Japan's economic outlook brightens as growth continues

2017 ◽  
Keyword(s):  
Interest Rates ◽  
Raw Materials ◽  
Bank Lending ◽  
Labour Markets ◽  
Business Failure ◽  
Content Type ◽  
Bank Of Japan ◽  
Low Interest Rates ◽  
Low Levels ◽  
Economic Outlook

Subject The economic outlook for Japan. Significance Japan’s GDP rose 1.0% for the calendar year 2016 and the fourth quarter (annualised). Although the latest quarter decelerated from the pace of the earlier part of the year, the economy has now experienced four straight quarters of growth, the longest stretch since 2013. Impacts Higher wages arising from tighter labour markets will eventually push up prices, the four-year goal of the Bank of Japan. Low interest rates, rising investment and historically low levels of business failure support bank lending and demand for loans. The apparent end of a raw materials glut is bringing foreign demand back to Japan’s exporters; this should continue.

Japan will stay the course on monetary easing

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Central Banks ◽  
Quantitative Easing ◽  
Content Type ◽  
Bank Of Japan ◽  
Target Date ◽  
Low Levels ◽  
Global Economic Growth ◽  
First Time

Subject Monetary policy in Japan. Significance The monetary policy board of the Bank of Japan (BoJ) at its last meeting abandoned its prediction of when the nation will reach its 2% inflation target, the first time it has omitted a target date since Governor Haruhiko Kuroda introduced his policy of radical monetary easing five years ago. Impacts Japan’s interest rates will remain at historically low levels for at least two more years. The yen will remain relatively weak as other countries’ central banks end their quantitative easing programmes. A weak currency plus widespread global economic growth will create strong demand for Japanese exports.

Year of elections will not shift Spain's economic woes

2015 ◽  
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
Bank Lending ◽  
Federal State ◽  
The Political ◽  
Energy Prices ◽  
Tax Reforms ◽  
National Elections ◽  
Content Type ◽  
Low Interest Rates

Subject Economic backdrop to the election cycle. Significance Incumbent administrations will be helped in this year's local, regional and national elections by a number of factors that will contribute to economic growth: lower energy prices, low interest rates, easier bank lending, income tax reforms, a stabilisation in house prices and the stimulus to exports of a weak euro. Nevertheless, widespread disillusion with the political system is likely to result in significant changes in the political landscape, with repercussions for the direction of policy both within Spain and at the European level. Impacts A coalition of the left would push for an easing of austerity measures and more public spending paid for by more progressive taxation. It is also likely to be supportive of a move towards a federal state. Domestic demand should rise, unemployment continue to fall and property prices to stabilise and start to move upwards in some locations. Challenging political and economic conditions will make it difficult to sustain fragile coalitions.

Swiss economic growth is set to accelerate this year

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Labour Market ◽  
Private Consumption ◽  
Private Investment ◽  
Gdp Growth ◽  
Consumption Growth ◽  
Content Type ◽  
Low Interest Rates ◽  
Economic Outlook

Subject Economic outlook for Switzerland. Significance Switzerland’s GDP growth disappointed in the first quarter of 2017: it increased by 0.3% on a quarterly and 1.1% on a yearly basis, held back by weak private consumption growth. However, exports rebounded after the long blight of the 2015 franc appreciation shock. Impacts Private consumption should improve after stagnating in 2015-16, benefiting from the labour market recovery. Low interest rates are likely to boost private investment. Chemicals, pharmaceuticals, engineering, electrics and the watch-making industry are likely to benefit from the expected revival in exports. Inflation is likely to average around 0.4% in 2017 and 2018.

Political pressure is rising for Polish bank mergers

2015 ◽  
Keyword(s):  
Interest Rates ◽  
Bank Lending ◽  
Political Debate ◽  
Content Type ◽  
Debt Burden ◽  
Low Interest Rates ◽  
President Elect ◽  
Near Term ◽  
Law And Justice ◽  
Privately Owned

Significance State-controlled PZU Group, Poland's largest insurer, was already bidding for a 25% stake in Italian-controlled mid-tier lender Alior Bank, and now wants to acquire Austrian-owned Raiffeisen Polbank and US General Electric (GE) group's local unit BPH. As the sector struggles with the consequences for borrowers in foreign exchange (forex) of the Swiss central bank's decision to scrap its currency ceiling against the euro, consolidation and foreign ownership are returning to the forefront of political debate. In the presidential election, the president-elect from opposition Law and Justice, Andrzej Duda, announced his preference for greater domestic ownership in a sector that is otherwise mostly privately owned. Impacts The household loan/GDP ratio will continue growing, but an upturn in demand for corporate loans in 2016 will reshape bank lending dynamics. Profitability margins will remain under pressure in the short term, owing to the Swiss franc debt burden and low interest rates. Solid growth in deposit and equity levels will nevertheless underpin financial sector stability in the near term.

China's economy will slow, but perhaps not as planned

2015 ◽  
Keyword(s):  
Interest Rates ◽  
High Speed ◽  
Large Scale ◽  
Raw Materials ◽  
Fiscal Stimulus ◽  
Content Type ◽  
Downward Pressure ◽  
World Economic ◽  
Economic Outlook ◽  
China’S Economy

Subject The economic outlook for China. Significance Premier Li Keqiang, addressing the World Economic Forum in Davos on January 21, told a global audience that China's economy does not face a hard landing, arguing that structural reforms and "mass entrepreneurship and innovation" will maintain China's "medium to high-speed" growth. However, addressing the State Council just before the release of the latest quarterly economic figures on January 20, Li had already admitted that the government's work had become more difficult as a result of "downward pressure" on the economy. Impacts Target GDP growth for 2015 may be lowered to 7%, and even this may be optimistic. Large-scale fiscal stimulus is unlikely. China's depressed demand for raw materials will hurt commodity exporters, Russia, Australia, Brazil and Indonesia foremost. This year is likely to see further cuts in interest rates and the reserve requirement ratio.

Brazil's bank lending will pick up after sharp decline

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Bank Lending ◽  
Single Digit ◽  
Content Type ◽  
Fiscal Constraints ◽  
Loan Demand ◽  
Low Interest Rates ◽  
Will Force ◽  
Loan Growth

Subject Outlook for the banking sector. Significance Following a deep two-year recession that started in 2015, Brazil’s financial system will see loan growth returning to positive territory. This will be slow and gradual, with lending set to expand at single-digit rates during the next few years. Banks saw improving profitability in 2017 due to a reduction in expenses related to bad loans, but this will come under pressure because of record-low interest rates. Impacts Rising bank lending will support economic recovery but will not be the same engine of GDP growth as in past years. Large state-owned banks will be somewhat less dominant due to capital and fiscal constraints. Lower interest rates and weak loan demand will force banks to focus on increased efficiency and fee-generating products and services.

Australia budget keeps defence spending commitments

2021 ◽  
Keyword(s):  
South China Sea ◽  
Interest Rates ◽  
Fiscal Year ◽  
National Politics ◽  
Content Type ◽  
Defence Spending ◽  
Low Interest Rates ◽  
Defence Expenditure ◽  
Conducive Environment ◽  
Made In

Significance With an election due soon, the governing Liberal-National Coalition’s pledge to ring-fence the defence spending commitments made in 2016 was under some pressure. However, defence spending in fiscal year 2021/22 will grow by over 4% in real terms and stay above the symbolic level of 2% of GDP. Impacts Growing popular and bipartisan concern with Chinese aggression is a conducive environment for increased defence spending. Low interest rates and a stronger Australian dollar are also supporting sustained levels of defence expenditure. Washington may increase pressure on Australia to conduct freedom of navigation exercises in the South China Sea. Major business groups are concerned that increased criticism of China in national politics will produce yet more punitive backlash.

Australian central bank holds rate as growth slips

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Labour Markets ◽  
Content Type ◽  
Commercial Lenders ◽  
The Government ◽  
Roll Out ◽  
Growth Forecasts

Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.

Low interest rate environment: inventory management in Finland and Baltic states

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olli-Pekka Hilmola ◽  
Weidong Li ◽  
Andres Tolli
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Customer Service ◽  
Inventory Management ◽  
Global Financial Crisis ◽  
Recent Decade ◽  
Baltic States ◽  
Content Type ◽  
Low Interest Rates ◽  
Rate Environment

PurposeFor decades, it was emphasized that manufacturing and trading companies should aim to be lean with very small inventories. However, in the recent decade, time-significant change has taken place as nearly all of the “old west” countries have now low interest rates. Holding inventories have been beneficial for the sake of customer service and for achieving savings in transportation and fixed ordering costs.Design/methodology/approachIn this study, inventory management change is examined in publicly traded manufacturing and trade companies of Finland and three Baltic states (Estonia, Latvia and Lithuania) during the years 2010–2018.FindingsInventory efficiency has been leveled off or falling in these countries and mostly declining development has concerned small- and medium-sized enterprises (SMEs). It is also found that inventory efficiency is in general lower in SMEs than in larger companies. Two companies sustaining in inventory efficiency are used as an example that lean has still significance, and higher inventories as well as lower inventory efficiency should not be the objective. Two companies show exemplary financial performance as well as shareholder value creation.Research limitations/implicationsWork concerns only four smaller countries, and this limits its generalization power. Research is one illustration what happens to private sector companies under low interest rate policies.Practical implicationsContinuous improvement of inventory efficiency becomes questionable in the light of current research and the low interest rate environment.Originality/valueThis is one of the seminal studies from inventory efficiency as the global financial crisis taken place in 2008–2009 and there is the implementation of low interest rates.

The current farm downturn vs the 1920s and 1980s farm crises

2018 ◽  
Vol 78 (4) ◽  
pp. 396-411 ◽  
Author(s):  
Wendong Zhang ◽  
Kristine Tidgren
Keyword(s):  
Interest Rates ◽  
Agricultural Sector ◽  
Balance Sheet ◽  
Real Income ◽  
Economic Downturn ◽  
Agricultural Credit ◽  
Content Type ◽  
Farm Crisis ◽  
Low Interest Rates ◽  
Sudden Collapse

Purpose The purpose of this paper is to examine the current farm economic downturn and credit restructuring by comparing it with the 1920s and 1980s farm crises from both economic and regulatory perspectives. Design/methodology/approach This paper closely compares critical economic and regulatory aspects of the current farm downturn with two previous farm crises in the 1920s and 1980s, and equally importantly, the golden eras that occurred before them. This study compares key aggregate statistics in land value, agricultural credit, lending regulations, and also evaluates the situations and impacts on individual farmer households by using three representative case studies. Findings The authors argue that there are at least three economic and regulatory reasons why the current farm downturn is unlikely to slide into a sudden collapse of the agricultural markets: strong, real income; growth in the 2000s, historically low interest rates; and more prudent agricultural lending practices. The current farm downturn is more likely a liquidity and working capital problem, as opposed to a solvency and balance sheet problem for the overall agricultural sector. The authors argue that the trajectory of the current farm downturn will likely be a gradual, drawn-out one like that of the 1920s farm crisis, as opposed to a sudden collapse as in the 1980s farm crisis. Originality/value The review provides empirical evidence for cautious optimism of the future trajectory of the current downturn, and argues that the current downturn is much more similar to the 1920s pattern than the 1980s crisis.

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