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“PIIGS” we are informed in the current Wikipedia entry “is a pejorative acronym used to refer to the economies of Portugal, Italy, Greece and Spain. Since 2008, the term has included Ireland, either in place of Italy or with an additional I.” With apologies, I am joining the ranks of contributors to such august publications as the New York Times,Wall Street Journal, Financial Times and The Economist who have used this handy label as a linguistic convenience and, I believe, with no aspersions intended. My topic is the relative size of these five countries in a basic economic sense  to one another and to the world as a whole. To make comparisons, I’m using GDP based onpurchasing power parity (PPP). My source for the data is the IMF (International Monetary Fund), specifically the IMF’sWorld Economic Outlook Databases.

An important gauge of China’s manufacturing sector has weakened sharply, adding to the pressure on the government to take more decisive action to support the flagging economy. The official purchasing managers’ index for manufacturing fell to 50.4 in May, its lowest in five months, from 53.3 in April. Although it was the Chinese PMI’s sixth straight month above the 50 level, which signals an expansion of activity, the fall in the index highlighted a clear softening of growth momentum. High quality global journalism requires investment. As the first item of official economic data for May, the PMI offers a timely glimpse into how the Chinese economy performed over the past month. Many analysts and officials had believed that China was on track for a “soft landing” until a raft of poor data in April led to a flurry of growth forecast downgrades.

The dramatic drop in Indian economic growth isn’t bothering the likes of Mahendra Saraf. A farmer, he works in a sector that has seen growth shrink to 1.7 per cent in the first three months of 2012 against 7.5 per cent in the same period last year. But Mr Saraf, 26, is confident the blow to his profits will be cushioned by government agricultural subsidies. “Global and domestic demand was not been very strong,” he says, “but the government buys excess grain at a fixed price, so we will get that money anyway.” High quality global journalism requires investment. Such safety blankets the size of which vary from state to state and industry to industry are among the targets of those who say the government of Manmohan Singh needs to take radical measures to restore growth in the Indian economy. With growth in the first quarter of 2012 rising at 5.3 per cent, the slowest rate in nine years, policy makers are panicking about how to turn things around. “It’s an absolute disaster,” says Omkar Goswami, head of the Corporate and Economic Research Group in New Delhi. “We went from nearly growing at 10 per cent to 5 per cent in less than two’s very, very concerning.”

Madrid was dealt a double blow on Thursday after it emerged that almost €100bn in capital had left the country in the first three months of the year and the head of the European Central Bank lambasted its handling of Bankia, the troubled Spanish lender. Data published by Spain’s central bank showed €97bn had been pulled out in the first quarter around a 10th of the country’s GDP as concerns mounted over Madrid’s ability to contain its twin economic and financial crises, which have forced government borrowing costs to euro-era highs.

Poland’s economy remained resilient in the face of the eurozone crisis, with data on Thursday showing the country’s gross domestic product grew 3.5 per cent year on year in the first quarter, largely on the strength of domestic demand.  However, the underlying data suggest that the Polish economy may not be able to continue defying gravity for much longer. The GDP increase was in line with analysts’ expectations, and showed a slight slowdown from the last quarter of 2011, when the economy was growing at a pace of 4.3 per cent year on year.

Brazil has raised taxes on motorcycles, air conditioners and microwave ovens in its latest move to cut imports and stem a prolonged contraction in the country’s manufacturing sector. The industrial production tax on motorcycles made outside the Amazonian tax-free zone of Manaus, the centre of most of the country’s two-wheeler production, was raised to 35 per cent from 20 per cent. The measure, which applies to domestic and foreign producers alike, follows a series of similar steps to protect industry and sparked a heated response from importers.   “There is a strong lobby urging the Brazilian government to control imports and raise taxes,” said Ivan Ramalho, president of Abece, an industry group representing international trading companies. “The government should resist this lobby.”
European Central Bank President Mario Draghi urged Europe’s political leaders to quickly come up with a longer-term vision for the euro zone including a “banking union” to protect depositors and prevent failed banks from threatening the financial system. In testimony to the European Parliament, Mr. Draghi criticized the efforts by national regulators to get a handle on the state of their countries’ banks, saying some have made it far more expensive to recapitalize struggling financial institutions. 

Spain’s government says it has until at least October to raise the funds it needs for the €19 billion ($23.5 billion) rescue of lender Bankia SA, BKIA.MC +0.19%a move government officials hope will let Madrid pick the right moment to raise funds from financial markets and explore other funding options as it aims to avoid an international bailout. Investors have recently shed Spanish bonds over fears about Spain’s banking system, boosting the government’s borrowing costs and raising concerns that Madrid won’t be able to fund its planned rescue. Spain’s bank-bailout fund has around €12 billion of funds on hand following a recent capital increase and other adjustments, and officials say they have a few months to raise the remaining funds needed for Bankia. The plan is to give the ailing bank €7 billion in July and then €12 billion in October. “We don’t have to raise the money right away, and when we do, it doesn’t have to be all at once,” a government spokeswoman said.

Signs of slower Asian economic growth are raising questions about demand there for European luxury goods. The sector’s prospects in recent years have become inextricably linked with the fortunes of China and other so-called Asian tigers. While makers of high-end products look likely to defy a downturn, analysts say, they will have to adjust to mere single-digit growth rather than the sparkling sales figures of the past few years.

Expectations of a cut in Australian interest rates are on the rise, with two of the country’s big four banks forecasting such a move by the Reserve Bank of Australia when the central bank meets on Tuesday. Both Westpac and National Australia Bank said growing fears of a slowdown in China and a widening European debt crisis should see the RBA cut the official cash rate again at its policy meeting.
Activity in Australia’s manufacturing sector fell to its lowest level in nine months in May, which may stoke concerns that the non-mining sector of the economy is in trouble and further interest rate cuts are needed. The seasonally adjusted Performance of Manufacturing Index fell 1.5 points to 42.4 in May, well below 50 which indicates a contraction in activity.

Expectations of a cut in Australian interest rates are on the rise, with two of the country’s big four banks forecasting such a move by the Reserve Bank of Australia when the central bank meets on Tuesday. Both Westpac and National Australia Bank said growing fears of a slowdown in China and a widening European debt crisis should see the RBA cut the official cash rate again at its policy meeting. “Elevated European uncertainties and signs of slower activity in China and India–as well as weaker commodity prices–lead us to think that… the RBA may be inclined next week to try to boost domestic confidence further by cutting rates by 25 points,” NAB chief economist Alan Oster said Thursday.
Brazil’s ex-president Luiz Inácio Lula da Silva said on Thursday he may run for president again in 2014 if he is needed to prevent the victory of the party that governed before his two-term 2003-2011 presidency. “The only situation under which I’d be a candidate again is if she (current President Dilma Rousseff) doesn’t want the job,” Lula said on the O Ratinho, or “the Rat” TV show on the country’s SBT network. “I will not permit a member of the PSDB to become president of Brasil again.” Lula, a former metalworker and union leader, was elected president in 2002 and took over the presidency from Fernando Henrique Cardoso on January 1, 2003. Cardoso is a member of the center-left Brazilian Social Democracy Party, or PSDB.
, India and Singapore posted the biggest increases in millionaires last year as the Asia-Pacific region countered a decline in wealth in western Europe and the U.S., according to Boston Consulting Group. Millionaire households in China rose 16 percent to 1.43 million while those in Singapore climbed 14 percent to 188,000 and India saw a 21 percent increase to 162,000, the Boston-based firm said in a report released today. Millionaire households in the U.S. fell by 129,000 to 5.13 million.

China will be able to “cope” if Greece leaves the euro region and no large-scale stimulus is needed for the economy, a researcher for the nation’s top economic planning body said. “Assuming a Greek exit would lead to a financial and economic crisis as damaging as the collapse of Lehman Brothers, China would be able to cope,” the official Xinhua News Agency reported yesterday, citing Zhang Yansheng, secretary-general of the Academic Committee of the National Development and Reform Commission

Acer Inc., Toshiba Corp. (6502) and Asustek Computer Inc. (2357) will unveil tablets running Microsoft Corp.’s Windows 8 operating system next week, people with knowledge of the matter said, challenging the dominance of Apple Inc. (AAPL)’s iPad. Acer will display a tablet based on Microsoft’s new software at the Computex show in Taipei, while Toshiba will show a tablet and a notebook-type device, said the people, who asked not to be identified because the plans haven’t been made public. Asustek will present tablets with detachable keyboards similar to its current Transformer model, the people said.

Canadian growth probably stagnated at the start of the year as consumers restrained their spending, giving Bank of Canada Governor Mark Carney more reason to further delay raising interest rates. Statistics Canada will report the economy grew at a 1.9 percent annual pace in the January-March period, little changed from 1.8 percent in the prior quarter and less than Carney’s forecast of 2.5 percent growth, according to the median forecast in a Bloomberg News survey of 25 economists. Domestic demand probably increased at a 1.2 percent rate, the slowest since the recession that ended in 2009, according to Bank of Montreal. “Tentative consumers and cautious businesses are keeping growth restrained,” said Benjamin Reitzes, an economist at the Toronto-based lender. With government spendingalso expected to be weak, the central bank will probably “take a bit more of a cautious tone” in its June 5 interest-rate announcement.
China’s currency dropped further in May against the dollar than in any other month since the Chinese government began allowing the renminbi to appreciate gradually in the summer of 2005. The shift could help Chinese exports but worsen trade friction with Europe and particularly the United States. By setting weaker and weaker daily “fixings” for the renminbi against the dollar at the start of each day’s trading, China’s central bank has pushed down the renminbi 0.9 percent against the dollar over the last month. The decline in the daily fixings coincides with signs that the Chinese domestic economy is slowing sharply this spring and may need help from stronger exports.
The debt crisis and central bank policy responses have degraded the quality and value of debt markets and signal a “potential breaking point” in the global economy, PIMCO’s Bill Gross, manager of the world’s largest bond fund, said in his monthly letter to investors. In his June outlook entitled “Wall Street Food Chain,” Gross said stimulus policies by the Federal Reserve and the European Central Bank have led to riskier government bonds with lower value and paved the way for higher inflation.

Some 15 million to 60 million jobs could be created worldwide over the next two decades if nations took better care of the planet, according to a U.N. study released Thursday ahead of an international summit on sustainable development. The study acknowledges that some jobs would inevitably be lost by switching to a “greener” economy as older technologies give way to the new. But the heads of the U.N.’s International Labor Organization and the U.N. Environment Program emphasized that net gains of 0.5% to 2% in total global employment are possible, mainly through more renewable and efficient energy use.
Spain’s economy minister has dismissed talk of it seeking a bailout from the International Monetary Fund (IMF) as “senseless”. And the IMF denied that Spain had asked to discuss rescue loans. The IMF has contributed to bailouts of all the other eurozone nations, such as Greece, that needed help. Meanwhile, the European Central Bank (ECB) president Mario Draghi described the current set-up of the eurozone as “unsustainable”.

The British Chambers of Commerce (BCC) has slashed its forecast for economic growth this year, from 0.6% to 0.1%. But the group, which represents more than 100,000 businesses, raised its forecast for 2013 from 1.8% to 1.9%. The data, in the BCC’s latest Quarterly Economic Forecast, follow official figures showing that the UK has returned to recession. BCC director-general John Longworth called for more “enterprise-friendly” action from the government.
The number of Americans filing new jobless claims climbed 10,000 to 383,000 last week, according to the Labor Department. A separate survey from ADP Employer Services reported that 133,000 jobs were created in May compared with a forecast of 150,000. Signs that the job market is stalling is troubling because it has proved the brightest part of the US economy so far this year. The data is likely to be seized on by Mitt Romney, who this week became the official Republican candidate in November’s presidential election. The news from the labour market came as official estimates for how rapidly the economy grew in the first three months of the year were cut. Gross domestic product expanded at a 1.9pc annual pace in the first quarter, the Commerce Department said, down from an earlier estimate of 2.2pc.
Home values fell the most in at least six years in May defying Reserve Bank efforts to spark a recovery in the nation’s lacklustre housing market with interest rate cuts. Melbourne led declines. Residential property values slid 1.4 per cent across all capital cities in May, and are now down by more than 5 per cent from a year earlier, according to property analysts RP Data. The monthly fall was the biggest since the series began in June 2006, Bloomberg analytics show.

Gold futures fell in New York, capping the longest monthly slump since 2000, as Europe’s worsening debt crisis and signs of a US economic slowdown crimped demand for the precious metal. Advertisement: Story continues below  Gold futures for August delivery retreated 0.1 per cent to settle at $US1564.20 an ounce on the Comex in New York. The precious metal retreated 6 per cent this month, the biggest drop this year as the dollar rallied 5.4 per cent. Holdings in the bullion-backed exchange-traded products are set for a third monthly decline, data compiled by Bloomberg show.

Oil prices have dived to fresh multi-month lows, driven by weak data in top global crude consumer the United States, and as the dollar rallied on worries of a possible Spanish bailout, dealers say. In late afternoon trade, Brent North Sea crude for July slumped to $US101.27 per barrel, which was the lowest level since October 5. New York’s main contract, West Texas Intermediate crude for delivery in July, tumbled to $US85.86 a barrel, which was last seen on October 24.
The majority of Spanish banks, 70 per cent, will pass the International Monetary Fund’s (IMF) stress tests of the country’s lenders, Economy Minister Luis de Guindos said Thursday. The IMF will on June 11 publish results of its tests of how Spanish lenders – struggling with bad real estate loans following the 2008 collapse of a property bubble – would fare if the economy were to decline further. ‘What it will say fundamentally is that 70 per cent of Spanish banks are perfectly healthy and that problems are concentrated in the remaining 30 per cent,’ Mr De Guindos told an economic conference in the resort town of Sitges.
Indonesia annual inflation rate in May accelerates at slower phase as food and clothing prices decline, allowing the central bank to keep its benchmark interest rate unchanged on its upcoming meeting earlier this month as the pressure on rupiah rises. Head of National Statistic Bureau named only Suryamin announced on Friday that the inflation in May decreased to 4.45 percent on yearly basis after accelerating at 4.5 percent in April. He said that there were deflation on the prices of unprocessed foods and clothes, but the prices of processed foods increased in May. Analyst from CIMB Niaga bank Winu Wardana said that should the trend of decline of inflation continue and the subsidized-fuel prices had not been conducted, the central bank may cut its basic rate in coming months, but for this month, the bank could refrain from cutting rate to support weakening rupiah against the pressure from U.S. dollar.

South Korea’s consumer prices rose 2. 5 percent in May from a year earlier, staying below the midpoint of Bank of Korea (BOK)’s inflation target band of 2-4 percent, a report showed Friday. Consumer prices advanced 2.5 percent in May from a year before, unchanged from a 2.5 percent on-year gain tallied in the previous month, according to Statistics Korea. From a month earlier, the prices were up 0.2 percent. The consumer price growth stayed at the 2 percent range for three straight months last month, boosting expectations that the easing inflationary pressures would weigh less on the BOK’s normalization of the policy rate. The central bank kept the policy rate at 3.25 percent last month for 11 straight months.

The Russian ruble fell to a 37-month low Thursday as one U.S. dollar traded for over 33 rubles on the Moscow Interbank Currency Exchange. The last time the ruble was traded at that level occurred in April 2009. According to the MICEX website, at the start of the “tomorrow” trade session at 10 a.m. Moscow time (0600 GMT), the ruble fell below that psychologically important level briefly and slightly recovered later. The Russian Central Bank (CB) official exchange rate for Thursday was 32.45 rubles per dollar. Analysts say the ruble depreciation was linked to the Brent oil price drop to its May 2009 level and to the speculative operations of currency traders. This week, the Russian Central Bank started selling U.S. dollars on the MICEX for the first time since January, selling about 70 million dollars on Wednesday in an attempt to break the swift depreciation of the ruble.
If there is one thorny issue that policymakers need to squarely address to spur growth, it is the falling investment rate or Gross Fixed Capital Formation (GFCF).  The revised estimates of national income for 2011-12 released by the Central Statistics Office (CSO) on Thursday revealed that GFCF has fallen to 29.5 per cent of GDP at current prices for that year.  This is the first time that GFCF has gone below 30 per cent since 2004-05, compounding problems for the Government, which is already buffeted by such challenges as reform inertia and criticism over retroactive changes to income-tax law.  The economy registered a lower-than-anticipated growth of 5.3 per cent in the fourth quarter of 2011-12, confirming that slowdown in Asia’s third largest economy is deepening. In the same quarter last year, the economy had clocked 9.2 per cent growth.
The government, which has often appeared to be in denial, blaming troubles in Europe for the economy’s predicament, appeared to hit the panic button on Thursday evening, asking all ministries to cut non-plan expenditure by 10% and banning creation of new posts. Gross domestic product, or GDP, rose 5.3% in the three months to March from a year ago, down sharply from 6.1% in the previous quarter, the Central Statistical Office said in a statement on Thursday.  Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. “It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power,” C Rangarajan, chairman of Prime Minister’s Economic Advisory Council told ET.

It was not only the meager 5.3% GDP growth in the fourth quarter of 2011-12 that disappointed economists on Thursday. Analysts continued to be baffled by the shoddy quality of expenditure estimates in the latest national accounts compiled by the Central Statistical Organisation in the Ministry of Statistics and Programme Implementation.  The recent data release shows that India had a $10-billion trade surplus in the fourth quarter of 2011-12. Based on this surplus, India’s GDP grew by 5.3%.  However, analysts argue that such a trade surplus is invalidated by the huge current account deficit that India had during the period.  “The trade surplus number is not compatible with the current account deficit. So, if one considers the Q4 (2011-12) growth net of foreign trade, growth has actually slipped to 1.5%,” said Sujan Hajra, Chief Economist & Executive Director, Anand Rathi share and stockbrokers.

India’s key infrastructure industries grew 2.2% in April from a year ago, marking a sluggish start to the new financial year after the economy expanded at is slowest pace in nine years in 2011-12. Output at eight core industries-coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity- had risen 4.2% in April 2011 and 2.2% in March this year, data released on Monday showed. These industries have a 38% weight in the index of industrial production or IIP, suggesting a poor industrial growth for yet another month, after a 3.5% contraction in March.
The government will move to increase the country’s reserves for farm and fishery products in an effort to help stabilize consumer prices, the finance ministry said Friday. At a meeting of economic policymakers, the government said it plans to actively buy up farm products in advance and hold them in reserve to deal with a supped spike in prices. It added emergency imports of products that are in short supply can also be utilized to help increase the stockpile and alleviate inflationary pressure. “Seoul will increase its stockpile of such products as cabbages to 20,000 tons this year from 8,400 tons in 2011, with numbers for chili peppers and fisheries also being increased,” the ministry said in a press release.
South Africa’s trade deficit widened to R9.9bn in April from a R5.5bn shortfall in March, the South African Revenue Service said on Thursday.  Exports fell by 14.9% and imports were down by 7.2% on a month-on-month basis in April of this year, the data showed. Economists had expected a R4.5bn trade gap, although the data is volatile and hard to forecast.  The trade deficit was R2.4bn in April 2011.
India and Bahrain announced the signing of a Tax Information Exchange Agreement to promote economic and joint investment between the two countries. According to the International Monetary Fund, total trade between the two countries currently amounts to $1.7bn a year, with this agreement aimed at boosting that number.  The agreement was one of a number signed during a two-day state visit by a senior Bahrain delegation led by Salman bin Hamad Al Khalifa, the Crown Prince of Bahrain and chairman of the Bahrain Economic Development Board, or EDB, including representatives from the EDB, Bahrain Chamber of Commerce & Industry, or BCCI and members of the private sector. The delegation was visiting Mumbai and Delhi to strengthen bilateral relationships between the business communities and to highlight investment opportunities in the Kingdom. In addition to the Tax Information Exchange Agreement, a number of commercial and economic cooperation agreements were also signed.

via zerohedge