March 28, 2024

I.M.F. Trims Global Forecast as Emerging Markets Lag

WASHINGTON — Many major emerging economies have weakened since the spring, the International Monetary Fund said on Tuesday in the latest update to its economic forecasts, while advanced economies, including the United States and Europe, continue to trudge along with subpar growth and the euro area remains mired in recession.

The fund now expects the global economy to grow about 3.1 percent in 2013, the same rate as in 2012 and down from growth of 3.9 percent in 2011. That is 0.2 percentage points lower than the Washington-based fund forecast in April.

Olivier Blanchard, the fund’s chief economist, said in the periodic update that emerging economies were experiencing a “slowdown in underlying growth,” and the fund lowered its forecasts for China, India, Brazil, Mexico, South Africa and Russia, among other countries. “It’s clear that these countries are not going to grow at the same rate as they did before the crisis,” he said.

Given that emerging economies have in no small part powered the global recovery, their slowdown has a significant effect on the rest of the world, the fund said. For instance, Mr. Blanchard said, if growth in the so-called BRICS — Brazil, Russia, India, China and South Africa — were 2 percentage points slower than expected, a half-percentage point would be knocked off the United States’ growth rate. “It matters,” he said.

The fund said that the recession in the euro area had proved deeper than expected in recent months because of the persistent combination of tight credit conditions, low demand and government budget cutting. Next year, the fund’s forecasters expect growth to pick up in the 17 countries of the euro zone, but to a slower rate than previously thought — just 0.9 percent, down from about 1 percent as forecast in April.

The fund warned, as it has before, that the United States’ tax and spending policies were slowing its recovery. Private demand is improving as the turnaround in the housing market helps to repair households’ balance sheets and as the Federal Reserve continues its campaign to encourage investors to invest with accommodative monetary policy, the fund said. But tax increases and budget cuts were weighing on growth, it warned.

The fund cut its estimate of United States growth by 0.2 percentage points for both 2013 and 2014. It now sees the country’s economy growing 1.7 percent this year and 2.7 percent next year.

Japan is one bright spot in the global economy, the I.M.F. said. The country has been mired in stagnation and deflation for a decade. But since the beginning of the year, the government has been engaged in an athletic effort to spur the economy with aggressive asset purchases by the central bank and a jolt of government spending. The I.M.F. raised its estimate of the country’s current-year growth to 2 percent, up 0.5 percentage points from its April forecast.

Among emerging economies, different countries were suffering from different problems, the fund said. In some cases, infrastructure bottlenecks and other capacity constraints were stifling economic activity. In other cases, among big exporters like Russia, lower commodity prices were hurting growth.

Demand is weakening for goods from countries like Nigeria and South Africa, weighing down the whole sub-Saharan region, the fund said. And countries in the Middle East and North Africa continue to see disruptive political transitions, including violent ones.

The prospect of the Federal Reserve tapering its extraordinary asset-buying program — essentially taking its foot off the accelerator, if not putting it on the brakes — is sending shudders through the global economy, too. Financial markets have become more volatile and yields have increased in part because of uncertainty about the Fed’s policies, the fund said.

The rising yields “largely reflect a one-time repricing of risk,” it said. “However, if underlying vulnerabilities lead to additional portfolio shifts, further yield increases and continued higher volatility, the result could be sustained capital flow reversals and lower growth in emerging economies.”

The World Bank, the I.M.F.’s sister institution, has noted that businesses and governments in many lower-income developing economies have engaged in huge infrastructure projects financed with rates pushed down by the Fed. As interest rates rise, it has warned, some of those projects might fail — revealing financial bubbles and causing economic turbulence in the coming months.

Article source: http://www.nytimes.com/2013/07/10/business/economy/imf-trims-global-forecast-as-emerging-markets-lag.html?partner=rss&emc=rss

I.M.F. Trims Global Growth Forecast as Emerging Markets Lag

WASHINGTON — Many major emerging economies have weakened since the spring, the International Monetary Fund said on Tuesday in the latest update to its economic forecasts, while advanced economies, including the United States and Europe, continue to trudge along with subpar growth and the euro area remains mired in recession.

The fund now expects the global economy to grow about 3.1 percent in 2013, the same rate as in 2012 and down from growth of 3.9 percent in 2011. That is 0.2 percentage points lower than the Washington-based fund forecast in April.

Olivier Blanchard, the fund’s chief economist, said in the periodic update that emerging economies were experiencing a “slowdown in underlying growth,” and the fund lowered its forecasts for China, India, Brazil, Mexico, South Africa and Russia, among other countries. “It’s clear that these countries are not going to grow at the same rate as they did before the crisis,” he said.

Given that emerging economies have in no small part powered the global recovery, their slowdown has a significant effect on the rest of the world, the fund said. For instance, Mr. Blanchard said, if growth in the so-called BRICS — Brazil, Russia, India, China and South Africa — were 2 percentage points slower than expected, a half-percentage point would be knocked off the United States’ growth rate. “It matters,” he said.

The fund said that the recession in the euro area had proved deeper than expected in recent months because of the persistent combination of tight credit conditions, low demand and government budget cutting. Next year, the fund’s forecasters expect growth to pick up in the 17 countries of the euro zone, but to a slower rate than previously thought — just 0.9 percent, down from about 1 percent as forecast in April.

Accenting that concern, Standard Poor’s, the credit ratings agency, on Tuesday cut Italy’s long-term rating a notch to BBB, just two steps above “junk” status, citing the country’s falling economic output and weakened financial system. The fund warned, as it has before, that the United States’ tax and spending policies were slowing its recovery. Private demand is improving as the turnaround in the housing market helps to repair households’ balance sheets and as the Federal Reserve continues its campaign to encourage investors to invest with accommodative monetary policy, the fund said. But tax increases and budget cuts were weighing on growth, it warned.

The fund cut its estimate of United States growth by 0.2 percentage points for both 2013 and 2014. It now sees the country’s economy growing 1.7 percent this year and 2.7 percent next year.

Japan is one bright spot in the global economy, the I.M.F. said. The country has been mired in stagnation and deflation for a decade. But since the beginning of the year, the government has been engaged in an athletic effort to spur the economy with aggressive asset purchases by the central bank and a jolt of government spending. The I.M.F. raised its estimate of the country’s current-year growth to 2 percent, up 0.5 percentage points from its April forecast.

Among emerging economies, different countries were suffering from different problems, the fund said. In some cases, infrastructure bottlenecks and other capacity constraints were stifling economic activity. In other cases, among big exporters like Russia, lower commodity prices were hurting growth.

Demand is weakening for goods from countries like Nigeria and South Africa, weighing down the whole sub-Saharan region, the fund said. And countries in the Middle East and North Africa continue to see disruptive political transitions, including violent ones.

The prospect of the Federal Reserve tapering its extraordinary asset-buying program — essentially taking its foot off the accelerator, if not putting it on the brakes — is sending shudders through the global economy, too. Financial markets have become more volatile and yields have increased in part because of uncertainty about the Fed’s policies, the fund said.

The rising yields “largely reflect a one-time re-pricing of risk,” it said. “However, if underlying vulnerabilities lead to additional portfolio shifts, further yield increases and continued higher volatility, the result could be sustained capital flow reversals and lower growth in emerging economies.”

The World Bank, the I.M.F.’s sister institution, has noted that businesses and governments in many lower-income developing economies have engaged in huge infrastructure projects financed with rates pushed down by the Fed. As interest rates rise, it has warned, some of those projects might fail — revealing financial bubbles and causing economic turbulence in the coming months.

Article source: http://www.nytimes.com/2013/07/10/business/economy/imf-trims-global-forecast-as-emerging-markets-lag.html?partner=rss&emc=rss

Economix Blog: In Most Rich Countries, Women Work More Than Men

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

In most of the developed world, women spend more time working each day than men do, if you include unpaid work.

According to the latest report on gender and employment from the Organization for Economic Cooperation and Development, across the developed world and in other countries tracked by the organization, men spend more minutes per day in paid work than women do.

The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris. The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris.

In the United States, for example, men spend 5 hours and 8 minutes working on the average day, whereas women spend 4 hours and 2 minutes.

But when it comes to unpaid work — activities like child care and cleaning — women spend vastly more time than men in every country the organization included in its analysis.

The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris. The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris.

Women perform a disproportionate share of unpaid work regardless of whether they are employed. In couples where both partners have paid jobs, women spend more than two hours per day in unpaid work, the report says, and that gap “hardly narrows” even when you restrict the sample to couples with both partners working full time. Among couples in which the woman works and the man doesn’t, men do only as much housework as the women, and spend far less time in child care.

The biggest gender gaps in unpaid work, in fact, involve taking care of children: working mothers devote about 50 percent more time to child care than nonworking fathers do.

When you look at time spent in paid and unpaid work together, women edge out men in most countries included in the analysis.

The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris. The years covered are: Australia: 2006; Austria: 2008-09; Belgium: 2005; Canada: 2010; China: 2008; Denmark: 2001; Estonia: 1999-2000; Finland: 2009-10; France: 1998-99; Germany: 2001-02; Hungary: 1999-2000; India: 1999; Italy: 2002-03; Ireland: 2005; Japan: 2006; South Korea: 2009; Mexico: 2009; the Netherlands: 2006; New Zealand: 2009-10; Norway: 2000-01; Poland: 2003-04; Portugal: 1999; Slovenia: 2000-01; South Africa: 2000; Spain: 2002-03; Sweden: 2000-01; Turkey: 2006; Britain: 2000-01; and the United States: 2010. Source: Organization for Economic Cooperation and Development. Secretariat estimates based on national time-use surveys. Further detail, see: Miranda, V. (2011), “Cooking, Caring and Volunteering: Unpaid Work Around the World”, O.E.C.D. Social, Employment and Migration Working Papers, No. 116, O.E.C.D. Publishing, Paris.

The chart above shows how much more time women spend than men on unpaid work (light blue bars); how much less time women spend than men on paid work (medium blue bars); and how much time over all women spend compared to men on paid and unpaid work combined (dark blue diamonds).

As you can see, across the member countries of the Organization for Economic Cooperation and Development, women spend 21 minutes more time, on average, in total work per day than men do.

The gap is exactly the same in the United States. Of the countries surveyed, the gap is biggest in India, where women spend on average 94 minutes more time than men on total work each day.

In a few countries analyzed, though, men do spend slightly more time than women on total work per day: Denmark, Sweden, Norway, the Netherlands and New Zealand. In Britain and Germany, the two sexes spend almost equal time on total work each day, although the composition of that work falls along traditional gender lines, with men spending more of their time on paid work and women more on unpaid work.

For whatever reason, the traditional division of labor appears deeply ingrained, in both rich countries and poor ones. The report observes also that policies intended to help promote work-life balance, such as parental leave options, often counterintuitively have the effect of reinforcing gender roles at home:

[M]others generally make much wider use than fathers of parental leave options, part-time employment opportunities, and other flexible working time arrangements like teleworking. It is primarily mothers, for example, who avail themselves of long parental leave – and they are frequently reluctant to give up leave to their partner’s benefit. The result is a reinforcement of traditional gender roles. In fact, even when policies allow or encourage women to change the nature of their participation in employment or their hours of work, inequalities at home and in contributions to home life have a tendency to remain. A vicious circle is thus established: as long as mothers reduce employment participation when they have (young) children in the household, employers have an incentive to invest less in their female than in their male workers.

Article source: http://economix.blogs.nytimes.com/2012/12/19/in-most-rich-countries-women-work-more-than-men/?partner=rss&emc=rss

Economix Blog: Lean on Me: Trust and Friendship Around the World

Among the many reasons Americans are lucky is that they tend to have people they can depend on.

That is one of the takeaways from a recent report from the Organization for Economic Cooperation and Development, which in part looked at social relationships and trust around the developed world. Here is a chart showing the share of a country’s population that say they have relatives or friends they can count on for help in times of need:

DESCRIPTIONNote: Data refer to 2008 for Iceland and Norway; and to 2009 for Estonia, Israel, Switzerland and South Africa. Data from Gallup World Poll and Organization for Economic Cooperation and Development.

The United States is in the middle of the pack of the countries surveyed, with 92.3 percent of Americans saying they have a support network. Compare this to a country like India, where only 59.3 percent of people say they have a network they can depend on in times of need.

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Having friends and family you can lean on is particularly important for those who are more likely to need support from time to time — that is, lower-income people.

Unfortunately, the O.E.C.D. found that people with lower incomes and less education were least likely to have a personal social safety net:

DESCRIPTIONSource: Gallup World Poll and Organization for Economic Cooperation and Development.

Perhaps partly because they generally have good support networks, Americans are slightly more trusting than residents of other countries; 36.6 percent of Americans agreed that “most people can be trusted,” compared with 33 percent across the developed world.

But distrust reigns when it comes to opinions of some of their most prominent institutions.

Just 30.1 percent of Americans have a “high level of trust” in the media, compared to an O.E.C.D. average of 40.4 percent. Even China, where news organizations are state-run, somehow managed to have higher trust in the media (54.6 percent). The same is true in Mexico (52 percent), where journalists reportedly self-censor to avoid angering the drug cartels.

DESCRIPTIONData refer to 2009 for Estonia, Israel, Switzerland and South Africa; and to 2008 for Iceland and Norway. Data regarding trust in the national government is not available for China. The value for the O.E.C.D. is an average of O.E.C.D. countries for which data are available in the latest wave of the survey. Source: Gallup World Poll and the Organization for Economic Cooperation and Development.

Americans are also slightly less likely than other developed countries to say they have a high level of trust in their national government, yet somewhat more likely to trust in their own country’s judicial system.

Article source: http://feeds.nytimes.com/click.phdo?i=0695b3fbe9c0fcc614ff656bba3ae652