Several Countries Record Rapid Economic Growth while Others Need to Do More

A recent study showed that Japan's economic growth is right on track thus supporting the decision of the Central Bank to increase interest rates. According to the report, the unprecedented increase of machinery demands last June indicated the improving confidence of companies to purchase new equipments. The Japanese government said that the demand for machineries rose by 8.5% last June, exceeding the rate predicted by economic experts. Deutsche Securities analyst Seiji Adachi said that the result of the study showed that Japanese companies were still confident to make more investments despite the concerns regarding the decline of the US economy. Amidst such optimism, some analysts still fear that Japan's economic recovery might be impeded by the current problems faced by the global economy. It must be noted that the rising oil prices have been the primary factors behind the global inflation.

Aside from Japan, Germany also recorded its highest economic growth rate in 5 years during the 2nd quarter of 2006. According to a recent report, the nation's economy improved by 0.9% from April to June despite the slow down in the export business. The significant development has been attributed to the increase of domestic demand for products. The 2006 World Cup held recently in the country was also seen as a major factor in boosting the nation's economy during the 2nd quarter. According to a research, the one month tournament had renewed and increased the confidence of German buyers. Although trade with other nations weakened during the past months, the German Federal Statistics Office said that the investments in equipment and construction materials have increased thus pushing the economy upwards during the 2nd quarter of 2006. The positive news, then, has indicated that the biggest economy in Europe is finally recovering from a long period of stagnation.

While the economies of Japan and Germany recorded rapid growth, US inflation grew last month due the rising prices of oil, as well as other energy supplies. The Consumer Price Index, then, jumped from 0.2% to 0.4% last July. According to analysts, the increase of the inflation was largely triggered by the 2.9% rise in prices of energy supplies particularly petrol. The core inflation, with the exemption of energy and food supplies, increased by 0.2%, which is lower than what was initially predicted by economic experts.

Zimbabwe's economy is also at a critical situation with its swelling inflation and currency crisis. A few weeks ago, the Central Bank of Zimbabwe decided to slash three zeros from the nation's currency in an effort to address its 1,200% inflation. But what was intended to be a major economic reform ended in a nationwide chaos as Zimbabweans rushed into the streets to spend or deposit their old notes before they would lose their value on August 21. The government has allotted a three week transition period from the old to the new monetary unit. But the fact that it does not permit the people to carry more than $400 in cash has only made the situation more complicated. Now, the citizens are racing against time as they attempt to spend or deposit all their cash to the banks.

Meanwhile, UN officials in Liberia reported that the government and the United nations were reclaiming one of the major rubber plantations in the country. It must be noted that even after the war ended, the Guthrie plantation, which is found in the north-western region of the nation, has remained under the governance of former rebels. Rubber was among the major and the most important export product of the Liberia before the first civil war started in 1989. President Ellen Johnson-Sirleaf, who won the elections last January, has vowed to establish and implement the rule of law in the entire country. With the election of the Ms. Johnson-Sirleaf, the nation hopes that new changes and improvements would be made. She is Liberia's first elected leader after the 14 years of civil war ended. A huge task though lies before the leader who must look for measures in order to revive her country, whose rich resources have been damaged and exploited during the 2 civil wars.

In Thailand, the government announced its plans to enlist with the Madrid Protocol and the Patent Cooperation Treaty next year. According to IPD Director General Kanissorn Navanugraha, his country intends to build an integrated protection of its trademarks, patents, and copyrights. Joining the two organizations would be an important step into making sure that Thai products and inventions would attain global intellectual property fortification. Thailand is currently an affiliate of Berne Convention, an organization that deals with the protection of artwork and literary pieces.

Recently, the Center for Global Development (CGD) reported that among the 21 richest countries in the world, Netherlands gave the biggest amount of economic aid to the developing nations. While the United Kingdom ranked no. 12, Japan got the last place. CGD Chief Nancy Birdsall praised the continuous in flow of donations during the recent years for the reduction of poverty. The CGD said that nations could still do more in order to improve the international economic aid. The United States gave the highest amount of donation. But its aid was the smallest when it was measured against the size of its economy. Though the UK did not rank high in the aid category, it earned the first place in the investment section of the Index due to its efforts to improve technology and to open more employment opportunities to its people. Moreover, the nation got the top score for its efforts to protect and preserve the environment. According to David Roodman, the head architect of the CDI and a researcher of the CGD, if wealthy countries did more in reforming their migration, trade, and investment standards, they would contribute to the improvement of the lives of billions of people over the next years. He added that rich countries could still do more in boosting the economy of developing nations if they were truly devoted to development.

Tbc-world.com - Importers & Exporters database

Several Countries Record Rapid Economic Growth while Others Need to Do More

A recent study showed that Japan's economic growth is right on track thus supporting the decision of the Central Bank to increase interest rates. According to the report, the unprecedented increase of machinery demands last June indicated the improving confidence of companies to purchase new equipments. The Japanese government said that the demand for machineries rose by 8.5% last June, exceeding the rate predicted by economic experts. Deutsche Securities analyst Seiji Adachi said that the result of the study showed that Japanese companies were still confident to make more investments despite the concerns regarding the decline of the US economy. Amidst such optimism, some analysts still fear that Japan's economic recovery might be impeded by the current problems faced by the global economy. It must be noted that the rising oil prices have been the primary factors behind the global inflation.

Aside from Japan, Germany also recorded its highest economic growth rate in 5 years during the 2nd quarter of 2006. According to a recent report, the nation's economy improved by 0.9% from April to June despite the slow down in the export business. The significant development has been attributed to the increase of domestic demand for products. The 2006 World Cup held recently in the country was also seen as a major factor in boosting the nation's economy during the 2nd quarter. According to a research, the one month tournament had renewed and increased the confidence of German buyers. Although trade with other nations weakened during the past months, the German Federal Statistics Office said that the investments in equipment and construction materials have increased thus pushing the economy upwards during the 2nd quarter of 2006. The positive news, then, has indicated that the biggest economy in Europe is finally recovering from a long period of stagnation.

While the economies of Japan and Germany recorded rapid growth, US inflation grew last month due the rising prices of oil, as well as other energy supplies. The Consumer Price Index, then, jumped from 0.2% to 0.4% last July. According to analysts, the increase of the inflation was largely triggered by the 2.9% rise in prices of energy supplies particularly petrol. The core inflation, with the exemption of energy and food supplies, increased by 0.2%, which is lower than what was initially predicted by economic experts.

Zimbabwe's economy is also at a critical situation with its swelling inflation and currency crisis. A few weeks ago, the Central Bank of Zimbabwe decided to slash three zeros from the nation's currency in an effort to address its 1,200% inflation. But what was intended to be a major economic reform ended in a nationwide chaos as Zimbabweans rushed into the streets to spend or deposit their old notes before they would lose their value on August 21. The government has allotted a three week transition period from the old to the new monetary unit. But the fact that it does not permit the people to carry more than $400 in cash has only made the situation more complicated. Now, the citizens are racing against time as they attempt to spend or deposit all their cash to the banks.

Meanwhile, UN officials in Liberia reported that the government and the United nations were reclaiming one of the major rubber plantations in the country. It must be noted that even after the war ended, the Guthrie plantation, which is found in the north-western region of the nation, has remained under the governance of former rebels. Rubber was among the major and the most important export product of the Liberia before the first civil war started in 1989. President Ellen Johnson-Sirleaf, who won the elections last January, has vowed to establish and implement the rule of law in the entire country. With the election of the Ms. Johnson-Sirleaf, the nation hopes that new changes and improvements would be made. She is Liberia's first elected leader after the 14 years of civil war ended. A huge task though lies before the leader who must look for measures in order to revive her country, whose rich resources have been damaged and exploited during the 2 civil wars.

In Thailand, the government announced its plans to enlist with the Madrid Protocol and the Patent Cooperation Treaty next year. According to IPD Director General Kanissorn Navanugraha, his country intends to build an integrated protection of its trademarks, patents, and copyrights. Joining the two organizations would be an important step into making sure that Thai products and inventions would attain global intellectual property fortification. Thailand is currently an affiliate of Berne Convention, an organization that deals with the protection of artwork and literary pieces.

Recently, the Center for Global Development (CGD) reported that among the 21 richest countries in the world, Netherlands gave the biggest amount of economic aid to the developing nations. While the United Kingdom ranked no. 12, Japan got the last place. CGD Chief Nancy Birdsall praised the continuous in flow of donations during the recent years for the reduction of poverty. The CGD said that nations could still do more in order to improve the international economic aid. The United States gave the highest amount of donation. But its aid was the smallest when it was measured against the size of its economy. Though the UK did not rank high in the aid category, it earned the first place in the investment section of the Index due to its efforts to improve technology and to open more employment opportunities to its people. Moreover, the nation got the top score for its efforts to protect and preserve the environment. According to David Roodman, the head architect of the CDI and a researcher of the CGD, if wealthy countries did more in reforming their migration, trade, and investment standards, they would contribute to the improvement of the lives of billions of people over the next years. He added that rich countries could still do more in boosting the economy of developing nations if they were truly devoted to development.

Tbc-world.com - Importers & Exporters database

Relating The Macro Economy to Your Small Business

Unfortunately, there is a common notion that persists amongst members of the small business community that their business cycles depend more on local influences than the larger macroeconomic picture. As a small business owner you may sometimes have noticed some unexpected forces influencing your business, sometimes inexplicably for long periods of time.

Lets take a look at how some of the key macroeconomic indicators affect small businesses.

Macroeconomic Indicators And Your Life

The key macroeconomic indicators are:

1. GDP, i.e; Gross Domestic Product
2. Per Capita Income
3. Purchasing Power Parity
4. Inflation Rates
5. Unemployment Rates
6. Balance of Payment
7. Foreign Exchange Reserve
8. Current Account Balance
9. Fiscal Balance

The GDP And Small Business

GDP is the gross output of the entire nation across all sectors. GDP is expressed in trillions or billions of dollars, as the case may be, and the higher value reflects the overall growth over the previous accounting year. So how does it relate to your business? First, the GDP grows because of contributions made by everyone, small and big firms alike, across all sectors. As a result, the individual income grows leading to a higher rate of consumption, which is an all-around win-win situation. Today, over 76% of $12.6 trillion of the United States GDP is by service sectors which include countless small businesses. Interestingly, when GDP was growing negatively, you will recall how small businesses went through the ordeal.

Per Capita Income

Simplistically, Per Capita Income is the mathematical average income of individuals in a nation. This figure gives you a fair idea of your prospects. Lets say that a used car seller can expect higher sales if the per capita income shoots up. An increase in per capita income can be partly thought of as spare income in the hands of middle class families that they want to spend on travel, homes, cars, etc. This means that travel agents, real estate brokers/agents can expect brisk business.

Inflation And Unemployment Rates

Both these indicators are expressed in percentage terms over a corresponding previous term. An inflation rate of 2% represents that the cost of living has increased by 2%. Inflation triggers a tightening of the purse strings. Most people will put on hold, most unnecessary expenses like vacations, car loans, etc. If you are wondering why retailers increase discounts even during Christmas, this could be one of the reasons.

Unemployment, on the other hand, reduces the per capita income and purchase power of society as a whole. A change in fate of retail customers income and employment directly reflects on the fate of retail businesses.

Let's see what Balance of Payment (BOP), Current Account Balance and Fiscal Balance mean to small businesses. BOP is the difference in the countrys external trade payments. A negative BOP tells that the country is importing more products or at higher cost which ultimately burdens consumers in the domestic market in terms of shrinking trade volumes and margins. A negative fiscal balance increases the inflation rate and cost of living, and encourages erosion of capital.

No small business is insulated from economic factors or international events. Reading the indicators right is crucial for survival.

Energy Experts to Settle Gas Price Issue on Global Trade

Iran, India, and Pakistan recently agreed to delegate experts who would assume the task of resolving the price issue that has been affecting the global trade deal on gas planned by the three countries. According to resources, the huge pipeline project would transport natural gas from Iran to India with a distance of more than 2,500 km. If negotiations would go well, the project could start in 2007. Although the global trade deal was aimed for the benefit of the three parties, both Pakistan and India could not still agree with Iran as regards the price of gas supplies. The three nations, then, agreed to delegate independent energy experts in order to study the situation and come up with a plausible pricing solution.

Under the global trade deal, Iran wanted the gas prices to depend on the changes in the international energy markets. However, both India and Pakistan wanted the gas prices to be fixed. The huge project is reported to cost around $7 billion.

The global trade deal was first proposed ten years ago. But negotiations have stalled due to disagreements in terms of pricing. That was why the three countries decided to appoint special officials in order to settle the issue. The energy experts, who have not yet been selected until now, have the duty to come up with an effective solution during the next 4 to 5 weeks.

The three parties would then resume their discussions on the global trade deal, basing it on the new pricing formula. What is not clear though is whether the decision of the consultants will bind the three countries together. It is possible that one of them may still step out of the deal.

M. S. Srinivasan, India's Petroleum Secretary, said that there was still a disagreement between the two sides as regards gas prices. He added that all the three countries needed to be flexible in order to push through with the global trade deal on gas. Mr. Srinivasan though said that all the three sides remained bullish. While Iran said that it could trade its gas supplies elsewhere, both India and Pakistan responded by saying that they could also seek for other foreign suppliers.

If the global trade deal on gas materialized, India would be able to purchase up to 60 million cubic meters per day while Pakistan could buy as much as 30 million. The energy demand of both India and Pakistan are expected to increase by 50% in the succeeding years. The pipeline project would also be very advantageous for Pakistan since the nation could gain millions of dollars from transit fees. It must be noted that last May, negotiations among the three countries stalled due to the disagreement on gas. But if the issue would be resolved, the construction could begin next year while the operations could start in 2011. Previously, the United States had rejected the proposed global trade deal due to the strategic and financial benefits it would give Iran. However during his visit to Pakistan last March, President George W. Bush showed signs that the US had already dropped its opposition to the project.

http://www.tbc-world.com/Energy_Experts_to_Settle_Gas_Price_Issue_on_Global_Trade.asp

The Basics of Inflation

There is a lot of talk of inflation in the economic news lately. What does it mean?

Most of us understand the basic idea of inflation -- things cost more than they used to. In fact, that is pretty close to the Webster's definition. It is when prices go up. For example, I remember when I could put five dollars of gas in my little truck and drive for a week. Nowdays, five dollars gets me less than two gallons of diesel.

Inflation is at work.

Inflation has been pretty steady. Just a nice climb. In general, inflation has remained at an average of 3% for the past 30 years. We aren't doing that bad -- some countries have inflation above 1000% in one year.

Yes, sometimes it jumps, like in the 70's. But in general, we are doing well.

Okay, what causes inflation?

Inflation can be caused by many factors. Increases in taxes and government fees can lead to inflation. Things that cost businesses especially cause inflation. When the cost of a business goes up, the product prices go up. When prices go up on products and services, your income goes down (you are spending more of it). You have to work harder and longer to afford the same things. Or hope that you get a cost of living adjustment.

Which causes the business costs to go up and it all starts over again.

Inflation also occurs when your personal taxes, property taxes and sales taxes increase. You ask for an increase in your wages. Then business costs go up and so on.

When things become rare, inflation can occur. The more demand on an item, the more expensive it becomes. For example, if there is a drought and wheat does poorly, the price of wheat goes up. This may cause the price of wheat products to go up.

If interest rates increase, inflation can also occur. The cost to borrow money goes up for businesses, increasing their cost and so on. However, higher interest rates also encourage people to save more and spend less, shortening demand and lowering prices on items.

For the most part, steady inflation is not seen on a day-to-day basis. You usually only see it when you look back. I remember that 85 cent gasoline in high school. But you made a lot less in your job as well.

Why is inflation important to the individual? Well, when you are planning for the long term, it can hurt you a bit.

If you are 30 year old, you are around 30 years from retirement. You plan to retire at 60 with a million dollars. That sounds like a lot of money.

It may not be.

Factor in 3% inflation for 30 years and your million dollars will only buy you around $400,000 worth of goods and services. If you live 20 years after retirement, that's only $20,000 a year to live on.

Sixty percent of your money has gone to inflation. Can you live on that? You will need to save approximately $1.8 million and invest it at 5% after retirement in order to have the same amount of spending money as you do now.

So remember, inflation does really affect you. You should consider it when planning for the future. Other than that, there isn't much you can do. But you must factor it in.

A quick way to factor in inflation is to subtract the 3% inflation rate from your assumed rate of return. For example, if you expect a 13% return on your investment, inflation takes it down to a 10% rate of return. This will give you a picture of the value of your investment.

There are investments out there than benefit from inflation, such as real estate and precious metals. Look into diversifying your portfolio into different types of assets, not just different types of stocks.

Inflation is simply a fact of life. By accounting for it, you are prepared to fight it in the future.