Growth slows to 4-year low in first quarter

(Reuters) - It was the weakest quarterly expansion in gross domestic product, or GDP, since the fourth quarter of 2002. The slowdown came as businesses sold off inventories even though consumer spending remained strong.




However, a key inflation gauge favored by the Federal Reserve, the personal consumption expenditures price index excluding volatile food and energy prices, showed price pressures were stronger than expected.


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S.Africa Q1 '07 c/act deficit narrows to 7.0 pct

(Reuters) - South Africa's current account deficit narrowed to 7.0 percent of gross domestic product (GDP) in the first quarter of 2007 as lower oil imports offset a decrease in mine exports, the central bank said on Thursday.

The shortfall compared with a 7.8 percent deficit in the fourth quarter of 2006 and 5.7 percent in the third quarter.


Read more at Reuters Africa

Czech Republic, Hungary and Poland Face Budget Deficit Risks, OECD Says

(Bloomberg) -- The Czech Republic, Hungary and
Poland must do more to ensure they can get bring their budget
deficits within European Union limits, the Organization for
Economic Cooperation and Development said.

The Czech deficit will probably be 3.7 percent of gross
domestic product this year and 3.5 percent next year, Hungary's
shortfall is forecast at 6.7 percent of GDP this year and 4.8
percent in 2008, while the Polish budget gap may be 3.2 percent
of GDP this year and 2.4 percent next year, the OECD said.


Read more at Bloomberg Emerging Markets News

Housing to weigh more than expected on growth

(Reuters) - Real gross domestic product, the government's broadest measure of economic output, is expected to advance 2.3 percent in 2007. That is down from an earlier estimate in February for 2.8 percent growth, a survey conducted by the National Association for Business Economics found.




The lower forecast came after the government reported anemic 1.3 percent GDP growth during the first three months of this year.


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Japan's Ota aims for better data to calculate GDP

(Reuters) - The cabinet office revises annual GDP data once a year to improve its estimate of the country's economic activity by using more comprehensive data such as industrial statistics as well as changing calculation methods.

"There are reasons behind this, but such a gap is something that cannot be overlooked in looking at the economy," Ota told a news conference.


Read more at Reuters.com Economic News

WRAPUP 1-U.S. retail sales rise, NY manufacturing edges up

(Reuters) - Retail sales rose by 0.7 percent as warmer weather and an earlier-than-usual Easter holiday encouraged shoppers in March. Excluding automobiles and parts, sales were up a somewhat smaller-than-expected 0.8 percent, according to the Commerce Department report.

"It's a good solid report, it certainly suggests that first-quarter GDP is going to be at least 2 percent, could be a little more" said Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Paramus, New Jersey.


Read more at Reuters.com Economic News

UPDATE 1-Brazil cuts fiscal target on bigger GDP growth

(Reuters) - Mantega said the change was made because of a broader definition of GDP and will be unchanged from the primary surplus calculated for last year using the new GDP methodology.

The government on Wednesday revised the GDP expansion in 2006 to 3.7 percent from a previously reported 2.9 percent. Mantega last night said that with the revision, the 2006 primary surplus fell to 3.88 percent of GDP, below the government's target of 4.25 percent.


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Fourth-quarter GDP revised up on inventories

(Reuters) - Economists had expected the final fourth-quarter reading of GDP growth to be unrevised at 2.2 percent.

The final figure was up from a 2 percent rate in the third quarter and meant the economy expanded by a solid 3.3 percent during the whole of 2006. It was the third straight year that GDP expanded at a rate over 3 percent, following growth of 3.2 percent in 2005 and 3.9 percent in 2004.


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GDP revised up on inventories

(Reuters) - The pickup in growth came even as investment in housing was revised to an even bigger drop of 19.8 percent, the largest decline since the first quarter of 1991, and business investment weakened.

Gross Domestic Product or GDP, which measures total goods and services output within U.S. borders, expanded at a 2.5 percent annual rate instead of 2.2 percent, the department said in its final revision of fourth-quarter economic performance.


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Asian stocks rise as dollar gains boost exporters

Asian share markets rose on Monday, continuing a recovery from a recent slide, as a stronger dollar boosted exporters and after U.S. jobs data reassured investors about the health of the world's biggest economy.

The U.S. currency was steady, holding most of the gains made last week, when a report showing growth in job creation eased speculation about a possible interest rate cut, while the upward revision of Japanese GDP data had little impact on the yen.

Read more at Reuters.com

Manuel optimistic about growth

Finance minister Trevor Manuel is a whole lot more optimistic about economic growth than economists in the private sector.
He is predicting a growth rate of 4.8% in 2007 - compared with forecasts of 4.4% in the private sector.

Manuel also revealed what most economists have predicted - that gross domestic product (GDP) grew by 4.9% last year. The final figures will only be available next week, when Statistics SA releases the GDP figures for the last quarter of the year.

The Budget Review said that continued strong investment and improved net trade would support growth in 2007. As the international environment improved and the supply capacity of the economy expanded, domestic growth was expected to accelerate to 5.4% in 2009.

Read more at FIN24.co.za

S. Africa's Manuel to Propose Compulsory Pension Plan

South African Finance Minister Trevor Manuel may forecast the country's first budget surplus since at least 1960 tomorrow and propose a compulsory pension and medical plan to increase savings by individuals.

In his 11th budget, Manuel probably will revise his forecast for a deficit of 0.4 percent of gross domestic product in the year that ends March 31 after a tax windfall, said Arthur Kamp, an economist at Sanlam Investment Management. The finance minister starts his speech to parliament in Cape Town at 2 p.m.

A consumer spending boom, higher gold and platinum prices and a weaker rand have driven up profits in Africa's biggest economy. Now the government is seeking to increase savings and finance the investment needed to lift economic growth further.

Read more at Bloomberg.com

S.Africa looks to bolster mining exploration

South Africa may introduce "flow-through shares" to bolster flagging mining exploration, the chief economist at the Chamber of Mines told parliament on Wednesday.

The possible new rules would allow junior companies to issue shares which enable investors to get a tax deduction for the expenses of an exploration company.

Mining contributes about 6.2 percent to South Africa's gross domestic product, with export earnings generating some 145 billion rand to Africa's biggest economy.

But the sector is recovering from a rocky patch which saw investment in local mining decline despite a commodity boom and an increase in global exploration expenditure.

Read more at Reuters South Africa

Why China grows so fast

And what we can learn from Botswana which is also among the world's 11 best economies of past quarter century.

Sustained high growth in developing economies is a recent, post-World War II phenomenon. Using GDP figures, I take "high" to mean above 7% and "sustained" to mean over 25 years or more. These cutoffs are arbitrary, but a similar picture emerges with variants. Growth at these rates produces very substantial changes in incomes and wealth: Income doubles every decade at 7%.

Read Full article at Moneyweb.co.za