Peru's economic growth will be sub-par in 2015

Subject Obstacles to a rapid return to high growth rates. Significance Peru's central bank took steps in the first quarter to boost the economy by relaxing reserve requirements -- growth having fallen below 2.4% in 2014, from 5.8% the previous year. Slowing domestic demand paralleled the declining dynamism of the external sector. The government predicts a recovery in 2015, but much will depend on whether proposed mining projects come on stream. Impacts Depressed growth rates will provide a negative backdrop to next year's presidential elections. Foreign exchange reserves are still plentiful, and Peru can afford to see these fall in the short-to-medium term. Investors may become increasingly wary of the 'good news' pitch projected by the Ministry of Economy and Finance.

Significance As in 2020 and 2021, this projected growth will be driven by the ongoing expansion of the oil and gas sector, and related investment and state revenues. These rising revenues will support the government’s ambitious national development plans, which include both increased social and infrastructure spending. Impacts The government will prioritise enhancing the oil and gas investment framework. Investment into joint oil and gas infrastructure with Suriname will benefit the growing oil industry in both countries. The expansionary fiscal policy may lead to a rise in inflation, leading to further calls for wage increases. In the medium term, strong growth in the oil and gas sector could lead to increased climate change activism in the country.


mBio ◽  
2019 ◽  
Vol 10 (4) ◽  
Author(s):  
Katharina Kremer ◽  
Muriel C. F. van Teeseling ◽  
Lennart Schada von Borzyskowski ◽  
Iria Bernhardsgrütter ◽  
Rob J. M. van Spanning ◽  
...  

ABSTRACT During growth, microorganisms have to balance metabolic flux between energy and biosynthesis. One of the key intermediates in central carbon metabolism is acetyl coenzyme A (acetyl-CoA), which can be either oxidized in the citric acid cycle or assimilated into biomass through dedicated pathways. Two acetyl-CoA assimilation strategies in bacteria have been described so far, the ethylmalonyl-CoA pathway (EMCP) and the glyoxylate cycle (GC). Here, we show that Paracoccus denitrificans uses both strategies for acetyl-CoA assimilation during different growth stages, revealing an unexpected metabolic complexity in the organism’s central carbon metabolism. The EMCP is constitutively expressed on various substrates and leads to high biomass yields on substrates requiring acetyl-CoA assimilation, such as acetate, while the GC is specifically induced on these substrates, enabling high growth rates. Even though each acetyl-CoA assimilation strategy alone confers a distinct growth advantage, P. denitrificans recruits both to adapt to changing environmental conditions, such as a switch from succinate to acetate. Time-resolved single-cell experiments show that during this switch, expression of the EMCP and GC is highly coordinated, indicating fine-tuned genetic programming. The dynamic metabolic rewiring of acetyl-CoA assimilation is an evolutionary innovation by P. denitrificans that allows this organism to respond in a highly flexible manner to changes in the nature and availability of the carbon source to meet the physiological needs of the cell, representing a new phenomenon in central carbon metabolism. IMPORTANCE Central carbon metabolism provides organisms with energy and cellular building blocks during growth and is considered the invariable “operating system” of the cell. Here, we describe a new phenomenon in bacterial central carbon metabolism. In contrast to many other bacteria that employ only one pathway for the conversion of the central metabolite acetyl-CoA, Paracoccus denitrificans possesses two different acetyl-CoA assimilation pathways. These two pathways are dynamically recruited during different stages of growth, which allows P. denitrificans to achieve both high biomass yield and high growth rates under changing environmental conditions. Overall, this dynamic rewiring of central carbon metabolism in P. denitrificans represents a new strategy compared to those of other organisms employing only one acetyl-CoA assimilation pathway.


2017 ◽  
Vol 45 (3) ◽  
pp. 30-37 ◽  
Author(s):  
Steven Davidson ◽  
Wei Ding ◽  
Anthony Marshall

Purpose To better understand the challenges and opportunities facing China, the IBM Institute for Business Value in cooperation with Oxford Economics surveyed 1,150 executives from across China. Survey respondents represented a variety of industries and included executives from Chinese corporations, start-up enterprises, the government sector and educational institutions. Design/methodology/approach This report shares the executives’ vision for the Chinese economy, and proposes actions to help spark growth and positive change. Findings The Chinese executives surveyed see the current economic environment in China as encompassing five main challenges – immature services sector, declining domestic consumption growth, lending decisions creating over investment in some sectors, declining export growth and environmental issues impacting economic development. Practical implications The article identifies the six most important ways to accelerate China’s growth according to the executives: Originality/value Despite challenges, Chinese executives are optimistic about the country’s economic growth prospects. In fact, 93 percent of executives believe China will maintain stable to high growth of more than 5 percent over the next five years. And almost a quarter of them believe China will be able to return to its recent very high growth rates in excess of 8 percent.


Subject Mexico's external accounts. Significance The plunge in global oil prices represents a significant blow to the Mexican economy, particularly in terms of fiscal revenue. However, a negative impact is also showing in Mexico's external accounts. Moreover, manufacturing exports are contracting, partly due to problems in the automotive sector. Mexico's floating exchange rate is acting as an effective cushion, and its level of international reserves remains comfortable. Nonetheless, the growing external deficits may spark greater uncertainty about the economy's prospects. Impacts If market confidence deteriorates further, the government may activate the 65-billion-dollar Flexible Credit Line that it has with the IMF. The peso should rebound from the all-time nominal lows it has reached, but only after US growth firms up and the oil price stabilises. Despite the increasing external deficits, the government will not introduce protectionist measures and the opposition will not demand them.


Significance The government's struggle to stave off economic collapse has become increasingly frantic, as inflation has surged, the gap between the official and black market exchange rate has reached or exceeded 100%, and consumers have difficulty finding basics such as sugar and rice. Impacts Increased incidents of popular protests and political dissent reflect worsening economic conditions. Measures to be taken as part of the IMF deal, notably devaluation and further subsidy cuts, could exacerbate social and political tensions. Sisi will deflect some of the blame for the economic crisis onto the government and the central bank. If the government survives this crisis, the economy could recover in the medium term.


Significance After four sluggish years, economic growth has been picking up steadily since mid-2017. However, as noted by Moody’s, medium-term prospects remain hampered by reliance on copper exports as, in the shorter term, has also been apparent in the context of the tariff war between the United States and China. Impacts According to the IMF, Chile will be the region’s fastest-growing economy this year, just ahead of Peru. The government will walk tightrope between a need for fiscal austerity and social demands. The tariff war will underscore the pressing need for diversification out of commodity exports.


Subject Nigerian self-sufficiency push. Significance The government has renewed efforts to prioritise food self-sufficiency and modernise farming practices. However, despite the impetus to drive sector growth and diversify away from oil, necessary wider structural reforms have stalled. Impacts Big-ticket programmes will attract most international focus despite the investment potential in Nigeria's mainly small-scale holdings. Growth in agricultural output will remain low in the medium term as inefficiencies persist and core inflation remains elevated. The government’s import ban may aid domestic production targets but will further encourage a flourishing ‘grey market’ (eg, parboiled rice).


Significance The Law and Justice (PiS) government has already enacted a bill changing the appointment system for the National Council of the Judiciary and another bill makes the justice minister solely responsible for selecting heads of district and appeal courts. After almost two years in power, the government is defying its critics and remains surprisingly strong and stable. It enjoys high popular support, presides over vigorous economic growth and has a stable working majority. Impacts Relative political stability and favourable economic conditions will encourage investors in the short-to-medium term. Concerns over the rule of law, especially judicial independence, may undermine Poland's long-term position. Growing political isolation will make it hard for Poland's voice to be heard in debates about the EU's future after Brexit.


Significance Despite its commitment to a floating exchange rate, the government has been forced to prioritise exchange rate stabilisation. After the change of Central Bank (BCRA) authorities in mid-June failed to stop the latest currency run, the government further tightened monetary policy. Aiming to alleviate fears of a new medium-term debt default, the government is emphasising its commitment to fiscal adjustment, even including the possibility of new taxes, which runs counter to efforts to reduce tax pressure. Impacts Interest rate rises and closer control of monetary aggregates may prompt a recession. Depreciation will help to reduce the current account deficit in 2018 but will worsen debt indicators. Growing political uncertainty and difficulty in cutting public spending will sustain financial volatility.


Significance A week previously, new Finance Minister Tito Mboweni’s Medium-Term Budget Policy Statement (MTBPS) showed a worrying deterioration in deficit and debt ratios. However, President Cyril Ramaphosa’s administration has received good news in the form of 20 billion dollars in new investment pledges following the government's Investment Conference. Impacts Maintaining the expenditure ceiling pleases the market but could undermine service delivery and infrastructure spending. Recent poor polling numbers for the ANC could see growing internal pushback against government reform proposals. Lingering uncertainty over property rights due to government expropriation proposals will remain a concern to rating agencies and investors.


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