rest of the world economically, Cuba has slowly loosened a few of its own policies geared toward preventing outside influence that could undermine the communist government’s control. This has allowed an array of American businesses, from airlines to law firms, to dip a toe into Cuba’s economic pool, and generally, Americans seem to find the climate hospitable enough.
South Africa’s economy fell short of expectations in the first few months of 2015, growing at an annual rate of 1.3 percent, a stark contrast to 4.1 percent growth from the previous quarter. Analysts forecasted GDP growth of at least 1.7 percent.
The International Monetary Fund (IMF) has released an estimate that places India’s growth for 2015 to 2016 at an astounding 7.5 percent. That puts India’s growth slightly higher than China’s. Many investors had overlooked India, assuming its outrageous deficit spending would hamper its economic growth, but it seems to have had little or no negative consequence yet. This leaves many in the financial industry asking if India is the best emerging economy in which everyone should invest.
History
A recent study has shown an interesting correlation between the drop in US alcohol-related car accidents and the overall growth of the US economy. According to the study, as the number of alcohol-related accidents has dropped, the US economy has experienced a corresponding boost to overall GDP.
Chinese stocks rose on Monday despite growing fears in the west that an unsustainable equity bubble is ripe to burst in the largest Asian economy. China’s Shanghai Composite Index rose 1.75% by late afternoon trading, extending the index’s rally. In the last twelve months, the index has risen nearly 138%, or 44% year-to-date.
Illiterate Investors
Turkish governing party, AKP, has come under fire over such economic problems as high household debt and unemployment. Despite the party’s growing unpopularity and attacks from the opposition, the AKP is set to win the government by a slight majority. The general election in Turkey takes place on June 7.
