Brazil's trade surplus rises amid economic crisis

2015 ◽  
Keyword(s):  
Economic Crisis ◽  
Emerging Economies ◽  
Trade Balance ◽  
Foreign Currency ◽  
Domestic Demand ◽  
Trade Surplus ◽  
Content Type ◽  
Relative Gains ◽  
Positive Effect ◽  
Better Than

Subject The improving trade balance. Significance At the close of September, Brazil recorded a better-than-expected trade surplus of some 2.9 billion dollars. This result is the best for the month since 2011, and reflects exports of 16.1 billion and imports of 13.2 billion. Brazil's trade surplus from January-September topped 10.2 billion dollars, the highest for the period since 2012 and a sharp contrast with the 742 million dollar deficit recorded in the year-earlier period. Impacts Exports may help boost the economy at a time when domestic demand is contracting due to the recession and falling income. The sharp fall in the real favours exporters, but also increases the burden of those with substantial foreign currency debts. The positive effect of depreciation may be insignificant if its impact on inflation undercuts competitiveness gains. Other major emerging economies, too, have seen significant depreciations, undermining relative gains in Brazil's competitiveness.

scholarly journals Organising household consumption and occupational proportions

2018 ◽  
Vol 26 (4) ◽  
pp. 748-772
Author(s):  
Tolu Olarewaju
Keyword(s):  
Developing Countries ◽  
Occupational Status ◽  
Household Consumption ◽  
Quantile Regressions ◽  
Content Type ◽  
Self Employment ◽  
Causality Tests ◽  
Positive Effect ◽  
Practical Implications ◽  
Better Than

Purpose The purpose of this paper is to contribute to the occupational status and entrepreneurship research in developing countries by proposing that there are implications for household consumption depending on the occupational status proportion of households. When the occupational proportion of the household changes, household consumption is affected. This effect also changes depending on what quantile level the household is in terms of household consumption. Design/methodology/approach The paper makes use of OLS and quantile regressions to examine 6,919 households comprising 40,294 individuals from the 2009 Nigerian Living standards measurement survey. Findings The paper finds that there are implications for household consumption based on the proportion of individuals in each occupational category. The contributions of each employment proportion changes at different quantiles with self-employed individuals increasing household consumption at the lower quantiles but reducing household consumption at the upper quantiles. Crucially, having a higher proportion of unemployed individuals in the household is oftentimes better than having a higher proportion of own account self-employed individuals. Research limitations/implications This paper offers new insights into how occupation proportion influences household consumption in developing countries. As a result, the household could seek to organise its members in such a way as to maximise combined household consumption, as diverse occupational statuses contribute differently to the household consumption at different quantile levels. The nature of the data used in this study however does not allow for causality tests. Practical implications The proportion of employment statuses in the household has implications for household consumption and so the mix of employment in the household is important. The self-employed could also be involved in activities to enhance household consumption that are not captured by labour income. However, self-employment does not seem to always have a positive effect on household consumption and sometimes unemployment might be better. Originality/value The paper provides a new way to view the household as an organising entity in terms of how it can allocate employment proportions to maximise household consumption.

Zimbabwe economic crisis may escalate further

2019 ◽  
Keyword(s):  
At Risk ◽  
Public Relations ◽  
Economic Crisis ◽  
Foreign Currency ◽  
Fiscal Deficit ◽  
Content Type ◽  
International Public Relations ◽  
The Us ◽  
Funding Programme ◽  
Us Dollar

Significance Since the abandonment of the multi-currency regime in June, the new Zimbabwe dollar has lost almost 60% of its value relative to the US dollar. The parallel market for foreign currency has re-emerged, forcing the authorities to adopt increasingly draconian measures to enforce the use of the new currency. Meanwhile, more than half of Zimbabweans are at risk of being food insecure. Impacts Despite hiring several international public relations firms, Harare will continue to suffer reputationally amid a renewed crackdown. As the authorities attempt to support the Zimbabwe dollar and re-balance the fiscal deficit, further austerity measures are likely. While Harare hopes austerity measures will help regain IMF confidence, a new funding programme in early 2020 is now unlikely.

Agriculture is rare bright spot in Ukraine economy

2015 ◽  
Keyword(s):  
Winter Wheat ◽  
Trade Balance ◽  
Agricultural Land ◽  
Foreign Currency ◽  
Primary Source ◽  
Arable Soil ◽  
Bright Spot ◽  
Content Type ◽  
Large Crop

Subject Ukraine agriculture. Significance This month sees the half-way point in the annual harvest of winter wheat. An abundance of fertile arable soil has long let agriculture be among the best-performing parts of the economy. Unlike the economy at large, the sector has proved surprisingly resilient to the effects of Ukraine's descent into economic turmoil last year and the disruptive war with separatists in Donbas. Impacts Agriculture is likely to become increasingly the dominant sector and more valuable for the economy than mining or metallurgy. Large crop sales will make agriculture the primary source of foreign currency revenue and main hope for improving the trade balance. Even if land sales moratorium is lifted, ban on sales of agricultural land to foreigners is likely to be remain due to protectionism.

Germany’s trade surplus benefits the euro-area

2018 ◽  
Keyword(s):  
Euro Area ◽  
Domestic Demand ◽  
Growth Potential ◽  
Gdp Growth ◽  
Trade Surplus ◽  
The Czech Republic ◽  
Content Type ◽  
The World ◽  
The Eu

Subject Germany’s trade surplus. Significance Germany runs a large trade surplus with other euro-area countries and the rest of the world. Critics have argued that wages in Germany have not increased enough in recent years and that the country should boost domestic demand. However, trade and wage developments with other euro-area countries show that such criticism is largely misguided. Impacts Germany’s offshoring of production processes helps boost GDP growth in countries such as Slovakia and the Czech Republic. Creating a more innovation-friendly environment and investing in R&D would lift the long-term growth potential of the euro-area. Completing the digital single market could contribute to more innovation across the EU.

Nigeria forex restrictions are unsustainable

2021 ◽  
Keyword(s):  
Exchange Rate ◽  
Commercial Banks ◽  
Foreign Currency ◽  
Domestic Demand ◽  
Short Term ◽  
Content Type ◽  
Goods And Services ◽  
Special Drawing ◽  
Special Drawing Rights ◽  
The Cost

Significance Instead it ordered that all foreign exchange purchases should occur through commercial banks. This move aims to stabilise the value of the naira by reducing effective domestic demand for foreign currency. Impacts The CBN may allow commercial banks to provide forex to retail dealers as an alternative policy. The cost of imported goods and services will increase. A USD3.35bn IMF special drawing rights (SDR) allocation will bolster Nigeria’s short-term reserve position. Full exchange rate unification will not occur under President Muhammadu Buhari’s administration.

scholarly journals Valor agregado en el valor bruto de las exportaciones: una mejor métrica para comprender los flujos comerciales entre Estados Unidos y México

2020 ◽  
Vol 32 ◽  
pp. 1-19
Author(s):  
Noé Arón Fuentes Flores ◽  
Alejandro Brugués Rodríguez ◽  
Gabriel González König
Keyword(s):  
Trade Balance ◽  
Foreign Currency ◽  
Value Added ◽  
Content Increase ◽  
Net Income ◽  
Trade Surplus ◽  
Domestic Activity ◽  
Multiplier Effect ◽  
Bilateral Exports ◽  
The U.S

NAFTA has been consistent with a trade surplus for Mexico over the U.S. according to traditional international trade statistics. However, using a bilateral input-output table that allows calculating each country’s value-added in exports, the trade balance between these two partners is modified. The flow of value-added in gross exports from Mexico to the U.S. reaches 164.4 billion dollars while the same from the U.S. to Mexico is 188.7 billion. The disaggregation of value-added highlights an important difference between domestic and foreign components incorporated in exports, because while for the U.S. the foreign value added in its exports reaches 2.5 billion, in the case of Mexico this concept is 50.2 billion. It is more than 20 times the U.S. figure. A directly derived conclusion from this is that during NAFTA an important part of the income from Mexican exports was used to remunerate productive factors used in the U.S. via imports. Another is that any modification of the NAFTA (related to a foreign content increase) will imply for Mexico a lower net income of foreign currency for each dollar exported. Consequently, foreign trade will have a smaller multiplier effect on Mexican domestic activity, given the bilateral exports boost will leak indirectly to the U.S.

Politics may compound Sudan’s economic crisis

2018 ◽  
Keyword(s):  
Economic Crisis ◽  
Foreign Currency ◽  
South Sudan ◽  
Content Type ◽  
Important Constraint ◽  
Temporary Relief ◽  
The Government

Significance This follows a major devaluation of the Sudanese pound in early October, which the government hopes can stabilise runaway inflation and lure foreign currency back into circulation through official channels. Impacts The resumption of debt repayments from South Sudan will provide only temporary relief from external distress. Limits on cash withdrawals from banks may be the most important constraint to attracting dollar deposits post-devaluation. With infrastructure spending at just 0.8% of GDP, it could take decades to rebuild investment competitiveness.

Hryvnia collapse will put Ukraine's stability at risk

2015 ◽  
Keyword(s):  
At Risk ◽  
Central Bank ◽  
Foreign Currency ◽  
Domestic Demand ◽  
Content Type ◽  
Defence Spending ◽  
Gas Price ◽  
First Time ◽  
To Receive

Significance In order to receive new IMF lending, the budget also introduces big gas price rises, and increases defence spending. Meanwhile, the hryvnia's disastrous February weakening exceeded all the previous bouts of depreciation and is a major concern for Kyiv. For the first time in many years, people began stocking up on basic foodstuffs. With domestic demand for foreign currency driven more by panic and lack of trust in the hryvnia than anything else, the Ukrainian central bank (NBU) will struggle to restore any relative currency stability. Impacts Austerity steps could provoke social discontent but absent new currency shocks, the situation should remain generally manageable. If the currency continues to fall after expected IMF support, Ukraine risks complete economic meltdown. Pensions for working pensioners will fall by 15%, causing dissension within the coalition from the Samopomich and Batkivshchyna parties.

Germany’s economic recovery may remain anaemic

2017 ◽  
Keyword(s):  
Financial Crisis ◽  
Euro Area ◽  
Economic Activity ◽  
Domestic Demand ◽  
Growth Potential ◽  
Economic Recovery ◽  
Content Type ◽  
Positive Effect

Significance Germany, like its euro-area partners, has struggled to achieve anything resembling a strong recovery from the 2008-09 financial crisis. Forecasts for 2017 have been revised downwards and there are few signs -- at either the macroeconomic or macropolitical level -- that European stagnation will dissipate. Impacts The weak euro will benefit Germany’s exporting industries. Frankfurt could attract some banks looking to leave London after Brexit. Migration has increased Germany’s domestic demand potential and could have a net positive effect on economic activity in the long term. Europe’s lack of dynamism may weaken the growth potential of other regions.

scholarly journals An inquiry into exchange rate misalignments as a cause of major global trade imbalances

2019 ◽  
Vol 46 (4) ◽  
pp. 902-924 ◽  
Author(s):  
Muhammad Ali Nasir ◽  
Karen Jackson
Keyword(s):  
Exchange Rate ◽  
Current Account ◽  
Trade Balance ◽  
Trade Deficit ◽  
Global Trade ◽  
Trade Surplus ◽  
Content Type ◽  
Trade Imbalances ◽  
Exchange Rate Misalignment ◽  
Practical Implications

Purpose In the context of debate on competitive devaluation and trade imbalances, the purpose of this paper is to investigate the role of exchange rate misalignment as a determinant of trade imbalances in selected major trade surplus (Germany, China, Japan, Russia and KSA) and major trade deficit countries (USA, UK, France, India and Turkey). Design/methodology/approach The authors used a structural vector auto-regressive model on data from ten countries with the highest trade deficit and surplus. The period of analysis is from 2000 Q1 to 2016 Q1. Findings The key findings suggest that although exchange rate misalignment from equilibrium may have some implications for the current account balance for surplus and deficit countries, the effects observed were rather very mild and transitory. There was a heterogeneity in the response of the current account position to exchange rate misalignment in each country, concomitantly; the exchange rate misalignment shall not be seen as the sole responsible factor in the debate on global trade imbalances. Research limitations/implications The research has profound implications in terms of exploring the notion of competitive devaluation and exchange rate misalignment as a cause of major global trade imbalances. Practical implications This study has important practical implications for the trade policy of major economies in the world. These are twofold. First, this study has analysed and reported on the degree of misalignment of exchange from its equilibrium values in the major trade surplus and deficit countries. Second, it has investigated the implications of any misalignment for the trade balance or respective economies. Social implications There are important social implications as the notion of competitive devaluation and exchange rate–trade balance nexus has been heavily politicised. This study provides an empirical insight and an answer to these claims which have social and political implications. Originality/value There is a significant element of originality and contribution to the existing body of knowledge on the subject. In the context of debate on competitive devaluation this is the first study which has investigated whether the exchange rate has been misaligned from its equilibrium values (competitive devaluation) and whether there is some nexus between the real exchange rate misalignment and trade imbalances in under-analysis economies.

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