Sat 23 May 2009
Rebecca Wilder’s economic updates (May 14–21): still bad, but flood of shocking reports ebbs
Posted by Prieur du Plessis under Economy, Guest Bloggers
This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog.
This week was a little light on global data. Given that the trade data is looking “better” in some areas (which really means not falling as quickly in some cases, see this post and this post), it is likely that Q1 will be the worse quarter for many Asian economies who rely heavily on exports for growth. It’s bad, though, with Japan, Taiwan, and Singapore all falling 9% or more over the year! Inflation is slowing substantially in some areas, negative in others. And finally, it looks like US capital markets got a small bump in March, as foreigners returned to risk. Overall, the global economic reports remain in the red, but the shockingly bad reports are fading.
GDP in Asia: waiting to exhale
The chart illustrates annual GDP growth through Q1 2009 for Hong Kong, Japan, Taiwan, Indonesia, and Singapore. Looks bad, but Indonesia is showing some resilience, although GDP is now growing at its slowest pace since January 2004.
More scary inflation charts: disinflationary pressures strong - deflation in some
The chart illustrates annual inflation across key economies through April 2009. The UK is an interesting case: the British pound has been taking a beating and pressuring prices, and the consumer price index is holding on (can’t say the same for the retail price index) better than in other economies (US inflation now negative for two consecutive months). Today, though, S&P downgraded the UK outlook to negative, and the sterling took a hit; wonder what that will do to prices?
Amid a calm developing in capital markets, foreign investors returning to US-denominated risk
The chart illustrates the 12-month rolling sum of net capital inflows through March 2009, as reported by the Treasury International Capital data (TIC). Good thing for the Treasury, which is planning on running $trillion deficits in coming years, that foreigners might buy their notes. In March, foreigners showed a slight shift toward risk, with net long-term flows growing for the first time over the year since the end of 2008 (second time over the month).
Source: Rebecca Wilder, News N Economics, May 21, 2009.
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May 23rd, 2009 at 2:57 pm
Ms. Wilder’s columns are always so negative. I don’t enjoy reading her posts.
May 23rd, 2009 at 5:19 pm
I thought that in view of the world economy, she is overly positive. The “green shoots of spring” will soon wither in the harsh dry summer of reality. Study the 1873 crash to see a more real picture of what is to come
May 23rd, 2009 at 8:53 pm
My thought is that “flood of shocking reports ebbs” casts events in a positive light that is created by the fact that we are less easily shocked. We would have been very shocked by these new reports if we had not just been flooded by worse. So some people want to put on rose colored glasses inorder to feel good about the potential quick recovery from their losses. No one really knows where we are going, but it does not help to read more into the data than is there.