Myanmar macroeconomic pressures likely to rise in 2017

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Current Account ◽  
Current Account Deficit ◽  
Peace Process ◽  
Content Type

Significance Since the party took over governing in April 2016, much attention has focused on Myanmar’s political challenges. Yet the country also faces macroeconomic hurdles, which are likely to worsen in 2017. Impacts A worsening current account deficit could see further kyat volatility and make reducing dollarisation more difficult. A cabinet reshuffle is possible this year. Sharing economic growth dividends will be difficult without (equally elusive) progress in the ethnic peace process.

Protests present major challenges for Colombia’s Duque

2019 ◽  
Keyword(s):  
Economic Growth ◽  
Current Account ◽  
Current Account Deficit ◽  
Short Term ◽  
Social Unrest ◽  
Content Type ◽  
Approval Ratings ◽  
Growth Disruption ◽  
The Current Account

Significance Almost a month of protests against a range of perceived government failings is putting pressure on President Ivan Duque, already weakened by plunging approval ratings and his party’s loss of its legislative majority in October’s elections. His efforts to allay tensions have yet to bear fruit and fall far short of a list of 13 demands tabled by the National Strike Committee. Impacts Weaker exports will lead to an increase in the current account deficit. No changes to the policy rate are expected in the short term unless the economic growth disruption from social unrest worsens. Given the multitude of stakeholders and issues in dispute, protests will probably linger for the rest of Duque’s term.

Are export earnings from India’s bilateral intra-industry trade with the US and China robust enough?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sagnik Bagchi ◽  
Surajit Bhattacharyya
Keyword(s):  
Current Account ◽  
Manufacturing Industry ◽  
Current Account Deficit ◽  
Export Price ◽  
World Market ◽  
Export Share ◽  
Content Type ◽  
Persistent Problem ◽  
Industry Trade ◽  
The World

Purpose This paper aims to explore whether India’s export basket in the bilateral intra-industry trade (IIT) with two of its top trading partners characterize robust export earnings or not. This is pertinent for two reasons. First, India has a persistent problem of current account deficit for over decades now. Second, whether India’s export diversification strategy by participating in global value chains to improve export share in the world market led to the problem of the fallacy of composition. Design/methodology/approach This study considers bilateral trade data between India-USA and India-China at the HS-6 digit level over the period 1990–2018. The magnitude of total IIT is computed using the Grubel and Lloyd (1971) index. This paper then uses the unit value dispersion criterion to disentangle the magnitude of total IIT into horizontal and vertical IIT. Through a stepwise econometric exercise, this paper explores the attributes of exported goods in the IIT basket in terms of the directions of ToT, export share and export-price elasticity. Findings Across the two country pairs, the major contributors to the upsurge in IIT are five manufacturing industry groups of chemical, plastics and rubber, textiles, base metals and machinery and mechanical appliances. Across the industry groups, the dominant form of IIT has been low vertical IIT. Most of the industry groups do not characterize robust export earnings as the commodity groups have an elastic demand and an increasing trend of Terms of Trade (ToT). The exceptions are the industry groups of chemicals and textiles in India-China and India-USA, respectively. Research limitations/implications The concern of slim export earnings in most industry groups offers scepticism in maintaining the sustainability of the current account. The problem of the fallacy of composition also cannot be ruled out given the dominance of low vertical IIT. This study argues that these industry groups need to engage in labour market reforms and require access to easy credit to achieve competitiveness in the world market. Originality/value The analysis performed in this paper attempts to integrate the Prebisch-Singer hypothesis in the context of IIT. Empirical evidence to such an issue is not profound.

Turkey faces power shortages as gas contracts end

2021 ◽  
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
Content Type ◽  
Run Up ◽  
Power Shortages

Significance Turkey stands to lose 21% of its import portfolio during the peak winter demand period. Take-or-pay gas import contracts signed two decades ago are coming to an end, and renewal is proving far from straightforward as exporters seek to leverage Turkey’s weak position to secure favourable terms. Impacts Cheaper gas on better terms would help Turkey’s chronic current account deficit. Ankara is keen to avoid further confrontation with Washington in case it puts further pressure on the lira in the run-up to elections. Balancing relations with Washington and Moscow and securing cheap, reliable gas supplies would be a major feat but may prove impossible.

Prospects for Turkey in 2022

2021 ◽  
Keyword(s):  
Central Bank ◽  
Current Account ◽  
Current Account Deficit ◽  
Main Theme ◽  
Content Type ◽  
Strong Growth

Subject Prospects for Turkey in 2022. Significance The Central Bank may cut its policy rate again tomorrow. The authorities are gambling on weakening the lira despite soaring inflation, emboldened by strong growth and a narrowing current account deficit. The main theme for 2022 will be the following year, when the Turkish Republic’s centenary will be packed with symbolism for both political sides.

Determining Influencing Factors of Currency Exchange Rate for Decision Making in Global Economy Using MARS Method

2018 ◽  
pp. 261-273 ◽  
Author(s):  
Hasan Dinçer ◽  
Ümit Hacıoğlu ◽  
Serhat Yüksel
Keyword(s):  
Economic Growth ◽  
Decision Making ◽  
Exchange Rate ◽  
Current Account ◽  
Global Economy ◽  
Current Account Deficit ◽  
Currency Exchange ◽  
Currency Exchange Rate ◽  
Us Dollar ◽  
Turkish Lira

The aim of this study is to identify the determinants of US Dollar/Turkish Lira currency exchange rate for strategic decision making in the global economy. Within this scope, quarterly data for the period between 1988:1 and 2016:2 was used in this study. In addition to this aspect, 10 explanatory variables were considered in order to determine the leading indicators of US Dollar/Turkish Lira currency exchange rate. Moreover, Multivariate Adaptive Regression Splines (MARS) method was used so as to achieve this objective. According to the results of this analysis, it was defined that two different variables affect this exchange rate in Turkey. First of all, it was identified that there is a negative relationship between current account balance and the value of US Dollar/Turkish Lira currency exchange rate. This result shows that in case of current account deficit problem, Turkish Lira experiences depreciation. Furthermore, it was also concluded that when there is an economic growth in Turkey, Turkish Lira increases in comparison with US Dollar. While taking into the consideration of these results, it could be generalized that emerging economies such as Turkey have to decrease current account deficit and investors should focus on higher economic growth in order to prevent the depreciation of the money in the strategic investment decision.

scholarly journals Explaining India’s current account deficit: a time series perspective

2019 ◽  
Vol 26 (1) ◽  
pp. 117-138
Author(s):  
Harendra Kumar Behera ◽  
Inder Sekhar Yadav
Keyword(s):  
Current Account ◽  
Unit Root ◽  
Current Account Deficit ◽  
Structural Break ◽  
Current Account Balance ◽  
Fiscal Deficit ◽  
Causality Test ◽  
Content Type ◽  
Financial Account ◽  
Cointegration Tests

Purpose The purpose of this paper is to examine the issue of high current account deficit (CAD) from various perspectives focussing its behaviour, financing pattern and sustainability for India. Design/methodology/approach To begin with the trends, composition and dynamics of CAD for India are analysed. Next, the influence of capital flows on current account is investigated using Granger non-causality test proposed by Toda and Yamamoto (1995) between current account balance (CAB) to GDP ratio and financial account balance to GDP ratio. Also, the sustainability of India’s current account is examined using different econometrics techniques. In particular, Husted’s (1992), Johansen’s cointegration and vector error correction model (VECM) is applied along with conducting unit root and structural break tests wherever applicable. Further, long-run and short-run determinants of the CAB are estimated using Johansen’s VECM. Findings The study found that the widening of CAD is due to fall in household financial savings and corporate investments. Also, it was found that a large part of India’s CAD has been financed by FDI and portfolio investments which are partly replaced by short-term volatile flows. The unit root and cointegration tests indicate a sustainable current account for India. Further, econometric analysis reveals that India’s current account is driven by fiscal deficit, terms of trade growth, inflation, real deposit rate, trade openness, relative income growth and the age dependency factor. Practical implications Since India’s CAD has widened and is expected to widen primarily due to rise in gold and oil imports, policy makers should focus on achieving phenomenal export growth so that a sustainable current account is maintained. Also, with rising working-age and skilled population, India should focus more on high-value product exports rather than low-value manufactured items. Further, on the structural side it is important to correct fiscal deficit as it is one of the important factors contributing to large CAD. Originality/value The paper is an important empirical contribution towards explaining India’s CAD over time using latest and comprehensive data and econometric models.

Indonesia in 2013

Asian Survey ◽  
2014 ◽  
Vol 54 (1) ◽  
pp. 47-55 ◽  
Author(s):  
Geoffrey C. Gunn
Keyword(s):  
Economic Growth ◽  
Current Account ◽  
Current Account Deficit ◽  
Trading Partner ◽  
A Current ◽  
The U.S

Ahead of upcoming elections, expectations ran high in 2013 across the archipelago for a highly pluralistic electorate. With China as a leading trading partner, the backdrop for Indonesia was steady economic growth, albeit checked by a sliding currency, a current account deficit, and a depressing culture of corruption. Mixing commerce and geopolitics, China, the U.S., and Japan all turned to Indonesia to expand their influence.

Belize’s economic recovery will lose steam

2020 ◽  
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
Public Investment ◽  
Economic Recovery ◽  
International Reserves ◽  
Severe Drought ◽  
Hydropower Generation ◽  
Short Term ◽  
Content Type ◽  
Primary Surplus

Subject The Belize economy. Significance Belize’s economic recovery is stagnating following a severe drought that has had a harsh impact on agriculture and hydropower generation. The situation has been compounded by a slowdown in tourist arrivals following years of buoyant growth, reflecting weaker global expansion and the grounding of Boeing 737 MAX aircraft, which service the country. Impacts The current account deficit will remain large, with international reserves averaging just three months of imports. The primary surplus will narrow due to increasing spending on wages and public investment and weaker-than-expected revenue. This being an election year, cuts to current expenditures will probably be off the table, limiting debt reduction in the short term. Funding constraints will hit the government’s ability to pursue much-needed reforms in infrastructure and education.

Argentine foreign finance fears will rise this year

2019 ◽  
Keyword(s):  
Current Account ◽  
Trade Balance ◽  
Current Account Deficit ◽  
Foreign Debt ◽  
Economic Downturn ◽  
Content Type ◽  
Agricultural Exports ◽  
Debt Burden ◽  
External Adjustment ◽  
Interest Payments

Significance In 2018 the economic slump and devaluation helped to improve the trade balance by cutting imports. However, the current account deficit reached 5.4% of GDP, up from 4.9% in 2017, due to the growing burden of interest payments on foreign debt, which already represents more than 50% of GDP. Impacts External adjustment will be mostly driven by falling imports; competitiveness woes will prevent a rise in non-agricultural exports. The government's inability to reverse the economic downturn and a growing debt burden will keep default fears high. Access to foreign finance will remain key to guarantee debt servicing.

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