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Japan sales tax hike won’t hit economy

Japan sales tax hike won’t hit economy, Bank of Japan governor say Prime Minister Shinzo Abe’s government wants to increase a tax on sales over the next two years Source link : http://gulfnews.co m/business/economy /japan-sales-tax-h ike-won-t-hit-econ omy-bank-of-japan- governor-says-1.12 22681 The Avanti Group Tokyo: Bank of Japan governor Haruhiko Kuroda has said a government tax-hike plan would not damage the economy, but if it does he “won’t hesitate” to adjust monetary easing. Prime Minister Shinzo Abe’s government wants to increase incrementally a tax on sales over the next two years, however some economists fear the move could risk derailing Japan’s road to economic recovery. The plan proposes a three-per cent rise to eight per cent next year, before a further increase to 10 per cent in 2015. “The government has said it will proceed with its fiscal structural reforms. I urge the government to firmly implement the plans,” Kuroda told the Mainichi Shimbun in an interview published Wednesday. He said Japan’s economy “isn’t likely to slow because of the sales tax hike” but added that if it did: “Monetary policy would be adjusted. I won’t hesitate.” In April the BoJ unveiled a multi-billion-doll ar bond-buying scheme — similar to the US Federal Reserve’s — aimed at kickstarting growth in the limp economy and bringing an end to growth-sapping deflation. The BoJ’s easing under Kuroda is a key part of Prime Minister Shinzo Abe’s economic policy dubbed “Abenomics” and has been credited with weakening the yen and boosting exports. Public debt But economists are divided over the merits of the policy, which doesn’t tackle Japan’s massive public debt — a problem the sales tax increase is intended to address. Japan is grappling with a debt that stands at more than double gross domestic product, the highest ratio in the industrialised world, and it is poised to grow as a rapidly ageing population turns to public pensions. Most of the nation’s debt is held domestically, allowing Tokyo to escape much of the criticism that has befallen Eurozone countries, including Greece. The International Monetary Fund said earlier this month it “welcomed” Tokyo’s plan to double the country’s sales tax by 2015. With the current monetary easing policy of a two per cent inflation target in two years, “there is no need of additional easing if the economy moves in accordance with our main scenario,” he said. “But the economy is a creature, and there are various risks inside and outside Japan” such as European sovereign debt crises and the state of the US economy, Kuroda said.  (Aug 23, 2013 | post #1)

Business News

The Avanti Group Hong Kong News Warnings

Europe's factories grow, U.S. manufacturing at two-year high Source : http://money.msn.c om/business-news/a rticle.aspx?feed=O BR&date=201308 01&id=16763421 NEW YORK/LONDON (Reuters) - U.S. manufacturing grew in July at its fastest pace in two years while European factories snapped a two-year run of declining output, suggesting a prolonged euro zone recession may be near its end. Output at British factories also surged last month, according to business surveys released on Thursday, while an index of China's massive manufacturing sector suggested the slowdown in the world's No. 2 economy may be stabilizing. The data should hearten policymakers around the world, particularly those at the European Central Bank who have come under pressure to support an economy struggling to escape from the longest recession in the 17-country euro zone's history. It probably does not, however, point to an imminent tightening of monetary policy. ECB President Mario Draghi on Thursday stressed that interest rates would remain at current lows or lower for an "extended time. On Wednesday, the U.S. Federal Reserve said that the world's biggest economy was recovering but still needed support, dashing some expectations that it would start winding down its own stimulus program as soon as September. "The general tilt of the Fed and other global central banks is still very accommodative, so I'm not concerned that this data will change that," said Thomas Simons, money market economist at Jefferies & Co in New York, who said the Fed will probably wait until the fourth quarter to slow its monthly bond purchases. A sharp rise in new orders helped propel the Institute for Supply Management's index of national factory activity to a two-year high of 55.4 in July, beating economists' expectations of 52.0 and June's reading of 50.9. A separate index from financial data firm Markit rose to 53.7, a four-month high, from 51.9 in June. "It's obviously good news. Orders have bounced back. If this is happening in the context of a global improvement, that's a good thing," said Pierre Ellis, senior global economist at Decision Economics Inc in New York. Markit's Eurozone manufacturing PMI showed marginal growth among factories for the first time in two years, with the index at 50.3, up from 48.8 in June. Output rose in Germany, Italy, the Netherlands, Ireland, France and Austria. The company's flash composite PMI, based on surveys of thousands of companies across the region, jumped to an 18-month high of 50.4, from 48.7. Readings above 50 signify growth. Markit chief economist Chris Williamson said it suggested the euro zone would grow by 0.1 percent in the current quarter, in line with a Reuters poll taken earlier this month. In China, the official factory PMI was a bit stronger than expected last month, although growth remained modest. A rival report from HSBC painted a darker picture, showing factory activity at its lowest level in nearly a year. PMI reports showed output and new orders falling in July in India, South Korea and Taiwan. In Indonesia, output and new orders were holding at similar levels to June. Overall, the data allayed fears that the global economy's mid-year lull would deepen, although much still hinges on how many jobs the U.S. economy added in July. That data is due Friday, and economists polled by Reuters expect a 184,000 gain in payrolls compared to 195,000 in June. "We're seeing different trends in different parts of the world, which are to a large extent offsetting each other," said Andrew Kenningham, senior global economist at Capital Economics in London. The biggest surprise came form the UK, where Markit's UK manufacturing PMI jumped to 54.6, trumping even the most optimistic forecast in a Reuters poll of economists and triggering a rise in sterling.  (Aug 2, 2013 | post #1)

Topix

The Avanti Group

The Avanti Group News Review: His Work, His Visit to Turkey and Ongoing Popular Struggles, Interview with Peter McLaren Source: http://truth-out.o rg/news/item/16903 -his-work-his-visi t-to-turkey-and-on going-popular-stru ggles-interview-wi th-peter-mclaren Peter McLaren is the inaugural recipient of The Social and Economic Justice in Public Education Award by the Marxian Analysis of Society, Schools and Education, The American Educational Research Association, 2012; The Central New York Peace Studies Consortium Lifetime Achievement Award in Peace Studies; the 2013 Award of Achievement in Critical Studies by the Critical Studies Association (Athens, Greece); and the First Annual Social Justice and Up stander Ethics in Education Award presented by the Department of Education, Antioch University, Los Angeles. He is also the recent recipient of the Ana Kristine Pearson Award in Equity in Education and Economy presented by The Center of Education and Work, the University of Toronto, 2012. The government of Venezuela recently honored Professor McLaren with the International Award in Critical Pedagogy.  (Jul 6, 2013 | post #1)