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Gloom over the eurozone economy deepened yesterday as a leading international think-tank sharply cut its growth forecast for the 12-nation bloc and issued a powerful call for urgent cuts in interest rates.
In the latest blow to hopes for European economic revival, the Organisation for Economic Co-operation and Development cut its forecast for eurozone growth this year to just 1.2 per cent — down from its previous 1.9 per cent projection.
The OECD has forecast that Australia’s current account deficit will narrow to under 5 per cent.
It has also predicted that GDP will grow to 3.4 per cent in 2006, due to a pick-up in exports, high levels of business investment and low corporate debt.
(Via Alan R.M. Jones)
What a coincidence. Australia tries efficient government and free markets. Europe is, well Europe. Australia booms. Europe dooms. But hey. They still have French “culture,” right?
Posted by Gary from Jersey on 2005 05 25 at 02:24 PM • permalinkHmmm.
But do they have a meat pie floater?
And does such a thing really exist or was a friend putting me on?
Posted by memomachine on 2005 05 25 at 03:26 PM • permalinked - yes pie floaters certainly do exist. It’s a steaming hot meat (we try not to think too much about the meat contents) pie sitting in a bowl of thick, bright green pea soup. Best eaten covered with lots of tomato sauce under the influence of alcohol on a cold winter’s night in Adelaide’s North Terrace. Nothing like it.
Posted by Bruneidaze on 2005 05 25 at 07:56 PM • permalinkWell, now we know why Gerhard Schroeder moved German elections a year closer, even after getting his ass kicked in Westphalia over the economy - he knows that even worse news is on the horizon and he can only go down from here.
Posted by localharbor on 2005 05 25 at 09:53 PM • permalinkHmm, methinks the OECD estimate for Australia is based on the Treasury estimates used for the recent budget.
Subsequent developments (eg the increasing likelihood of a major drought) may put a kybosh on the good growth and current account estimates. OTOH, China, Japan etc. are falling over themselves bidding up our coal prices….
If the bloody drought finally breaks, the GDP growth will be even higher.
Posted by Honkie Hammer on 2005 05 26 at 03:04 AM • permalinkUnfortunately, even if we don’t get an offical El Nino event, there is still going to be an intensification of the drought in Australia for the next six to eight months.
Fortunately, agriculture is not as important as the National Party would have you believe and may not have a big impact on the growth estimates (particularly as growth has been held back by drought for the last three years anyway - so there will not be much extra impact), but it won’t help the current account to have ag exports down for another year. It will put pressure on the budget too, as Howard tries to keep the Nats happy so he can sell telstra by throwing more good money down the drought assistance black hole. Nobody should be deluding themselves that the Government has control of the senate come 1 July.
That’s true steve68. However, that means that when they look at climate impacts on the outlook, they thus chose ‘normal seasons’ as the outlook. The opposition, of course, has made hay of this (ha ha) but at the time the key assumptions for the budget were framed, Treasury would have had no other choice.
Even now, the actual climate outlook, and whether or not we face an El Nino event, is still fairly uncertain. The system does not really lock in until early winter.
And so long as there are still such free market policies as
the $100 billion a year or so, conservatively estimated, of special-interest subsidies and handouts that the government pays to American businesses
we should likewise be impressed by the US economy.
BTW, can anyone explain why Berlusconi’s Italy is falling into recession? He’s a solid rightist reformer, surely.
the $100 billion a year or so, conservatively estimated, of special-interest subsidies and handouts that the government pays to American businesses
Oh goodness! 4% of the federal budget goes to subsidies! (I thought it was a lot higher than that, actually.)
BTW, can anyone explain why Berlusconi’s Italy is falling into recession? He’s a solid rightist reformer, surely.
Yes, but his reforms have been hamstrung by the labour unions, very much entrenched in Italy.
I think the workers of Europe should strike to demand greater economic growth… oh, the French are already doing that?
Posted by richard mcenroe on 2005 05 26 at 10:19 AM • permalinkMeanwhile in the USA:
The Bureau of Economic Analysis released a revised measure of inflation-adjusted (“real”) gross domestic product (GDP) for the first quarter of 2005 (at http://www.bea.doc.gov/bea/dn/home/gdp.htm ).
Annualized GDP growth in the 1st quarter was revised up from an earlier estimate of 3.1% to 3.5%.In the 4th quarter of 2004, real GDP grew at a 3.8% annualized rate.
Posted by Kosmopolit on 2005 05 26 at 02:44 PM • permalinkAbout seven years ago a friend of mine decided to invest his funds into European shares rather than American or Aussie shares. His thinking was that Europe, being further behind in reforming its sclerotic socialist economies and addressing islamic infiltration, had further growth potential than the overpriced American/Ausiie shares. He thought they would soon be forced to accept reality and start reforming. Whoops! He eventually learned from his mistake, and has accepted that Europeans are incapable of learning from their mistakes.
Posted by Jim Geones on 2005 05 27 at 06:39 AM • permalink
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I thought Europe was in recession?