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With all of
this going on in the world's
other major economies --
China
"China
Slowdown Spreading, HSBC Services PMI Shows" (Reuters)
China's
services sector cooled in November to its weakest growth in three months, an
HSBC purchasing managers' index showed on Monday, the latest data portraying
an economy slowing quickly and in need of policy support.
The index fell
to 52.5, a sharp decline given that October's reading was 54.1 -- the highest
in four months -- though the index remains above the 50 level that separates
expansion from contraction in the sector.
Expectations
for new business dropped to their lowest level in three months too, but
remained firmly above 50.
Japan
"Japan
Recovery Paused as Deficit Grows" (Agence
France-Presse)
TOKYO —
The Bank of Japan said Wednesday the country's economic recovery "has
paused" because of the slowing global economy and strong yen, as data
revealed a growing trade deficit for the export-dependent nation.
The central
bank left its key interest rate unchanged at between zero and 0.1 percent,
but despite the crunch, did not offer any more easing.
"The
pick-up in Japan's economic activity has paused, mainly due to the effects of
a slowdown in overseas economies and of the appreciation of the yen,"
the central bank said after a two-day policy meeting.
"Improvement
in business sentiment has slowed on the whole despite steady improvement in
domestic demand-oriented sectors," the bank said in a statement.
It warned the
European financial crisis was posing a serious risk to the global outlook.
Germany
"Survey
Shows Germany Already in Recession: Report" (MarketWatch)
The German
economy is already in recession, Die Welt newspaper reported Monday, citing
its survey of 14 bank economists.
The German
economy shrank in the final three months of 2011 and the pace of the
contraction will gain momentum in the first quarter of 2012, the survey
showed. An economy is in recession if real gross domestic product contracts
for two successive quarters.
France
"France
Is in Recession That Will Last Through March, Insee
Says" (Businessweek)
The French
economy will shrink this quarter and next, suggesting the nation is in a
recession as investment and consumer spending stagnate,
national statistics office Insee said.
The euro
area’s second-largest economy will shrink 0.2 percent in the fourth
quarter and 0.1 percent in the first quarter of 2012, before expanding 0.1
percent in the following three months, Paris-based Insee
said yesterday in its quarterly forecast.
Confidence is
slumping as businesses cut back on investment and slash jobs in the face of
Europe’s deepening sovereign debt crisis. That’s driving up
unemployment and prompting households to rein in spending. A shrinking
economy may present a challenge to President Nicolas Sarkozy as he prepares
for a two-round election in April and May of next year.
Brazil
"Brazil's
Economy Slows Amid Global Downturn, 3Q GDP Stalls" (Fox
News)
(NewsCore) - RIO DE JANEIRO -- The Brazilian economy no
longer appears to be immune from the global downturn, as third-quarter gross
domestic product (GDP) came in unchanged from the previous quarter, according
to official data released Tuesday.
Brazilian
growth also slowed on an annual basis. GDP rose just 2.1 percent from the
third quarter in 2010, compared to 3.1 percent year-over-year growth in the
second quarter, the Brazilian Institute of Geography and Statistics (IBGE)
said.
A survey of
economists by Dow Jones Newswires produced a median forecast of 2.7 percent
growth for the year.
The country's
remarkable boom has slowed precipitously as eurozone
debt fears weigh on the export-reliant economy.
Brazil grew by
an explosive 7.5 percent in 2010, the IBGE said. But prolonged debt problems
in developed markets struck a blow to Latin America's growth engine.
As a result,
economists have slashed their forecasts for Brazilian growth in 2011 and next
year.
United
Kingdom
"UK
Economy Likely to Shrink Amid Euro Crisis, Says BCC" (The
Telegraph)
The Government
must act now to repair the blow to business confidence dealt by the eurozone debt crisis, or risk an even greater setback for
Britain's ailing economy, the British Chambers of Commerce warned.
The BCC said in
its latest quarterly survey that although a technical recession with two
successive quarters of negative growth was "not a foregone
conclusion", at least one quarter of contraction was very likely in the
first half of 2012.
"Britain's
economy is at a critical stage – and now is not the time to shy away
from the radical decisions needed to inspire confidence and increased
investment for years to come," said John Longworth, the BCC's director
general.
The business
group said its latest findings showed the economic recovery was stalling,
with broad-based weakness in the fourth quarter of 2011 across the UK
manufacturing and services sectors.
"The
results of our latest survey are a cause for concern and point towards
stagnation in the first quarter of this year. Many of the balances are now at
levels last seen in the third quarter of 2009, meaning improvements seen in
the last two years have largely been cancelled out," said Mr Longworth.
Italy
"Italy
Recession Fears As Growth Contracts" (The
Telegraph)
Italy's economy
contracted by 0.2pc in the third quarter, raising fears that the eurozone's third largest country is slipping into
recession.
The
weaker-than-expected data as adds to the woes of Prime Minister Mario Monti's technocrat government, which has to drive through
a €34bn austerity package and crucial structural reforms that will
stunt growth further.
Consumer
spending dropped 0.2pc from the second quarter, with investment declining
0.6pc. Exports grew 1.6pc and imports fell 1.1pc in
the quarter.
The Italian
government predicts GDP will contract 0.4pc next year, but many economists
fear the figure is optimistic.
"We can
say without mincing words that we have already slipped into recession,"
said Intesa Sanpaolo
analyst Paolo Mameli. "We expect GDP to keep
contracting for the next 3-4 quarters. --
Is there any chance that our economy
will not be seriously affected?
I thought we
put paid to the ridiculous notion of "decoupling" years ago.
Michael J. Panzner
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